Personal Finance Wisdom Days
Personal Finance Wisdom Days

Funding the Freelancer’s Retirement

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Virtually every financial expert on the planet harps on the necessity to save for your retirement. You already know you need to set aside money each month and you’ve looked into your freelance retirement options.

The problem is that putting money away for retirement is easier said than done when your income fluctuates. So, you tell yourself you’ll fund your IRA once a year to get that ever-important tax deduction.

In fact, you’ve told yourself that every year since beginning your freelance career, yet your retirement fund remains at zero. Unless you plan to slave away at your computer well into your 90s, perhaps it’s time to reevaluate your budget and identify some cash for retirement.

Review the Priorities

Saving for retirement should be a scheduled event just like meeting deadlines and paying your taxes. Like any financial obligation, funding retirement deserves a line item on your household budget – or your business budget, if you have one. Just because you’re your own creditor, in this case, doesn’t negate the obligation.

Compare your budget to your actual spending. If you’re like the majority of people, you spend money in ways the budget doesn’t account for. Can you forgo half those trips to Starbucks if it means enjoying your old age? Probably. Will you fall over and die of boredom if you wait until a movie goes to video? Probably not.

Make a Habit

In the 9-5 job world, you can let your retirement plan zap the money out of your paycheck before you ever see it, making retirement account funding mindless. Depending on your job, you may even receive a nice annual bonus to fund your Roth IRA each year.

When you work for yourself, you don’t have this privilege. You see each and every dime you make and must decide how to allocate every red cent. When you have bills to pay and kids asking for lunch money, it’s not always easy to pay yourself first.

But you have to.

Set a goal for your retirement savings and stick to it. Even if you have to start out slowly, setting aside only $50 or $100 a month, do it. The power of compound interest and earnings can’t get to work until you make that first deposit into your retirement account.

Unless you have iron willpower, don’t leave the retirement money in your savings account until the yearly contribution. Instead, look for plans that allow small deposits all year long. You’ll be less likely to spend the money if you must incur an IRS penalty to access it.

Think in Percentages

When you set your goal, avoid thinking you need X dollars a year. At least, don’t think that way at the beginning.

When you first start freelancing, money may be tight and assignments may take longer than you plan. Having a hard dollar goal of $10,000 in the back of your mind that you know you can’t meet is demoralizing.

Once self-defeating talk sets in, you’ll convince yourself that since you can’t meet your goal, you shouldn’t bother setting anything aside.

That’s dangerous.

What if you told yourself you only needed to set aside five percent of your income? How would that change your thinking on the subject? Even if you have a slow month and make $1,000, you can set aside $50.

In most cases, $50 isn’t all that stands between you and eviction. $50 may not even be a dent in your family’s food budget. What $50 can be, however, is a chance for your money to start working for you, rather than you always working so hard for it. That $50 alone won’t make you rich, but it’s a start when you add it to all your other small contributions.

Create a Retirement Cash

As a freelancer, you may be in the position of struggling to make ends meet each month. In this case, survival trumps retirement. You can look for additional or better-paying work, but there’s no guarantee you’ll find what you need.

When this happens, you must make your own retirement opportunities. If you spend your days writing content for other people, carve out an hour each night to write for yourself. Passive income from niche websites won’t make you rich overnight – and if it does, let me know what niche you found – but it will build extra income over time.

Don’t use this money to supplement your writing income or fund a night out. Instead, contribute every penny to your retirement account.

Seriously, don’t you think you’re worth one hour a day?…

1000 loan

5 Steps to Get $1000 Loan Online and Stay Safe

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Many consumers take out loans so they can cover unexpected expenses or bills. However, choosing a loan that doesn’t fit your needs or receiving a loan from an unscrupulous lender can add to your worries.

The last thing you need when faced with mounting debts and bills is another loan that causes you stress. That doesn’t have to be the case. By following the guidelines below you can find out how to obtain a 1000 dollar loan safely.

Step 1

Evaluate your financial situation. The first step to obtaining a loan is to determine if you can, in fact, afford the payment a new loan will carry.

If there is not enough money coming in to cover a new loan payment it is inevitable that payments will not be met.

This will incur added expenses and fees and raise your interest rate. Phone calls from the creditor will start coming in, adding to your stress.

To avoid this and make sure you can obtain a loan safely, write down all of your expenses. By tracking the money coming in and money going out you can see if there is extra money to afford a new loan payment or not.

If you have enough income to afford the payments, proceed to step 2. If your money coming in cannot cover another loan payment, you shouldn’t seek new credit unless it is to consolidate your bills and pay off existing debts.

Step 2

One of the secrets to obtaining a loan online is to find a loan that is tailored to your needs. Loans can come as secured or unsecured. A secured loan requires you to place an item (say your car or home) as collateral against the new loan.

The creditor can then place a lien upon your car or home if you fail to meet the loan obligations. Secured loans can be home equity lines of credit or second mortgages.

Unsecured loans do not require the borrower to place anything as collateral and therefore the borrower does not have to worry about losing the secured property.

Unsecured loans are more risky for the lender. Thus, such loan often has a higher interest rate and more strict terms.

Step 3

You should only borrow money from a reputable lender when trying to stay safe. Start with current lenders that you have established relationships with. They may be able to offer you attractive terms on a new loan. If so, apply for a loan through them.

Step 4

Be sure to read all the fine print before signing any paperwork. Look for clauses that might raise your monthly payment, change interest rates, incur fees, or penalize you for prepaying the loan off early.

If anything is unclear, ask your loan officer for clarification. After you have agreed to all loan terms and conditions, you are ready to sign the loan paperwork and get your loan.

Step 5

Even though economic times are tough across the country, safe payday loans are still out there. It just takes a little bit of due diligence on your part to obtain a loan online and be on your way to a more stress-free financial life.…

10 Money Saving Tips

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There is a wise saying that what counts is not how much money you make but how much of it you keep. With that in mind, here are 10 money-saving tips in no particular order.

1. Get rid of cable television.

You don’t need it. The cable must go. Read a book or read to the kids. If you really must watch television, there are so many good shows on free television stations, particularly PBS. For movies, visit your local libraries for free movie rentals. Believe it or not, they have good selections.

2. If you are renting, you should seriously look into buying a house.

Homeownership provides great tax savings and a good way to build wealth. And when you are ready to buy, consider buying a house you can afford and not the property your realtor says you can qualify for.

Also, bear in mind that your real estate agent stands to make a sizeable commission from the sale. For that reason, their interests and yours may not necessarily be the same.

3. If you have an account with a bank and you pay monthly maintenance fees.

Consider closing the account and moving your banking business to a credit union. Credit unions are non-profit and are owned and organized by people united by a common bond such as religion, ethnicity, culture, neighborhood, recreation and so on.

With as little as $25.00, you can open a credit union checking account with unlimited check writing privileges and withdrawals. They also offer loans (both secured and unsecured) at more attractive rates.

4. If you file 1040EZ, 1040A or a simple 1040 and have access to an internet.

There is no reason to pay someone to file your taxes or buy expensive tax preparation software. Many websites offer free filing services. Some of them may require income eligibility. TAXACT ONLINE has a very user-friendly website and offers free filing services, including free electronic filing for federal tax returns.

For state filing and other extras, they charge a fee. With a direct deposit, you can e-file and get your refund (if you are due one) in as little as 14 days. Avoid Refund Anticipation Loan (RAL) ripoff. If you waited a year for your refund, there is no great harm for an extra 14 days wait.

5. If you are planning on buying a new car, a word of caution.

Do your homework first before stepping into a dealership showroom. Do not fall into the temptation of purchasing expensive roadside packages or extended warranties.

For one, today’s vehicles, no matter the make or model, are built to last. Just follow the manufactures scheduled maintenance guide (i.e. rotate tires and change oil filters, AC, brakes, engine coolant, timing belts, at regular intervals) and you will be fine. Take it from someone who has a car that was purchased new back in 2000.

The car has over 200K miles and runs like new. And just saying no extended warranties or roadside packages may not be enough. Make sure it is no tacked on under a disguise. And for men, be wary if you are steered to get a sales pitch on these packages from endowed and cleavage showing ladies in the finance department. It is no coincidence or accident.

6. On the roadside assistance packages, there is a very good chance that it may already be covered by your auto insurance plan.

May be offered as a compliment by the manufacturer, albeit for short period of time, for buying a new car from them. Do not pay for the same service twice.

On the other hand, If it is not in your auto insurance plan and does not come with the new vehicle, it may be a wise thing to purchase such a plan from Automobile Association of America (AAA) for as little as $50.00 or $60.00 a year.

In addition to roadside assistance, AAA membership provides a discount at major hotels, discount at some auto repair shops and a bail bond for minor traffic violation arrests.

7. Avoid extended warranties on appliances and electronics.

They are a waste of money and the benefits are rarely used. The technology on electronics now changes in the blink of an eye, and by the time the factory warranty runs out, you may already be itching to replace the product.

8. Make it a habit to read monthly statements or correspondences from your financial institutions and bills from your service providers.

Don’t assume that since they come from reputable institutions, that they are error free. The mistake may come from the merchants and vendors submitting incorrect amounts for payment or may be charged that you did not authorize.

A good example is an alteration of check amounts. Always reconcile their Statements with your records.

9. Just as you look at items that would save you money, avoid activities and behaviors that would cost you money and may also be detrimental to your health.

A prime example is an alcohol. Nothing good comes from alcohol consumption, except maybe temporary happiness. To the contrary, the costs in terms of DWI, domestic abuse and violence, your health, etc can be enormous.

10. Incorporate physical exercise in your daily routines.

I’m not advocating expensive gym membership or costly exercise equipment that you may rarely use, but rather a brisk walk in the park or around the neighborhood, taking the stairs instead of the elevator and parking your vehicles (if security permits) far away from the shopping mall and stores.

Exercise should not be about vanity alone but a long-term good health preserver. As the saying goes, if you rest you rust.…

The Importance of an Emergency Savings Fund

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It has been said that there is no softer pillow than money in the bank. If you don’t have any money in the bank then you probably can appreciate this statement. Many lie awake during sleepless nights wondering if their bank balance will stay positive until that next payday.

It is an unfortunate statistic in a country with such growth and prosperity that last year’s savings rate was negative, meaning people actually spent more than they earned. Everyone should have an emergency fund put away for rainy days because it is going to rain whether you are prepared for it or not.

How Much Should One Save

Many experts agree families should save 3-6 months of expenses in their emergency fund. I tend to lean towards the lengthier side of that estimate, particularly in families with only one income, or only one parent. Single income households are at more financial risk to job loss, or a disabling injury or illness because their entire income is being generated by one member of the family.

At least in two-income households, things could be scaled back and the family could survive on one income in an emergency. Notice this amount is 3-6 months of expenses, not income. If things get tight you could live without any of your disposable income and just pay expenses.

Where to Park an Emergency Fund

We aren’t exactly trying to beat Warren Buffet here. Remember, the purpose of an emergency fund is to provide a low-risk parking place for your money that is easily accessible. This rules out things like mutual funds, single stock investments, and CDs. The money could be retrieved from all three, however, significant penalties may apply.

In the case of stock funds or single stocks, your emergency will undoubtedly occur at the lowest price for your stock(s) and you will lose a significant portion of your investment. I recommend keeping your emergency fund in a money market account at a local bank or credit union. Online savings accounts with institutions such as ING Direct or HSBC are not bad either, assuming your account offers a way to immediately access your funds (ATM card, checks, etc.).

For most families, $10,000 represents a healthy emergency fund amount. Imagine how much easier you could handle a job loss or a leaky roof with $10,000 in the bank specifically for that purpose. Deciding you need an emergency fund in the easy part; actually saving for one is what takes loads of discipline.…

How to Make Fast Money

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Most of us have been there: no matter how carefully we budget, life happens and we are faced with the dilemma of how we are going to buy groceries or put gas in the car on top of paying our bills.

Sometimes there is just not enough money to cover everything you need. You need cash, and you need it now.

These are things I’ve tried and had success with during those lean times in my life:

Cash in your coins

Make use of all that loose change just sitting around your house. Look in the junk drawer, old purses, the pockets of last season’s clothes buried deep in the closet, the couch cushions, and the car.

Take them to a Coinstar machine at your local grocery store for a moderate fee (8.9 cents per dollar in the U.S., 9.8 cents in Canada). Or check with your bank. Some banks have coin machines that do not charge a fee. Others will accept rolled coins.

Sell your books, CD’s, DVD’s or video games

If you’ve got a lot of books, movies, and games that you no longer want, sell them. Half Price Books and Amazon are your best bets. Half Price Books doesn’t pay much but you can get your money that day.

Amazon has a bigger payout, but it requires a little money up front for shipping and there is the hassle of going to the post office (send the package media mail for cheaper rates), but you get the shipping fees back. Amazon deposits your payments into your checking account every 14 days. I made an extra $120 in one month for just a few hours work selling books on Amazon.

Sell household items and clothing on Craigslist

It helps if you have a digital camera, as things sell better on Craigslist if you have a photo. Small household appliances (are you really using that juicer or espresso maker?) are big sellers, as well as children’s clothing that’s in good shape.

I once made $250 in a month selling things on Craigslist, and as a bonus, I cleared a lot of clutter from my house. If selling things individually seems too much of a hassle, have a garage sale. If you don’t have a garage, ask a friend if you can borrow theirs.

Offer up a service

Pretend you’re a teenager again and do some babysitting or lawn mowing. Clean houses. Be someone’s personal assistant. Walk dogs. It may not be glamorous, but it’s a better option than having your electricity cut off.

Are you an expert at something? There is no limit to the services you can offer, from resume writing to web design to party planning. Advertise your services on Craigslist, create flyers, and ask your friends and family to spread the word.…