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Money Saving Tips

A Sure Way to Make Every Single Penny of Your Savings Count

Let me guess…

You are also one of those people who go through the pain of carefully budgeting all their finances at the beginning of the month. But, half way through the month, things take a negative turn and you are stuck asking yourself how you got here.

Frankly speaking, money has a way of mysteriously disappearing. Almost everyone who works has had this feeling at one point or the other. It’s not like there are holes in our pocket so where all the case could be going?

Budgeting is a way of life and a smart one at that. Way better than living things to chance. It doesn’t matter whether you are a multi-billionaire or salary worker. It always helps to keep your daily, weekly and monthly expenditures in check.

money saving ideas

And given the right measures, you can really prioritize and spend money on the things that matter the most. Though it might be tempting to splurge on that eye-popping leather jacket you can’t help but eye every day on your way home. The financial backlash might be too much to bear in the long run. However, given proper planning of your budget, you can save enough to buy just about anything you want.

It’s really just a matter of time.

After making bill payments and other necessary expenses you might be left with some amount of money. The question is what do you do with all that cash then? After all, you earned it. Most people spend it differently depending on their nature and taste.

In other to achieve the most of your paycheck and do more with the little you have, nothing can be left to chance. This is the point Zero-based budget comes into play.

As tradition will have it, most budgets include two basic columns. One is the income column and the other the expenditure column. Assuming for a minute you had $10 000 as your income and your expenditure for the month is $75 000. Then you are left with $25 000 without any obligations. Money you can blow. And most people blow.

Wrong move

Using the Zero-based budget, you follow through the saving processes of the traditional budget but just your left over got to be zero. Not $100, $50 but $0. Every penny down to the very last one will be accounted for. End of the budget.

I bet you wondering where the $25 000went, right?

That’s what to the Zero-based budget all is about. Using this budget type you are able to account for things you formally live to chance. Expenses like the gas refill and the latte you just can’t seem to do without. These all need to be accounted for. Then you allocate a huge chunk of the remaining cash as savings.

I know it sounds scary

But let’s not dwell on that. Rather let’s consider the benefits we will derive from this new and improved means of budgeting. For instance, what do you do when you get a flat tire and all that left over cash has been spent to the last dollar?  When you run out of groceries?  Or when that craving for a Subway just won’t go away. What do you do then?

Now I hope you beginning to see why you have to account for everything.

During the process of building your Zero-based budget, all normal and obligatory expenses have to be listed first. Car insurance, rent, transport fairs, etc. – all these form part of the fixed payment since they come due approximately at the same time every month.

Next, comes the list of long-term items such as annual vehicle inspections, medical checkups or property taxes. Maybe you are planning any big purchases, e.g. a new car. This can also be added to this list and the total costs broken into twelve equal portions.

But you just not there yet.

Now can an equally important section; miscellaneous money. So you allocate a fair amount for expenses you will make on movies, gas, coffee and what have you. I mean, you can even create your own category just in case there is something that can’t fit into any of the above-listed categories.

Finally, an emergency fund is added. This pop up unexpended and the wise person is prepared for anything. Occurrences like repairs, and flat tires will fall under till category.

It’s undeniable, small expenses like fast-food runs, $4 here $5 and before you even know it, you’ve eaten through $500 with really nothing to show for it.

I used to experience it all the time. Until I was taught the Zero-based budget. And it has totally transformed the way I handle my personal finance. Hope it will do you as much good as it did me. Please do ask any questions you may have in the comments section below.

Enjoys writing about the post-industrial revolution, personal finance and changes such as how job postings for employers can facilitate the much-needed change in today’s world.

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Insurance

6 Considerations in Buying Long Term Care Insurance

The truth is this:buying long term care insurance is a necessity for most Americans at this point.After all, covering the costs out of pocket is a big risk that only the truly wealthy can afford. Moreover, no one really wants to spend down their assets in order to qualify for Medicaid and receive long term care benefits. And besides, it’s too risky to rely on Medicaid alone because of the looming budget cuts.

Yes, insurance policies may be costly, but there are effective ways in which Americans can reduce long term care insurance premiums. At the end of the day, the benefits outweigh disadvantages.

However, if you are still unsure if this type of coverage matches your needs, then here are six considerations in buying long term care insurance.

Long Term Care Insurance

Financial Readiness in Covering Care

According to Genworth’s Cost of Care for 2016, the average price of staying in a nursing home for a year is $92,378. As these figures have been increasing in the recent years, there is no telling how much it will be when we need care services.

Without coverage, people would have to find other means to pay for these services. In fact, some have even lost their lifetime savings as they try to cover the expenses. Additionally, many are losing confidence in saying that they have the financial means to live comfortably during the golden years. Studies show that only 21% can confidently say that they have saved enough money for retirement.

A Means to Safeguard Your Family Members

People often forget this, but family members also take the blow that comes from the lack of planning. This is seen in the growing numbers of individuals sandwiched between providing care to an aging loved one, supporting and raising a child, and managing a career. In fact, 1 of every 8 individuals age 40 to 60 is in that very situation at the moment.

Buying long term care insurance not only protect your child or spouse from joining the Sandwich Phenomenon, it also provides a good safety for when your parents need your help.

Your Age When Buying Long Term Care Insurance

Many Americans often neglect to consider their age in buying long term care insurance. They would often delay even thinking about it because people typically need the services in their 70s or 80s. In doing so, they end up becoming uninsured, spending their retirement income and outliving it eventually or worse, they become a financial burden to their loved ones.

However, there is a reason why insurance experts are adamant in pushing Americans to start planning early. The general rule is that the younger and healthier you are when you buy long term care insurance, the lower the premiums will be. This also means a higher chance of being granted a policy. The prime age to purchase according to experts is when you’re in your late 50s to early 60s.

Where You Live

Care costs vary depending on the location, so be sure to check how much the charges are in your state. The costs of care are more affordable in states such as Louisiana and Alabama compared to those in states like Alaska or Massachusetts.

Here’s the list of the 15 most expensive states for long term care based on Genworth’s recent survey:

  1. Alaska – $117,800
  2. Massachusetts – $73,307
  3. Connecticut – $72,671
  4. Hawaii – $71,820
  5. New Jersey – $68,833
  6. Delaware – $68,472
  7. New Hampshire – $66,044
  8. New York – $65,852
  9. Maine – $64,423
  10. North Dakota – $64,010
  11. Vermont – $63,139
  12. Washington – $61,704
  13. California – $61,239
  14. Rhode Island – $60,789
  15. Maryland – $60,305

Where You Want to Receive Care

One of the coveted freedoms long term care insurance provides is the ability to choose where you want to receive care. Buying long term care insurance provides the means to age in place, move to a nursing home, assisted living facilities, CCRCS and other retirement communities. Home care is typically covered by most long term care insurance policies, but make sure to consult with your insurance agents regarding this.

Asking these questions can help you choose the most fitting facility for your future care needs:

  1. Can I receive care while at home? And who will take care of me while I’m at home?
  2. What long term care services and facilities are available in my area?
  3. What type of long term services or services can provide me the care I need?

The Long Term Care Insurance Carrier

Truthfully, insurance policies vary depending on the insurance company that you approach. Consider companies that have A+ or A++ ratings from A.M Best, Moody and the likes to make sure that you are choosing a company with a high financial strength. This is why people are strongly encouraged to contact various carriers when requesting long term care insurance quotes.

Do not settle for the first quote that you see and do not be discouraged if the prices you are faced with are too high. Shop around, request for instant long term care insurance quotes onlineand consider each carefully.