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Do You Have Savings In Case Of An Emergency? 1 In 4 Americans Have Zero Emergency Savings

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As the economy continues to be stagnant and the unemployment rate continues to be high, a recent poll by BankRate.com found that still far too few people are preparing for the possibility of a job loss or a long term financial emergency.

Over 6 million people have been out of work longer than six months, yet only 24 percent of Americans have at least six months' expenses in an emergency fund. An equal 24 percent have nothing tucked away for a rainy day. And 22 percent have some savings, but not enough to cover even three months' expenses. Those under age 30 and the lowest-income households were most likely to report having no emergency savings at all.

As the poll found, only 24 percent of Americans have saved a minimum of 6 months of expenses in an emergency fund or saving account of some kind.  To be honest I guess I'm not surprised that in our credit focused society that only 1/4 of people have saved up 6 months of expenses, but to some degree it's still sad that so many people are unprepared.  Are they hoping that someone else – or the government – will pick them back up when they've fallen?  I wouldn't count on it.

emergency savings

 

Why Are Emergency Funds Important?

There are a variety of reasons why I think emergency funds are more important than ever.

Bad Things DO Happen

I think a lot of people have the outlook that bad things happen to other people, or that if something bad does happen, it won't be that big of a deal.   The thing is, most of us are going to have a major negative event at some point.

Money magazine says that 78% of us will have a major negative event happen in any given 10-year period of time.

78% of us are going to have a major negative event to deal with in any 10 year period. I know that has certainly held true for our family has we've had to deal with several major negative health events. So if you haven't had one recently, you may be due.

Emergency Savings Help You Bounce Back Quicker

The fact that you have an emergency fund can help you to weather any number of storms from a layoff to a major health event.  While you can't always avoid bad situations, when you have an emergency fund you're able to bounce back that much quicker.  When you don't have an emergency fund the sad fact is that people end up in foreclosure, bankruptcy and other horrible situations I wouldn't wish on my worst enemy.

Why not plan ahead and avoid all those things?

Emergency Savings Give Peace Of Mind

When you  have emergency savings you'll have a lot more peace of mind when the waves start to get higher and the adversity starts showing up.  When you've got emergency savings, insurance and a backup plan, you won't be as worried about some of the bad things that can happen.

Have A Backup Plan

So many have not planned ahead for the negative events that will happen in life.  They don't have emergency savings, they don't have insurance and they are just hoping that someone else will cover the bill for them.  While in some cases that may happen, far too many will find that there isn't anyone there that they can rely on, including the government.

Do you have an emergency fund saved up?  How much are you saving in case of an major negative event?  Why do you think so few people save up in case of an emergency?

Do You Know What’s Important? Spending And Priorities

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One of the most challenging aspects of personal finance is identifying what is important — and then keeping your spending in line with what you value. Because personal finances are, well, personal, each person has their own ideas of what is most important. They key is to decide what is important to you and then create a spending plan that reflects your priorities.

What's Important to You? Identifying Your Values

Different people value different things. Before you can create a financial plan that reflects your personal values, you need to reflect on what you value. If you value more time with your family, you might choose a career path that allows you to be at home more, or you might move closer to your work so that time isn't spent on the commute. If helping others is important to you, chances are that you donate money to charitable causes or volunteer your time. Those who enjoy travel might spend money on vacations or frequent mini-trips. Others prefer to stay home, and spend money on making their homes as comfortable as possible.

Deciding what is most important to you is not a matter of “right” or “wrong”. It's more of an issue of what you prefer. Write down the things that are most important to you, and then rank them. Be quite honest. If saving up for a family vacation is more important than giving money to the food bank, rank your list in such a manner. I don't care if I leave a pile of cash for my son to spend after I'm gone, so my financial priorities focus on a modest and adequate retirement fund, with a bigger budget for fun now (including family fun).

Bringing Your Spending in Line with Your Priorities

My husband and I have always believed that giving to our church is a must, so our spending has always including tithing. However, not all of our spending has always been in line with our priorities. We enjoy eating out and trying new foods. For a while, though, we had a premium cable package — even though we don't watch that much TV. We realized that by scaling back the cable package, we could eat out more. We barely miss the premium cable channels. Of course, the value my husband places on ESPN, NFL Network and MLB Extra Innings is the reason that we still have cable at all.

Look over your spending, and see if it matches with your priorities. If you have listed early retirement as a priority, it doesn't make much sense to spend money on a new car. Instead, put more money toward your retirement fund, and buy a less expensive used car. If your biggest priority is paying down debt, look at your spending. Are you buying lunch every day or getting the latest movie when it comes to DVD? This doesn't jive with your debt pay down priorities. Be honest about your spending, and how it matches up with what you actually want out of life. Then see what adjustments can be made so that your spending matches your values.

Does your spending match your values?  What things could you cut to better meet your goals and priorities?

7 Creative Ways To Save Money On Your Vacation

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In today’s economy, it’s already hard to enough to scrounge up enough spare funds to take a trip. Then to make matters worse, higher oil prices have sent the cost of airline tickets into the stratosphere and of course driving is no longer an affordable alternative, either. However if you get creative, you still might be able to afford a trip once in a while. Here are 7 ways to save money on vacations – some common while others you might not have thought of!

#1. Skip the restaurants and head for the grocery store
It’s been drilled into our minds that vacations = eating out. But is that really necessary? Even if your hotel doesn’t have a kitchenette, you can still save money by hitting up Trader Joes or a cheap supermarket for some premade dishes – or better yet – bring food with you from home packed in a cooler (if you’re driving). Even if you only do this for half the meals during your trip, you will be saving a tremendous amount of money.

#2. Venture where others don’t want to go
With all the violence in Mexico, package deals for traveling there are looking mighty good these days. Of course, there is a risk/reward thing here, but many claim as long as you stay at the resort you should be pretty safe. If that works for you, then it might be a lot cheaper than traveling to one of those hot Caribbean tourist destinations.

#3. Discounts for students, seniors, military, etc.
If you’re going to a touristy area in the United States – such as Orlando – there’s a good chance that many of the amusement parks, transportation services, and even some restaurants accept discounts for various groups like senior citizens, military, students, AAA members and so forth. So make sure you bring all your cards with you!

#4. Milking a credit card signup promotion
First of all, I would like to say that anyone who has a tendency to get into credit card debt should avoid this tip! That being said, if you can use a credit card without raking up a balance, then there are tons of offers out there for airline and hotel credit cards that might save you some money. For example, the Hyatt credit card is offering 2 free nights at any Hyatt hotel with no restrictions whatsoever. Their rooms can easily run $300 to $500 a night, so the dollar value of the Hyatt credit card offer is significant. For a complete comparison of offers, check out Smart On Money's credit cards page!

#5. Group travel deals
We all know sites like Groupon,  LivingSocial and Moolala are all the rage right now for buying restaurant gift certificates and the like. These group buying sites now offer travel packages too, but I must warn you, they are a hit or miss. Sometimes what’s offered truly is a good deal, while other times it’s only a discount on an inflated price that no one pays anyway. Regardless, they are definitely worth checking out. In addition, you can also snag some great deals through more traditional group travel venues, like Apple Vacations (over the years I have personally got a couple amazing offers through them that were not found on any of the travel websites).

#6. Home/apartment swapping
Even the cheap hotels cost a lot these days (in my opinion at least) so why not consider a house or apartment swapping arrangement? There are a number of websites available where you can arrange to either rent someone’s unused room/apartment/house – or – you can do a trade arrangement where both parties will literally switch homes for a week or so. As far as the latter option, I’m not sure I would feel comfortable having strangers in my own apartment, but I wouldn’t mind paying to rent someone else’s if it was cheaper than staying at a hotel!

#7. Avoid souvenirs and shopping!
When I was a kid, we would go on a family trip once every couple years and I would always buy a bunch of junk wherever we went. Do I have any of that stuff now? Nope! Just goes to show what a huge waste of money it was. But fortunately, it taught me early on what a waste it is to spend money on trinkets and other crap that you don’t need (and really has little to do with your vacation spot since it’s probably made in China). The best souvenirs are memories and if that’s not good enough for you, then take a bunch of pics using your digital camera!

This post was written by Michael from CreditCardForum.com, which is a forum and blog for all things credit, including reviews of the best travel rewards credit cards.

How Much Of My Annual Pay Should I Be Saving For Retirement?

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Over the past few weeks I've been noticing quite a few searches coming to this site with people putting together their financial strategy for the new year, and asking one important question. How much annual pay should I be saving for retirement? It seems like a lot of folks are just unsure about how much they should be saving, and they're worried that they won't have enough, especially given the current economic climate, and debts they may be trying to pay off first.

Today I thought I'd do an examination of this question, and talk about what some of the different thinking on the topic is.

How Much Should I Save For Retirement?

There are several viewpoints that people can come from when trying to figure out how much to save for retirement.  Their calculations all seem to take into account different assumptions and criteria, so it's important to look at them all, and figure out which you think would work best for your situation.

Some of the criteria that may be important when calculating how much you'll need include how long you expect to live, the costs of health care in the future, how much inflation we'll see and what type of lifestyle you're living.  Also important are your age, your current income, how much you've already saved, your employment prospects in the future and how much you're willing to sacrifice now for future security.

With that said, here are some differing viewpoints on how to determine what you should be saving for retirement.

Save A Set Percentage.  Save 10-20% For Retirement

Most retirement calculators will use people's current pre-retirement income as a frame of  reference when calculating how much the person should save for retirement.  A lot of financial planners will say that most people will need anywhere from 70-100% of their income in retirement in order to be able to live a similar lifestyle when they retire.   To do that most of them will suggest that people save anywhere from 10-20% of their income.  While I think that it can be  a decent rule of thumb to save that much, in some cases it may not be adequate – or in some it may lead to saving more than you need.

Save As Much As You Can

Another viewpoint that I've seen quite often are the folks that just say to save as much as you can.  Some months that may mean saving just a little, other months it may mean up to 1/2 or 3/4 of their income.  Basically they feel that there is no such thing as “too much savings”.    They feel that if they can just save as much as possible  every month, they'll be fine when it comes to retire.   While this may serve some folks well, it may be a bit too simplistic for a lot of people.  It may lead to saving more than you need, requiring more sacrifice than is necessary.   It could also lead to saving too little if  the “saving as much as you can” is only a little bit of money at the end of the month after all other bills and even entertainment costs are paid.

Save What You'll Need

Some people believe that saving for retirement is an extremely personal thing, and you should really put together a personalized retirement package based on your own expectations and personal situation.  For example, they'll factor in things like their current income and age, amount of money the have already saved, their employment outlook,  how long they expect to live when they retire, and what type of lifestyle they'd like to live in retirement.  They also factor in things that may be changing when they retire like downsized housing costs, reduced auto expenses, and increased travel and entertainment expenses.   In other words they take a comprehensive look at what their current situation is, what they hope to do in retirement, and then they make a plan based off of what their ideal situation would be, and how much they will need.

Retirement Planning Is Very Personal

I think that retirement planning is a very personal process, and one that all families should undertake.  When looking at the viewpoints above I think I come down closest  to the “save what you'll need” camp, where you figure out your personal situation, factor in your personal needs and desires, and then come up with a number based off of those.    Once you come up with a number – add 10% to it, better to have too much saved than too little.

While I understand that getting into the nitty gritty details is probably the best idea, I know not everyone will take the time to do that.  If you don't go through with it, at least stick to the old 10-20% rule, and start saving for your retirement as early as you can!

List Of Retirement Calculators

Here is a list of retirement calculators I found via getrichslowly.org.  The ones on this list take into account more criteria than just income, and will probably give you a better picture of what you need to save.

Have you figured out what your retirement savings number is, and how much are you saving towards that number today?  How did you determine your goal?  Do you think you'll reach  it?

15 Simple Tips For Cheaper Car Insurance Rates

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Saving money on car insurance is easier than you think… with a little bit of self education. Here are 15 simple things you can do that will save you money, while better protecting your car and its occupants.

So have at it – become a confident, educated consumer and make sure you pay the lowest possible price for your car insurance!

15 Tips To Get Better Insurance Rates

  1. Understand insurance companies – The auto insurance industry is divided into three types of businesses: Direct Agents, Independent Agents who sell the insurance of various companies, and Exclusive Agents who work on commission and can only sell one brand of insurance. If you have a good driving record, it’s likely you’ll get the best deal from a direct agent because they remove the middle man.
  2. Shop around – This is easily one of the most important factors to consider. Don’t take quotes from just a couple auto insurance companies. Instead, really look into what each has to offer and which discounts they can give you.
  3. Ask for insurance advice at your body shop – Your local body shop works with insurance companies and their adjustors nearly every day. Ask them which companies they prefer and which have the smoothest claims process.
  4. Check with your state’s insurance department – Depending on which state you’re in, many publish consumer complaint data and complaint ratios that show how many consumer complaints have been made against each company. Make sure you choose a company that you’re comfortable with and has gotten good reviews.
  5. Slow down – If you’ve had several speeding tickets, you’re much less likely to get discounts for safe driving.
  6. Etch your VIN – Studies have shown that cars with an etched-in VIN are much less likely to get stolen. By avoiding a stolen car, you’ll avoid a claim.
  7. Verify the accuracy of your policy – If you haven’t done so, take a minute to browse through your policy to make sure everything is correct. You’d be surprised at how quickly small charges can add up.
  8. Avoid lapses in coverage – Even a few weeks’ lapse in coverage can make you ineligible for discounts. If you’re in the process of switching carriers, make sure you don’t quit your previous carrier until the new coverage takes effect.
  9. Don’t claim small amounts – If you often make small claims (less than $500), you may have to pay a higher premium when it comes time for renewal. If you make a significant amount of claims in one year, your insurer may not want to cover you at all. Next time you have a claim, make sure it’s worth it in the long run.
  10. Limit the number of people who drive your car – The more people you have listed as drivers, the higher your premium will be. Teenagers and young adults under 25 are among the most expensive drivers to add to the policy.
  11. Verify the accuracy of your VIN – Most drivers are unaware of this, but an inaccurate VIN (even if it’s off by just one digit) can affect your auto insurance quote. Double check your VIN to ensure you’re not being overcharged.
  12. Mind your credit score – More and more auto insurance carriers are considering credit scores when giving you a quote. Sometimes, having bad credit can end in you paying up to 50 percent more. So, make sure to pay your bills on time and check that there are no items on your credit score that aren’t yours.
  13. Evaluate insurance costs when purchasing a new vehicle – When considering a new car, get a quote on your insurance rate, as the year, make, and model can make quite a big difference. Newer, sporty cars will be significantly more expensive to insure than used, family-style cars.
  14. Purchase a low profile car – Similar to the above, know that cars that are expensive to repair or have a high theft rate will end up costing you quite a bit more to insure.
  15. Don’t “pimp your ride” – Research has shown that adding modifications to your car, like a rear spoiler or lowering the suspension, can nearly double the cost of coverage.

 

 

 

 

 

And there you have it! Next time you’re shopping for new auto insurance, keep in mind the above tips – you may be surprised just how much money they can save you in the long run.

This is a guest post from Pam King.  Pam writes on frugality, safety and insurance literacy for Direct General, a provider of cheap car insurance . When not saving money on her insurance, Pam enjoys knitting, NASCAR, family and watching rollerderby! :)

Save Money On Black Friday By Planning Ahead: Comprehensive List Of Black Friday Deals Sites

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Black Friday.  Those two words are enough to instill pure joy into the hearts of Christmas shoppers across the United States.  It's a day of sheer indulgence – of getting the things you want, and of getting a good deal while you're at it.

But here's the thing. You need to plan ahead. If you don't you'll find that you could end up spending a lot more money than you had planned on, and the good deals that you've gotten are minimized by the things you bought that you didn't need.   So it's important to plan ahead.

Save Big On Black Friday… If You Plan Ahead

There are some things you can do in order to get the best deal on your Black Friday shopping.

  • Make sure to know in advance what you're buying. Put together a list of the things you want, and don't buy anything not on that list, no matter how tempting.
  • Set a spending limit. Take your money out in cash before you head out.Don't go over your spending limit by only using cash. When you run out of budgeted money, you're done!
  • The best deals aren't always on Black Friday: Check deals before Black Friday – you may find a better price – even during Black Friday week pre-sales.
  • Bring a friend: Bring a friend with you. They can keep you company while you wait, and you can divide and conquer to get the most popular items once the store opens!
  • Don’t go out on Black Friday!: Sometimes the best way to save on Black Friday is to just not go out!  Sometimes the best deals you can find aren't even found on Black Friday.  If you're creative you an find better deals by stacking coupons and sales, finding one time only discounts, etc.

So there you go, a few helpful hints to help you succeed on the big day.

How Do I Find Out What The Hot Deals Are?

Black Friday can be a great day to find some hot deals on the items you were thinking about buying anyway.  But where do you find what deals are available at what stores?   Some of the places I’ve found great information on Black Friday Deals include.

Looking For A Specific Item?

If you're like me you may just be looking for a specific item to give to someone for Christmas.  For example, last year I was looking for a GPS for my in-laws.  So how do you find all the hot deals on GPS units?  FatWallet.com has put together a cool Black Friday ad filter that allows you to sort the all the Black Friday deals by category, type, brand, price, free shipping etc. Using a tool they put out last year I was able to find a great deal on my in-laws new GPS.

Which Items Are Popular?

Sometimes you're going to get a couple of different items, but you're not sure which one will run out quicker – so you can go there first. To help you in your game plan, check out this “most wanted” list from gottadeal.com.  The list will tell you what some of the most wanted items at each store are – so you can prioritize your Black Friday shopping list.

More Black Friday Tips And Tricks