The Big 4 Retirement Worries and How to Beat Them

This post The Big 4 Retirement Worries and How to Beat Them appeared first on Daily Reckoning.

The #1 concern most Americans have when it comes to retirement is paying for health care.

According to a recent survey from Merrill Lynch and Age Wave, those age 65 and over ranked health as their greatest source of worry.

With rising health care costs and longer life expectancies, it’s no wonder covering medical expenses tops most retirees list of retirement worries.

Add to that an unpredictable future for our Social Security system, market corrections, and uncertain taxes, it’s reasonable to feel a bit on edge these days.

However, Americans do retire successfully. Studies tend to show current retirees being less concerned about these issues than those approaching retirement. They have the benefit of experience, I guess.

Although I can’t predict your future, a bit of insight and planning can still go a long way to help ease some of your retirement worries.

So today, I’m going to debunk four of the biggest worries nearly all retirees have on their mind.

Retirement Worry #1: Health Care

You see healthcare top many retirement lists and studies as a major concern because many health issues are age related.

While you can’t control your genetic makeup, you can make good choices when it comes to eating healthy and exercising regularly. In addition, I find simply giving people their options when it comes to healthcare coverage can ease a lot of the uncertainty.

Here are the basics…

Most people become eligible for Medicare when they turn 65. Medicare is made up of several parts.

Medicare Part A is hospital coverage. It’s generally free, with some exceptions.

Medicare Part B is medical insurance, and you pay a premium for coverage.

Medicare Part C, aka Medicare Advantage, is an optional replacement for traditional Medicare. You might pay more for an optional Part C plan.

Medicare Part D is your prescription drug coverage. Pard D costs will vary.

So unless your prior employer has your health insurance covered for life, you’ll most likely go onto Medicare.

Choosing the right plan depends on your health status, family history, and budget. It’s also not a bad idea to consider a Medicare Supplement plan, or a Medigap policy.

A major reason to consider a Medigap policy is if you plan on traveling.

Traditional Medicare doesn’t cover you when you travel outside the U.S. But, most Medigap policies do.

The last thing you should consider is long-term care insurance. The data isn’t pretty. Coverage is expensive and your alternative of no coverage can be worse.

The main things to consider here are whether or not your assets are needed for someone else to maintain a certain standard of living. And, whether or not you’re looking to leave a legacy.

Those are two major questions you need to ask before you consider long-term care insurance.

Retirement Worry #2: Outliving Your Money

The second biggest worry is fear of running out of money. With longer life expectancies and rising costs, the amount of money it takes to maintain a comfortable standard of living in retirement is significant.

Step one is to figure out how much you’ll need saved to retire comfortably. You can do this a number of ways but my suggestion would be to find a few different retirement calculators and run the numbers.

Once you have a few different sets of numbers, choose the worst case scenario and build your savings plan around that number.

The sooner you know how much you should have saved the better. Sometimes it can seem like a pension, Social Security and some modest savings will be enough. But that isn’t always the case.

Inflation and other uncontrollable factors can quickly eat away at your savings. It’s important to keep your spending to a minimum early in retirement, this way you give your money time to grow and you’ll have extra saved should you run into trouble later on.

Retirement Worry #3: Not Enough Cash Flow

This worry might seem similar to the second, but it comes from a different place. A lot retirees worry that their income won’t be enough to cover basic living expenses.

The fate of Social Security is up in the air. It likely won’t disappear but it could be significantly reduced, leaving a lot of retirees struggling to pay their bills.

The fix here is putting in place a solid drawdown strategy. The most common strategy is the 4% rule, where you withdraw 4% of your savings in the first year of retirement, and each year after that you take out the same dollar amount, plus an inflation adjustment.

For example, if you have $1,000,000 in retirement savings, the first year you would withdraw $40,000. Then, over the course of that year, inflation runs 3%. The next year, you’d withdraw $41,200.

There are a number of different drawdown strategies, the point being that having a sufficient cash flow is critical in retirement.

Retirement Worry #4: Debt

The last big worry is paying down debt. This worry probably wouldn’t have topped the list 20 years ago. But today retirees carry a lot more debt.

Bigger mortgages, multiple credit cards — it’s a major issue that retirees face. It’s not that you can’t ever have debt in retirement, but you need to be able to manage it.

If you can, pay off your credit cards before you retire. You don’t want your retirement savings getting eaten up by high-interest payments.

In some cases, you’ll want to go into debt. Maybe you need to replace your vehicle and the interest payments are low enough that it makes sense to take out a car loan.

You might also downsize or buy a second vacation property with a mortgage. So long as you’re not relying on debt to fund your retirement and you have a plan in place to manage the debt you owe, you can overcome this worry.

The bottom line is that it’s natural to feel some anxiety about retirement. With the right plan is place and a grasp on what’s to come, you can mitigate most of your fears fairly easily.

To a richer life,

Nilus Mattive

Nilus Mattive

The post The Big 4 Retirement Worries and How to Beat Them appeared first on Daily Reckoning.

The Big 4 Retirement Worries and How to Beat Them

This post The Big 4 Retirement Worries and How to Beat Them appeared first on Daily Reckoning.

The #1 concern most Americans have when it comes to retirement is paying for health care.

According to a recent survey from Merrill Lynch and Age Wave, those age 65 and over ranked health as their greatest source of worry.

With rising health care costs and longer life expectancies, it’s no wonder covering medical expenses tops most retirees list of retirement worries.

Add to that an unpredictable future for our Social Security system, market corrections, and uncertain taxes, it’s reasonable to feel a bit on edge these days.

However, Americans do retire successfully. Studies tend to show current retirees being less concerned about these issues than those approaching retirement. They have the benefit of experience, I guess.

Although I can’t predict your future, a bit of insight and planning can still go a long way to help ease some of your retirement worries.

So today, I’m going to debunk four of the biggest worries nearly all retirees have on their mind.

Retirement Worry #1: Health Care

You see healthcare top many retirement lists and studies as a major concern because many health issues are age related.

While you can’t control your genetic makeup, you can make good choices when it comes to eating healthy and exercising regularly. In addition, I find simply giving people their options when it comes to healthcare coverage can ease a lot of the uncertainty.

Here are the basics…

Most people become eligible for Medicare when they turn 65. Medicare is made up of several parts.

Medicare Part A is hospital coverage. It’s generally free, with some exceptions.

Medicare Part B is medical insurance, and you pay a premium for coverage.

Medicare Part C, aka Medicare Advantage, is an optional replacement for traditional Medicare. You might pay more for an optional Part C plan.

Medicare Part D is your prescription drug coverage. Pard D costs will vary.

So unless your prior employer has your health insurance covered for life, you’ll most likely go onto Medicare.

Choosing the right plan depends on your health status, family history, and budget. It’s also not a bad idea to consider a Medicare Supplement plan, or a Medigap policy.

A major reason to consider a Medigap policy is if you plan on traveling.

Traditional Medicare doesn’t cover you when you travel outside the U.S. But, most Medigap policies do.

The last thing you should consider is long-term care insurance. The data isn’t pretty. Coverage is expensive and your alternative of no coverage can be worse.

The main things to consider here are whether or not your assets are needed for someone else to maintain a certain standard of living. And, whether or not you’re looking to leave a legacy.

Those are two major questions you need to ask before you consider long-term care insurance.

Retirement Worry #2: Outliving Your Money

The second biggest worry is fear of running out of money. With longer life expectancies and rising costs, the amount of money it takes to maintain a comfortable standard of living in retirement is significant.

Step one is to figure out how much you’ll need saved to retire comfortably. You can do this a number of ways but my suggestion would be to find a few different retirement calculators and run the numbers.

Once you have a few different sets of numbers, choose the worst case scenario and build your savings plan around that number.

The sooner you know how much you should have saved the better. Sometimes it can seem like a pension, Social Security and some modest savings will be enough. But that isn’t always the case.

Inflation and other uncontrollable factors can quickly eat away at your savings. It’s important to keep your spending to a minimum early in retirement, this way you give your money time to grow and you’ll have extra saved should you run into trouble later on.

Retirement Worry #3: Not Enough Cash Flow

This worry might seem similar to the second, but it comes from a different place. A lot retirees worry that their income won’t be enough to cover basic living expenses.

The fate of Social Security is up in the air. It likely won’t disappear but it could be significantly reduced, leaving a lot of retirees struggling to pay their bills.

The fix here is putting in place a solid drawdown strategy. The most common strategy is the 4% rule, where you withdraw 4% of your savings in the first year of retirement, and each year after that you take out the same dollar amount, plus an inflation adjustment.

For example, if you have $1,000,000 in retirement savings, the first year you would withdraw $40,000. Then, over the course of that year, inflation runs 3%. The next year, you’d withdraw $41,200.

There are a number of different drawdown strategies, the point being that having a sufficient cash flow is critical in retirement.

Retirement Worry #4: Debt

The last big worry is paying down debt. This worry probably wouldn’t have topped the list 20 years ago. But today retirees carry a lot more debt.

Bigger mortgages, multiple credit cards — it’s a major issue that retirees face. It’s not that you can’t ever have debt in retirement, but you need to be able to manage it.

If you can, pay off your credit cards before you retire. You don’t want your retirement savings getting eaten up by high-interest payments.

In some cases, you’ll want to go into debt. Maybe you need to replace your vehicle and the interest payments are low enough that it makes sense to take out a car loan.

You might also downsize or buy a second vacation property with a mortgage. So long as you’re not relying on debt to fund your retirement and you have a plan in place to manage the debt you owe, you can overcome this worry.

The bottom line is that it’s natural to feel some anxiety about retirement. With the right plan is place and a grasp on what’s to come, you can mitigate most of your fears fairly easily.

To a richer life,

Nilus Mattive

Nilus Mattive

The post The Big 4 Retirement Worries and How to Beat Them appeared first on Daily Reckoning.

Control Your Frivolous Spending in 6 Easy Steps

This post Control Your Frivolous Spending in 6 Easy Steps appeared first on Daily Reckoning.

One of the downsides to saving large sums of cash is it starts to burn a hole in your pocket.

When I was a kid, my grandparents would occasionally give me a $10 bill after I’d go visit for a week. I had zero tolerance for saving back then, so I would spend it on candy and comic books almost immediately.

Since then, I’ve built up a pretty good tolerance against spending cash. I’ve seen too many financial struggles and missed opportunities to not have a decent stockpile of cash in my bank account.

As of late though, my tolerance against spending is being tested. With a looming bear market, hoarding cash doesn’t feel like a bad investment.

The problem is this extra money starts tempting you. And, the last thing you want to do is waste your hard saved cash on something frivolous.

So, what should you do?

Here are 6 “easy” tips to help you control spending. I say easy because none of these require any extra discipline or extravagant measures. All you’ll need is a calculator, a pen and pad of paper.

The fastest way to boost your savings is by not spending what you have. If you want to accumulate more money, you need to learn some tricks to keep your spending urge at a minimum. Here are some tips I like:

Tip 1: Calculate How Much in Gross Income Is Needed to Buy

How much does it cost to buy a $90,000 Porsche 911 Carrera? It takes about $136,000 in gross income at a 30% effective tax rate. At a 25% effective tax rate, it requires $2,700 in gross income to purchase the newest $1,799 Macbook Pro.

Whatever you’re thinking about buying, multiply it by 1.5x to find out how much it really costs before tax. Suddenly, what you want to buy doesn’t seem as affordable.

Tip 2: Calculate How Many Hours of Work It Takes to Buy

If you work a salaried job, then you likely don’t pay much attention to your hourly rate.

However, understanding how much labor is required to afford something is sometimes the best strategy to give yourself some pause.

For example, to buy a $9,000 second-hand Rolex Submariner will take about 450 hours driving for Uber at $20/hour after operating costs. If you drive for 40 hours per week, that’s almost 11.5 weeks worth of work to purchase one watch.

Tip 3: Save 50% of Your After Tax Income Every Year

This might sound challenging, but I promise it’s not. As long as you’re maxing out your 401k and saving a certain percentage of your after tax income before you spend, you can afford to do whatever you want with your money after that.

But one idea I like is to max out your 401k and then save 100% of every other paycheck. Since most employers pay out twice a month, you can easily save at least 50% of your after tax income every year by following this plan.

It’ll be painful for the first 6 months, but after that you’ll adjust your living standards and it becomes easy.

Tip 4: Compare Yourself to Other People

If you make more than $35K a year, you’re in the top 1% of global income earners. Appreciate what you have compared to the billions of other people who weren’t lucky enough to be born in a developed country.

According to the UN world food program, some 795 million people in the world do not have enough food to lead a healthy active life. Simply comparing your circumstances to those less fortunate is sometimes enough to curb those impulse buys.

Alternatively, you can try motivating yourself by comparing your wealth and career success to other people your age who are doing better than you. Depending on your personality type, this can be really motivating and force you to keep boosting your savings in order to catch up.

Tip 5: Establish a Spending Goal

There’s a rule I like which states that whatever you want to buy, you should try to make at least 10x that amount first. For instance, if you want to buy a $30,000 car, try making $300,000 first. This is a tough rule to stick to but it forces you to achieve certain financial goals tied to big rewards.

What you’ll find is after spending all this time earning and saving enough to reach your big goal, you might lose the desire to actually buy what you originally thought you wanted.

Make your spending goals challenging so when you reach them it’s worth the pain to make the purchase.

Tip 6: Visualize the Opportunity Cost of Your Purchase

If the S&P 500 averages 7% a year for the next 10 years, you’ll have doubled any money you invest today in the index. Therefore, the $9,000 watch or $30,000 car you buy today might be worth $18,000 and $60,000 respectively in the future. Visualizing opportunity cost is one way to prevent spending, but it’s hard because it’s difficult seeing that far into the future. One easy way to see the future is by running your finances through a retirement calculator. You’ll quickly see whether you’re on track to retirement or not.

Boosting savings is not rocket science. Yes, it requires some discipline but if you follow these simple tips on how to curb your spending, you’ll build a high tolerance and see your bank account grow.

To a richer life,

Nilus Mattive

Nilus Mattive

The post Control Your Frivolous Spending in 6 Easy Steps appeared first on Daily Reckoning.

11 Habits You Need to Break Before You’re Broke

This post 11 Habits You Need to Break Before You’re Broke appeared first on Daily Reckoning.

I’m all for treating myself to some of life’s luxuries, but I won’t splurge to the point where it starts to hurt my finances.

Sadly, for a lot of Americans the latter is true.

In fact, the average US adult spends $1,497 a month on nonessential items, according to a recent survey conducted by OnePoll. That’s roughly $18,000 a year on things we can all do without.

The survey revealed that the average person spends about $20 per month on coffee, as well as $209 on dinners at restaurants and $189 going out for drinks with friends.

Survey respondents said they spend an average of $91 per month for cable, in addition to $23 for streaming movies and TV shows. Music streaming services averaged $22 a month, while other apps added $23.

Even the cost of health club and gym memberships was significant, averaging $73 a month, including classes.

One interesting finding was that Amerians make an average of five impulse buys per month – for a total of $109. But, the irony is the majority (58 percent) feel there are other important things they can’t afford…hmm.

The truth of the matter is we all have bad spending habits we need to work on. Today I’m going to walk you through 11 of the worst spending habits that drive financial experts wild.

The good news is that all of these can easily be fixed…

Bad Habit #1: Keeping All Your Money in One Account

I’m always surprised when I hear someone say they only have one bank account. Physically separating your money is the easiest way to set and stick to a budget.

Here’s what you should be doing: 1) Rename your checking account your spending/depositing account. Tie this account to your debit card. 2) Open a second checking account and designate this one to your bills.

Calculate your average bill tally from the 1st to the 15th, and from the 16th to the end of the month, and transfer that amount to your bills account every two weeks. This will stop you from overspending on your debit card because you’ll have already covered your bills.

This two-account setup will save you a lot of time and money by automating your budgeting.

Bad Habit #2: You’re always searching for deals

This might sound counter-intuitive, but searching for sales can sometimes set you further back. Out of the top ten reasons cited for overspending, two include sales: discounted items or “one-time only” flash sales that typically lead to more spending. The expression, I can’t afford not to buy it, couldn’t be more true.

Bad Habit #3: Not Saving “Found” Money

Did a rebate you sent in months ago finally come in? Did someone buy you a coffee unexpectedly?

“Found” money often gets wasted. Anytime you find unexpected money, transfer that money to your savings or bill accounts. You’ll be surprised how much this adds up with minimal effort on your part.

Bad Habit #4: Having Too Many Subscriptions

You sign up for a one-month free trial and before you know it, you’ve gone 6 months without realizing you’ve been paying this whole time. Too many people pay for monthly subscriptions they never use.

Review your credit card statements monthly and highlight any subscriptions you’re not using anymore. Cancel these as soon as possible or mark the next renewal date on your calendar so you know when to cancel.

Bad Habit #5: Keeping Up with the “Smiths”

It used to be you were trying to keep up with the Joneses. Except back then, it was just your next-door neighbor. Now, in an era of social media and 24/7 news cycles, everyone is your neighbor when you turn on your phone.

Don’t subscribe to this keeping-up temptation. What you see being portrayed online is not always a true portrayal of someone’s day-to-day. Set realistic expectations for how your life should look.

Bad Habit #6: Being Too Passive

How many items of clothing in your closet do you own that still have tags on them? Returning items. Calling your cable company to get a better rate. Negotiating a bank fee. These things all take time and a little bit of effort. But it’s time and effort well spent.

A twenty-minute phone call with your internet provider, could save you $15 a month. Multiply those savings by 12 and you’ve saved $180 a year from one phone call. It’s tempting to take the path of least resistance when it comes to your money, don’t do it.

Bad Habit #7: Paying fees

Fees are something I won’t tolerate. Bank fees, ATM fees, maintenance fees, they all add up and they’re all negotiable. If you look at your bank statements and notice you’re paying a significant amount in fees, you need to stop this immediately.

Write down all the fees you’re paying on a regular basis and choose at least three to slash. You might have to threaten to switch providers or change banks, whatever you need to do to get the fee waived.

Bad Habit #8: Not Automating Your Bills

Everyone should be doing this nowadays. If you’re still getting bills in the mail, there’s a good chance you’re forgetting to pay those bills some months or your payments are late.

Use your bills checking account to pay your bills without having to think about it.

You’ll save the hassle of having to remember and you won’t have to worry about paying late fees and other penalties.

Bad Habit #9: Wasting Food

The number-one money-waster is throwing away leftover food. According to a recent study, part of the reason for this phenomenon is that people are bad at reading food labels. Food date labels like “best before” and “sell by” are largely unregulated in the US.

84% of consumers discard food near the package date at least occasionally, says the study. Among date labels assessed, “best if used by” was most frequently perceived as communicating quality, and both “expires on” and “use by” as communicating safety.

Over one third of participants incorrectly thought that date labeling was federally regulated, and 26% were unsure.

Bad Habit #10: Thinking a Budget Means “No”

When you think of the word “budget” what comes to mind? For most people, they think a budget means they have to say “no” to everything. You can’t save for a vacation, if you’re saying yes to brunch with your friends. You can’t save for a new car, if you’re saying yes to new clothes every month.

That’s not necessarily true. A budget doesn’t mean no, it just means you need to start prioritizing your money.

Think of a budget as a pecking order for where your money goes. Whatever is left after the important nuggets get covered can go toward the less important “non-essential” wants.

Bad Habit #11: Ignoring Your Daily Habits

And just because you have a monthly budget, doesn’t mean you’re necessarily aware of all your day-to-day expenditures. If you want to quickly assess your weekly spending habits, run a 10-day budget.

Notice how many small things you didn’t realize you needed to budget for. You want to do this once a quarter for a few reasons.

First, it helps alleviate the paycheck effect, where you get paid and then spend your full paycheck two weeks later. Second, you’ll pay attention to daily fluctuations in your spending and be able to make adjustments as you go.

To a richer life,

Nilus Mattive

Nilus Mattive

The post 11 Habits You Need to Break Before You’re Broke appeared first on Daily Reckoning.

What Does Freedom Mean for You?

This post What Does Freedom Mean for You? appeared first on Daily Reckoning.

Two hundred and forty-three years ago, our Founding Fathers signed the Declaration of Independence, freeing our great nation from the rule of the British Empire.

On July 4th, we acknowledge their courage with celebrations all across the country. 

While you probably associate the fourth now with fireworks, cookouts, and summer mattress sales, I’m willing to bet you still hold freedom as one of your highest values.

But if you’re deeply in debt — or on shaky financial ground — fiscal freedom might seem like another 243 years away.

First, what does monetary independence mean to you?

For some people it’s a retirement number. Maybe $1 million in a 401(k), with your house paid off and expenses less than $1,000 a month. That person is probably more financially free than someone with $3 million in the bank and over $10,000 in monthly expenses. It all depends on your specific circumstances.

To me, monetary freedom is simply not having to base my decisions on financial constraints. You can achieve freedom with more money or less spending. It doesn’t really matter how you get there.

In the spirit of the holiday, I want to share with you four fiscal freedom principles. These should guide you throughout the rest of the year toward your own monetary independence.

Principle #1: Confront Your Spending

American households owe more than $1 trillion in credit card debt, according to the Federal Reserve.

Chalk it up to a lack of discipline to save or a meager salary that’s not enough, so you turn to borrowing to make ends meet.

No matter how you got there, it’s time to add up your debt and confront it — you’re not going to get ahead if you stay in denial.

And just like our forefathers had the courage to imagine a nation of liberty long before it materialized, you need to believe you can get yourself out of debt and stay out.

Starting this July 4th, commit to paying down your debt with a portion of every dollar that comes into your bank account.

Principle #2: Understand Your Investments

Just over half of Americans — 54% — invest in stocks, according to Gallup. While that number may sound decent, it still means there are millions of Americans missing out on their best chance at building real wealth.

Historically, the stock market has been the best place to build wealth over time. But you need to have some basic understanding of how investing works before you start.

As it stands, a lot of investors barely know what they’re invested in. For instance, among investors who own target date funds, the SEC found that only 48% knew that target date funds don’t provide guaranteed income after retirement.

Make sure you know what you’re getting into before you do it. But the bottom line is invest.

Principle #3: Improve Your Credit Score

Your credit score affects so many different areas in your life that you need to figure out how to improve your score.

If you have lousy credit, it impacts the rate you get on car loans, property, and all sorts of large purchases you make. The better your score, the lower your payments will be, and in turn the more money you can save.

Another reason you desperately want to start improving your credit score is because every inflated payment you make means those dollars can’t be invested elsewhere. Payments on large purchases typically last for many years. So, a bad credit score today will impact your lifetime savings dramatically.

Improving your credit score should be at the top of your list after this weekend.

Principle #4: Don’t Give Up

One of our Founding Fathers, Benjamin Franklin, famously said: “A penny saved is a penny earned.” America had to struggle hard for its own independence, but the payoff has been more than 200 years of freedom and prosperity.

If you truly want to achieve fiscal independence one day, it’s going to take some grit and self-discipline. You’re going to have to sacrifice short term pleasure for long term gain. But once you eliminate your debt, and continue saving and investing, you’ll eventually reach your monetary freedom day.

There are no magic shortcuts to wealth accumulation. If you apply the basics found in these four principles, you’ll be celebrating the rest of your life.

To a richer life,

Nilus Mattive

— Nilus Mattive
Editor, The Rich Life Roadmap

The post What Does Freedom Mean for You? appeared first on Daily Reckoning.

10 Spending Habits That Can Leave You Broke

This post 10 Spending Habits That Can Leave You Broke appeared first on Daily Reckoning.

I’m all for treating myself to some of life’s luxuries, but I won’t splurge to the point where it starts to hurt my finances.

Sadly, for a lot of Americans the latter is true.

In fact, the average US adult spends $1,497 a month on nonessential items, according to a recent survey conducted by OnePoll. That’s roughly $18,000 a year on things we can all do without.

The survey revealed that the average person spends about $20 per month on coffee, as well as $209 on dinners at restaurants and $189 going out for drinks with friends.

Survey respondents said they spend an average of $91 per month for cable, in addition to $23 for streaming movies and TV shows. Music streaming services averaged $22 a month, while other apps added $23.

Even the cost of health club and gym memberships was significant, averaging $73 a month, including classes.

One interesting finding was that Amerians make an average of five impulse buys per month – for a total of $109. But, the irony is the majority (58 percent) feel there are other important things they can’t afford…hmm.

The truth of the matter is we all have bad spending habits we need to work on. Today I’m going to walk you through 10 of the worst spending habits that drive financial experts wild.

The good news is that all of these can easily be fixed…

Bad Habit #1: Keeping All Your Money in One Account

I’m always surprised when I hear someone say they only have one bank account. Physically separating your money is the easiest way to set and stick to a budget.

Here’s what you should be doing: 1) Rename your checking account your spending/depositing account. Tie this account to your debit card. 2) Open a second checking account and designate this one to your bills.

Calculate your average bill tally from the 1st to the 15th, and from the 16th to the end of the month, and transfer that amount to your bills account every two weeks. This will stop you from overspending on your debit card because you’ll have already covered your bills.

This two-account setup will save you a lot of time and money by automating your budgeting.

Bad Habit #2: You’re always searching for deals

This might sound counter-intuitive, but searching for sales can sometimes set you further back. Out of the top ten reasons cited for overspending, two include sales: discounted items or “one-time only” flash sales that typically lead to more spending. The expression, I can’t afford not to buy it, couldn’t be more true.

Bad Habit #3: Not Saving “Found” Money

Did a rebate you sent in months ago finally come in? Did someone buy you a coffee unexpectedly?

“Found” money often gets wasted. Anytime you find unexpected money, transfer that money to your savings or bill accounts. You’ll be surprised how much this adds up with minimal effort on your part.

Bad Habit #4: Having Too Many Subscriptions

You sign up for a one-month free trial and before you know it, you’ve gone 6 months without realizing you’ve been paying this whole time. Too many people pay for monthly subscriptions they never use.

Review your credit card statements monthly and highlight any subscriptions you’re not using anymore. Cancel these as soon as possible or mark the next renewal date on your calendar so you know when to cancel.

Bad Habit #5: Keeping Up with the “Smiths”

It used to be you were trying to keep up with the Joneses. Except back then, it was just your next-door neighbor. Now, in an era of social media and 24/7 news cycles, everyone is your neighbor when you turn on your phone.

Don’t subscribe to this keeping-up temptation. What you see being portrayed online is not always a true portrayal of someone’s day-to-day. Set realistic expectations for how your life should look.

Bad Habit #6: Being Too Passive

How many items of clothing in your closet do you own that still have tags on them? Returning items. Calling your cable company to get a better rate. Negotiating a bank fee. These things all take time and a little bit of effort. But it’s time and effort well spent.

A twenty-minute phone call with your internet provider, could save you $15 a month. Multiply those savings by 12 and you’ve saved $180 a year from one phone call. It’s tempting to take the path of least resistance when it comes to your money, don’t do it.

Bad Habit #7: Paying fees

Fees are something I won’t tolerate. Bank fees, ATM fees, maintenance fees, they all add up and they’re all negotiable. If you look at your bank statements and notice you’re paying a significant amount in fees, you need to stop this immediately.

Write down all the fees you’re paying on a regular basis and choose at least three to slash. You might have to threaten to switch providers or change banks, whatever you need to do to get the fee waived.

Bad Habit #8: Not Automating Your Bills

Everyone should be doing this nowadays. If you’re still getting bills in the mail, there’s a good chance you’re forgetting to pay those bills some months or your payments are late.

Use your bills checking account to pay your bills without having to think about it.

You’ll save the hassle of having to remember and you won’t have to worry about paying late fees and other penalties.

Bad Habit #8: Wasting Food

The number-one money-waster is throwing away leftover food. According to a recent study, part of the reason for this phenomenon is that people are bad at reading food labels. Food date labels like “best before” and “sell by” are largely unregulated in the US.

84% of consumers discard food near the package date at least occasionally, says the study. Among date labels assessed, “best if used by” was most frequently perceived as communicating quality, and both “expires on” and “use by” as communicating safety.

Over one third of participants incorrectly thought that date labeling was federally regulated, and 26% were unsure.

Bad Habit #9: Thinking a Budget Means “No”

When you think of the word “budget” what comes to mind? For most people, they think a budget means they have to say “no” to everything. You can’t save for a vacation, if you’re saying yes to brunch with your friends. You can’t save for a new car, if you’re saying yes to new clothes every month.

That’s not necessarily true. A budget doesn’t mean no, it just means you need to start prioritizing your money.

Think of a budget as a pecking order for where your money goes. Whatever is left after the important nuggets get covered can go toward the less important “non-essential” wants.

Bad Habit #10: Ignoring Your Daily Habits

And just because you have a monthly budget, doesn’t mean you’re necessarily aware of all your day-to-day expenditures. If you want to quickly assess your weekly spending habits, run a 10-day budget.

Notice how many small things you didn’t realize you needed to budget for. You want to do this once a quarter for a few reasons.

First, it helps alleviate the paycheck effect, where you get paid and then spend your full paycheck two weeks later. Second, you’ll pay attention to daily fluctuations in your spending and be able to make adjustments as you go.

To a richer life,

Nilus Mattive

— Nilus Mattive
Editor, The Rich Life Roadmap

The post 10 Spending Habits That Can Leave You Broke appeared first on Daily Reckoning.

5 Things You’re Probably Spending Too Much On…

This post 5 Things You’re Probably Spending Too Much On… appeared first on Daily Reckoning.

When planning on how much to save for retirement, you first need to know how much you’ll spend.

The general rule is that you’ll need 70% to 80% of your pre-retirement income to maintain your standard of living.

However, a recent study found that nearly two in five (39%) retirees are spending more than they had expected.

With that in mind, there are at least five things you might spend more on once you retire.

#1—Travel

Many retirees love to travel, especially on the kind of trips they could only dream about while working.

Cruises are a favorite. In fact, the majority (38%) of cruisers are baby boomers and 47% of them plan on booking another cruise. Furthermore, the average age of those take cruises lasting 16 days or longer is 58.

And they’re big ticket items…

Fares advertised for less than $75 per person per day, say to the Caribbean, are enticing.

But it can run double or triple that amount depending on the cabin you book, your drinking preferences, the number of spa visits, how many shore excursions you take, and whether you are a big shopper at the gift store. Gambling can shoot your tab to the moon.

To keep the price of your cruise under control, realize that the mass-market lines with the lowest prices include buffet meals and entertainment… not much more. They’re also the ones who are notorious for pushing all the extras.

And don’t forget the cost of getting to and from the ship.

So before booking your cruise make a plan:

· Estimate how much the trip will cost.

· Calculate the amount you need to set aside each month so you won’t have to run up credit card debt to finance the trip.

· Stick with your cost estimate while on the trip. Don’t succumb to pressure to buy extras that were not in your budget.

#2—Healthcare

As we age, our health changes.

According to the Employee Benefit Research Institute, the average annual out-of-pocket health care cost for households ages 85 and above represents 19% of total household expenses. Between ages 65-74 it accounted for 11%. Preretirement it was 8%.

Some costs are predictable, others are not.

  • The predictable ones include:
  • Regular doctor visits
  • Dental cleaning and exams
  • Ongoing prescription medications
  • Eye glasses

Examples of those that can come out of nowhere and have a higher probability of occurring as you age:

  • Extensive dental procedures
  • Emergency room visits
  • Overnight hospital stays
  • In-home health care
  • Nursing home stays

And even if you’re on Medicare, there are a slew of items not covered, such as long-term care, most dental care, vision care, and hearing aids. Plus there are deductibles and copayments for doctors’ services and outpatient care.

So you need to have separate preparations for each.

Medicare Advantage and Medigap plans can fill some of those holes. There are also supplemental policies you can buy that cover dental, vision, and long-term care.

Another option is to sign up for a health savings account (HSA). To qualify, you must have a health insurance policy with a deductible of at least $1,350 for single coverage or $2,700 for family coverage. You can contribute up to $3,500 for a single or $7,000 for a family. Plus another $1,000 if you’re at least 55.

Moreover, the contributions are excluded from your taxable gross income. 

With an HSA you withdraw funds tax-free for medical, dental, and other out-of-pocket expenses at any age. However, you can’t make new contributions to the account after you enroll in Medicare.

#3—Recreation

With spare time on your hands and the possibility of health issues down the road, you may be inclined to become more physically active. And the fitness industry is quick to accommodate you with gym options aimed at retirees.

To spot a retiree-friendly gym see if they have:

  • Classes specifically for seniors
  • Equipment that’s easy for older folks to use
  • Personal trainers for seniors
  • Discounts for seniors. Many nationwide gyms partner with AARP or AAA to offer discounted plans for seniors.

If you have a Medicare Advantage or Supplement plan, you might also check to see if it covers enrollment at your local SilverSneakers gym.

A YMCA is another option. Many have an Active Older Adults program that includes senior fitness routines.

Or you can visit your community center. Classes are very affordable, and some are held in parks to get you out in the sun and fresh air.

#4—Utilities

Once you retire, you’ll likely spend more time at home. That means you’ll use your TV, air-conditioning, heating, and other energy hogs more, too.

Here are some quick and effective ways to trim those costs:

  • Limit the time you run your pool pump to six hours a day in the summer and four hours in the winter
  • Cool your home at 78 degrees or higher with the thermostat fan switched to auto. Bump it to 82 degrees or higher when you’re away.
  • Heat your home at 68 degrees or lower with the thermostat fan set on auto. And drop it to 65 or lower at night or when you’re away. 
  • Reduce your water heater temperature to 120 degrees and save about $2 per month. 
  • Clean or replace A/C filters regularly.
  • Turn off the ceiling fan when you leave a room. That could save you up to $7 a month.
  • Replace old, high-flow showerheads with water-efficient ones and save up to $80 per year.
  • Match the water level on your washing machine to the load size. Also use cold water when possible.
  • Clean the lint filter in your dryer before every load.

#5—Downsizing

The concept of going from a big home with loads of space you’re no longer using to a modestly-sized condo or house in an adult community sounds inviting.

But there are hidden costs…

First, making your home marketable.That means taking care of all that deferred maintenance you’ve put off for years. And to get it done in a timely fashion, it might be worth spending the money for professionals to tackle those tasks.

Second, up to 20% in capital gains tax.You can exclude up to $500,000 of profit when you sell your home if you’re married filing jointly. That drops to $250,000 if you’re single. 

Third, the actual move.Unless you want to rent a box truck and do the backbreaking lifting yourself, you should hire a moving company. Depending on the distance you’re moving and how much stuff you have, a full service moving company will charge $10,000 or more.

The priciest times are in the summer when kids are out of school. So try to time your move during the winter, and you might save a few bucks.

And use this opportunity to get rid of stuff you’ll never use [link to the article we wrote on death cleaning]. You’ll save money on moving fees and feel a sense of accomplishment.

Fourth, it could cost more to live at your new location.For instance, real estate taxes could jump, even if the value stays the same. Your current home is taxed based on its assessed value. Whereas your new home’s tax is based on the purchase price. So be sure to review taxes when considering downsizing.

There might be HOA or club membership fees that you don’t have now. Food, restaurants, and auto insurance could cost more.

To sum it up, chances are your spending will fluctuate throughout retirement. And how much you spend will have a big impact on how well you live during those years.

But if you recognize which expenses can increase and how to control them, you’ll be better prepared when they pop up.

To a richer life,

Nilus Mattive

— Nilus Mattive
Editor, The Rich Life Roadmap

The post 5 Things You’re Probably Spending Too Much On… appeared first on Daily Reckoning.

4 Steps to Break ANY Bad Habit

This post 4 Steps to Break ANY Bad Habit appeared first on Daily Reckoning.

When you’re in the checkout line, what goes through your mind?

Do you think about how much available credit you have on each of your cards, then choose the one with the smallest debt?

Do you think about the value of the product you’re about to buy versus the opportunity cost of using those dollars elsewhere?

Or do you simply pull out whatever card is closest in your wallet, and spend?

The choices we make each day may seem like well-thought out decisions, but they’re not.

They’re habits.

And if you’ve been noticing a downward trend in your bank account (or upward on your credit) lately, look no further than your daily routines.

In Charles Duhigg’s bestselling book The Power of Habit, he outlines the habit loop — how good and bad habits are made and broken.

While writing the book, Duhigg became hyper aware of some of his own habits, including buying chocolate chip cookies every weekday at the same time. This routine demonstrated how easy it is to slip into a routine of spending with no intentions.

Duhigg wrote about his experience and explained in detail how he broke free from this bad habit.

Today I’m going to share with you Duhigg’s secret to breaking bad spending habits.

To break any bad habit you must follow Duhigg’s four rules:

Rule One: You Must Identify Your Habits

To figure out how you spend, you have to identify your spending habits — the cues and routines and rewards — that drive how you handle money.

As an example, let’s say you have a bad habit, like I did when I started researching my book, The Power of Habit, of going to the cafeteria and buying a chocolate chip cookie every afternoon.

How do you start diagnosing and then changing this behavior?

By figuring out the habit loop. And the first step is to identify the routine. In this cookie scenario — as with most habits — the routine is the most obvious aspect: it’s the behavior you want to change.

My routine was that I got up from my desk every afternoon, walked to the cafeteria, and bought a chocolate chip cookie and ate it while chatting with friends. So that’s what I put into the loop.

Spending money on fast food is no different. You might drive by a fast food restaurant on your way home from work and start to feel hungry. Next thing you know you’re skipping cooking and heading for the drive thru.

To take control over these habits, you have to identify them. And to do that, you need to look for patterns in your spending. Download your credit card data and ask yourself:

  • When do you spend? Is it more often on weekdays or weekends? Mornings or afternoons?
  • Do you make a few big purchases or a lot of small ones?
  • Do you spend more when you are with your friends or alone?

It won’t take long to find some basic patterns — and those patterns will highlight the routines that shape your financial life.

Next, some less obvious questions: What’s the cue for this routine? Is it boredom? Genuine needs like food and rent? Do you spend to socialize or entertain yourself on your own? Do you crave the things you buy, or the shopping experience itself?

To diagnose my cookie habit, I had to ask myself some similar questions. Was I eating because I wanted the cookie itself? A temporary distraction? Or the burst of energy that comes from that blast of sugar?

To figure this out, you need to experiment.

Rule Two: Look for Rewards

Rewards are powerful because they satisfy cravings. But we’re often not conscious of the cravings that drive our behaviors.

To figure out which cravings are driving particular habits, it’s useful to experiment with different rewards.

If we’re trying to change a cookie habit, I would suggest that on the first day of your experiment, when you felt the urge to go to the cafeteria and buy a cookie, you should adjust your routine so it delivers a different reward.

Go outside, for instance, and walk around the block, and then go back to your desk without eating anything. The next day, go to the cafeteria and buy a donut, or a candy bar, and eat it at your desk. The next day, go to the cafeteria, buy an apple, and eat it while chatting with your friends. Then, try a cup of coffee.

The idea here is you need to experiment with different rewards to figure out what you’re actually craving. Your spending habits are the same way: when you would normally spend, experiment by doing something else.

For example, instead of buying an expensive drink at Starbucks, buy a bottle of water instead. The following day, go for a walk and don’t buy anything.

By experimenting with different rewards, you can isolate what you are actually craving, which is essential in redesigning the habit. In my case, when I went to a colleague’s desk to gossip for a few moments, I found the cookie urge disappeared. What I was really craving, I realized, wasn’t cookies, but socialization. That was my habit’s real reward.

Rule Three: Isolate the Cue

Experiments have shown that almost all habitual cues fit into one of five categories:

  • Location
  • Time
  • Emotional State
  • Other People
  • Immediately preceding action

So, if you’re trying to figure out the cue for the ‘going to the cafeteria and buying a chocolate chip cookie’ habit, you write down five things the moment the urge hits (these are my actual notes from when I was trying to diagnose my habit):

  • Where are you? (sitting at my desk)
  • What time is it? (3:36 pm)
  • What’s your emotional state? (bored)
  • Who else is around? (no one)
  • What action preceded the urge? (answered an email)

After just a few days, it was pretty clear which cue was triggering my cookie habit — I felt an urge to get a snack at a certain time of day. The habit, I had figured out, was triggered between 3:00 and 4:00.

The same logic can be applied to your spending habits. Write down your answers to the five questions to figure out your habit’s pattern.

Rule Four: Have a Plan

Once you’ve figured out your habit loop — you’ve identified the reward driving your behavior, the cue triggering it, and the routine itself — you can begin to shift the behavior.

You can change to a better routine by planning for the cue, and choosing a behavior that delivers the reward you are craving. What you need is a plan.

Your plan should look something like this according to Duhigg:

When I see CUE, I will do ROUTINE in order to get a REWARD.

The cookie habit plan looks like this:

At 3:30 every day, I will walk to a friend’s desk and talk for 10 minutes.

It didn’t work immediately. But, eventually, it got be automatic. Now, at about 3:30 everyday, I absentmindedly stand up, look around for someone to talk to, spend 10 minutes gossiping, and then go back to my desk. It occurs almost without me thinking about it. It has become a habit.

Your habits are automatic for good reason. If you had to think about every little thing you do before you do it, your brain would be exhausted.

But don’t let your brain’s natural shortcuts get taken advantage of.

Give yourself a spending habit audit and follow Duhigg’s four rules to break bad spending habits.

To a richer life,

Nilus Mattive

— Nilus Mattive
Editor, The Rich Life Roadmap

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Thinking About Retiring? Here’s How Much You’ll Really Need…

This post Thinking About Retiring? Here’s How Much You’ll Really Need… appeared first on Daily Reckoning.

One million dollars has long been the benchmark for how much retirees need to have saved for a comfortable retirement.

However, it appears a cool million doesn’t go too far these days. A new report by GoBankingRates, looked at how long a nest egg of $1 million would last in the U.S.

The study compared average expenses for people age 65 and older, including groceries, housing, utilities, transportation and health care.

Not surprisingly, the longevity of the $1 million nest egg really depends on where you live. The money stretched furthest in states like Arkansas, Mississippi and Tennessee, where retirees could live in leisure for at least 25 years.

But, in Hawaii, that same $1 million will only get you just shy of 12 years — mostly because of the higher cost of living and expensive real estate in the Aloha state. 

The study also points out the average person retires at age 63 and has a life expectancy of 85 years. So if you’re expected to spend 22 years in retirement, how much will you need to retire comfortably?

That’s the burning question everyone has. While there’s no exact formula to determine this magic number, there are some pretty good rules-of-thumb that’ll get you close.

Here are few questions to get you started:

1. How Much Will You Spend Once You’re Retired?

Step one is figure out how much you spend now. Build a budget and start tracking your expenses so you know exactly where your money goes each month.

There are a couple different schools of thought when it comes to calculating your retirement nest egg goal based on your burn rate. Some experts suggest you’ll need 70-80% of your pre-retirement income after you finish working.

Others say you’ll need at least 100% for the first 10 years into retirement. It’s a myth that spending slows down once you’re retired — if anything it goes up, at least in the first few years.

Another strategy is to have 10 times your final salary in savings if you want to retire by age 67. If you follow the 10x rule, here’s what that might look like for your savings over 30+ years:

  • By 30: Have the equivalent of your salary saved
  • By 40: Have three times your salary saved
  • By 50: Have six times your salary saved
  • By 60: Have eight times your salary saved
  • By 67: Have 10 times your salary saved

2. How Long Will You Live?

This is nearly impossible to predict so it’s sort of an unfair question. However, people are living longer now. A healthy, upper-middle-class couple who are 65 today have a 43 percent chance that one or both partners will live to see 95.

If your parents or grandparents lived well into their 80s and 90s, then chances are you’ll live that long too. But living longer comes at a cost.

The Bureau of Labor Statistics estimates that mean healthcare spending for seniors is close to $6,000 annually. And seniors are statistically more likely to experience major health emergencies.

It’s also worth noting that Medicare won’t shield you from high healthcare costs. In fact, you’ll need to pay Medicare premiums as well as coinsurance costs, which can be quite high.

Having a dedicated fund, ideally in a health savings account, to cover health care costs during retirement is a good idea.

3. Should You Follow the 4% Rule?

You’re probably familiar with the 4% rule, also known as the safe withdrawal rate. Which is basically the rate at which you can spend your money without running out because withdrawals primarily consist of interest and dividends. 

To figure out how big your portfolio needs to be, you divide your annual spending by 0.04 (or multiply it by 25).

For example, say your family spends $45,000 per year.

$45,000 x 25 = $1,125,000

You’ll need a $1.12 million nest egg to support yourself for at least 25 years.

If you’re wondering why 4% and not 2% or 10%? The four percent rule is calculated based the average rate of investment returns minus inflation. Historically, the stock market has returned an average 7% per year and on average inflation is about 3%.

7% – 3%  = 4%

So your net worth should increase by about four percent each year. If you spend that four percent, you should end the year with the same amount you started with and the cycle will continue.

The 4% rule is a solid rule of thumb. Since the early 1900s, it’s held true. However, experts are less optimistic about what future markets hold so there’s been a push for a more conservative 3% rule. But living off 3% is a lot less attractive so you’ll have to be the judge of what you can sustain.

The other option is to aggressively ramp up your savings. Savers can double, on average, their nest eggs in the last decade or so of their working lives, thanks to compound interest.

These are just a few ways to find your retirement target. Once you have a number in mind, there are three things you should do:

  1. Save as much of your income as you can. If your employer has a 401(k), the contribution limit for 2019 is $19,000 for workers under age 50. If you’re funding a Roth IRA or traditional IRA, the maximum yearly contribution is $6,000 for workers under age 50.
  2. Automate your savings. Have your employer deduct your savings from your checking account straight into your retirement account. You can’t spend what you don’t see.
  3. Increase your savings consistently. Either every six months or at the end of every year when you get a raise, you should be upping your savings. You can do this by setting up “auto-increase,” so you don’t forget.

If you follow these three steps, you’ll be in good shape to hitting your retirement number.

To a richer life,

Nilus Mattive

— Nilus Mattive
Editor, The Rich Life Roadmap

The post Thinking About Retiring? Here’s How Much You’ll Really Need… appeared first on Daily Reckoning.

6 Easy Ways to Control Spending

This post 6 Easy Ways to Control Spending appeared first on Daily Reckoning.

One of the downsides to saving large sums of cash is it starts to burn a hole in your pocket.

When I was a kid, my grandparents would occasionally give me a $10 bill after I’d go visit for a week. I had zero tolerance for saving back then, so I would spend it on candy and comic books almost immediately.

Since then, I’ve built up a pretty good tolerance against spending cash. I’ve seen too many financial struggles and missed opportunities to not have a decent stockpile of cash in my bank account.

As of late though, my tolerance against spending is being tested. With a looming bear market, hoarding cash doesn’t feel like a bad investment.

The problem is this extra money starts tempting you. And, the last thing you want to do is waste your hard saved cash on something frivolous.

So, what should you do?

Here are 6 “easy” tips to help you control spending. I say easy because none of these require any extra discipline or extravagant measures. All you’ll need is a calculator, a pen and pad of paper.

The fastest way to boost your savings is by not spending what you have. If you want to accumulate more money, you need to learn some tricks to keep your spending urge at a minimum. Here are some tips I like:

Tip 1: Calculate How Much in Gross Income Is Needed to Buy

How much does it cost to buy a $90,000 Porsche 911 Carrera? It takes about $136,000 in gross income at a 30% effective tax rate. At a 25% effective tax rate, it requires $2,700 in gross income to purchase the newest $1,799 Macbook Pro.

Whatever you’re thinking about buying, multiply it by 1.5x to find out how much it really costs before tax. Suddenly, what you want to buy doesn’t seem as affordable.

Tip 2: Calculate How Many Hours of Work It Takes to Buy

If you work a salaried job, then you likely don’t pay much attention to your hourly rate.

However, understanding how much labor is required to afford something is sometimes the best strategy to give yourself some pause.

For example, to buy a $9,000 second-hand Rolex Submariner will take about 450 hours driving for Uber at $20/hour after operating costs. If you drive for 40 hours per week, that’s almost 11.5 weeks worth of work to purchase one watch.

Tip 3: Save 50% of Your After Tax Income Every Year

This might sound challenging, but I promise it’s not. As long as you’re maxing out your 401k and saving a certain percentage of your after tax income before you spend, you can afford to do whatever you want with your money after that.

But one idea I like is to max out your 401k and then save 100% of every other paycheck. Since most employers pay out twice a month, you can easily save at least 50% of your after tax income every year by following this plan.

It’ll be painful for the first 6 months, but after that you’ll adjust your living standards and it becomes easy.

Tip 4: Compare Yourself to Other People

If you make more than $35K a year, you’re in the top 1% of global income earners. Appreciate what you have compared to the billions of other people who weren’t lucky enough to be born in a developed country.

According to the UN world food program, some 795 million people in the world do not have enough food to lead a healthy active life. Simply comparing your circumstances to those less fortunate is sometimes enough to curb those impulse buys.

Alternatively, you can try motivating yourself by comparing your wealth and career success to other people your age who are doing better than you. Depending on your personality type, this can be really motivating and force you to keep boosting your savings in order to catch up.

Tip 5: Establish a Spending Goal

There’s a rule I like which states that whatever you want to buy, you should try to make at least 10x that amount first. For instance, if you want to buy a $30,000 car, try making $300,000 first. This is a tough rule to stick to but it forces you to achieve certain financial goals tied to big rewards.

What you’ll find is after spending all this time earning and saving enough to reach your big goal, you might lose the desire to actually buy what you originally thought you wanted.

Make your spending goals challenging so when you reach them it’s worth the pain to make the purchase.

Tip 6: Visualize the Opportunity Cost of Your Purchase

If the S&P 500 averages 7% a year for the next 10 years, you’ll have doubled any money you invest today in the index. Therefore, the $9,000 watch or $30,000 car you buy today might be worth $18,000 and $60,000 respectively in the future. Visualizing opportunity cost is one way to prevent spending, but it’s hard because it’s difficult seeing that far into the future. One easy way to see the future is by running your finances through a retirement calculator. You’ll quickly see whether you’re on track to retirement or not.

Boosting savings is not rocket science. Yes, it requires some discipline but if you follow these simple tips on how to curb your spending, you’ll build a high tolerance and see your bank account grow.

To a richer life,

Nilus Mattive

— Nilus Mattive
Editor, The Rich Life Roadmap

The post 6 Easy Ways to Control Spending appeared first on Daily Reckoning.