Setting up an emergency fund

As we moved through life, many of us set up or thought about setting up an emergency fund to look after any serious financial setbacks that might occur. As Boomers, we went through a number of recessions, high interest and other obstacles, and as we retire we still have to be cautious of our spending and savings.

I think that most of us at one time or another has been hit with a serious money crisis and we find yourself scrambling around for emergency money. Here are some ideas on how to assess your situation and get back on your feet.

If you have a money problem or a financial setback you can be sure that there may also be a crippling emotional setback. Whenever a money emergency hits, it will be your ability to deal with the individual pitfalls that will be useful. We know that stress will tend to accumulate and make your life much more difficult to cope.  

Being Calm is the First Key to Managing a Money Emergency. You will not be so overwhelmed when you can calmly and rationally look at each individual problem as it arises. Staying calm must take center stage. You must NEVER allow yourself the luxury of panic. There is no one there for you to just take over. You are all you have.

The more you panic, the less effective you will be. You need to keep a very clear head to be able to sit down and come up with an appropriate plan. It is only when you are at your most calm that you will be prepared to get to where you need to be and then overcome.

At even the first hint of a money emergency, it’s important not to act right away. If you do you will inevitably make a mistake! First, before you can manage your finances again, you have to first manage your emotions. You absolutely must regain your balance before you can even begin to plan.

If your money emergency demands that you act quickly, think first about seeking the advice of a debt counsellor, money coach or financial planner. Whenever possible think about seeking out the aid of a financially perceptive friend or family member who can help you to come to a clearer perspective.

Remember the old adage that “two heads are always better than just one!” You won’t need to make a major cash investment if you’re strapped. Look for a planner who will give you a one-hour consultation for $150. Often times this will be all you will need to securely turn the corner.

Before an emergency hits here are some everyday ways to save and set up an emergency fund. Some ways will require some sacrifice, while others will require little before thinking. The point is to be forever mindful of saving those pennies and before you know it, you will have saved up a tidy sum.

·       Spend less money than you earn each week.

·       Seek out a higher paying job.

·       Keep your job skills sharp and up-to-date so that when a new opportunity comes up, you will be on your toes and first in line.

·       If you must use credit cards/cut up those you can do without.

·       If you must use credit cards, pay them all down in full each month.

·       If you have credit card debt at high rates, consolidate at once.

·       Lower your expenses, one by one.

·       Forego purchasing non-essential items.

·       Find cheaper insurance rates/then switch over.

·       Use coupons to shop with.  Don’t purchase without a discount coupon.

·       Wait for things to first go on sale before buying. Take advantage of catalogue saving certificates.

·       Don’t buy an item just because it is on sale.

·       Buy generic or non-name brand merchandise as much as possible.

·       Wait for prices to fall to a discounted rate before buying (applies especially to electronics items).

·       If you do eat out, buy gift certificates for half price meals.

·       Do more stay in activities at home.

·       Invest the money you save to earn even more.

·       Create a plan to save $200 each month (or as much as you can manage.)  Never miss the monthly savings payment to yourself and try to find ways to increase it.

·       Don’t spend money just because you have it.

·       Find an interesting hobby to occupy your time and stop you from spending money.

·       Find a hobby that you can turn into earnings.

·       Go on a sensible diet and lose weight. You will save money on food, look and feel better, and your long-term health care costs should fall dramatically.

·       Learn how to manage your finances by reading financial publications.

·       Increase the amount of money you earn through a second job, promotion, new job, investments, etc.

·       Paying down your debt is also a way to save money (it saves you from a debt payment and brings you closer to having money to invest).

·       Switch to lower your telephone bill.

·       Lower your cable bill by deleting pay channels or switch to a streaming service.

·       Be patient when bargain shopping.

·       Start saving money today! Don’t give up -- put just $10 aside, today!

Senoir Discounts

Tis the season for the giving of gifts, and I like many of you am on a budget, so I take advantage of any discounts I can get, and I use or try to use senior discounts. I remember a few decades back, and I was going in to get my driver's licence renewed and I was asked by the clerk what my hair color was and I said brown with a touch of grey. She laughed and put down grey. I was 36 at the time. 

I soon realised that with my grey hair, I was being offered senior discounts for various activities I went on, shopping, movies, etc. I was amused, and then a bit upset and then I gradually came to realise that I should and could take advantage of these while they last.

If I am not offered a senior discount, I now ask if the store has one and usually, they do. However, the time of the senior discount is fast coming to an end. There are just too many of us Boomers, Sonic or otherwise out there. 

A few years ago, there were not as many seniors and giving a discount was seen as a way of giving back to the few who survived to an older age. But with the Boomers reaching the senior discount age, stores and other facilities, that offer discounts are rethinking their position and many authors such as Ann Brenoff, writing at Huffington Post earlier this year, stated

”Seniors aren’t the poorest among us anymore. The national poverty rate, according to the 2014 Census, is 14.8 percent. For seniors 65 and older, it’s just 8.7 percent, while for children under 18 it was 21.1 percent. Maybe it’s children we should be offering discounts to?

As more of us age, you will start to see the off season for holiday resorts become shorter, Boomers who have retired can travel when we want and are no longer restricted to peak season. One of the joys of being a Boomer who is at the head of the curve is that I and my friends can and do take advantage of discounts offered and off seasons where prices are cheaper and there are fewer fellow tourists around. But my fear is that these perks of retirement will no longer be around for the younger boomers and the younger generations.

Household spending

According to Statistics Canada Survey of Household Spending in 2009 average household spending in Canada declined by 0.3% to $71,120, following the economic slowdown that began in the fall of 2008, personal taxes accounted for 20% of the average household’s budget in 2009, while food, shelter and clothing represented 34%, and transportation 14%.

The chart below represents how the average Canadian spends their money. I see savings for pension combined with personal insurance payments, but the percentage of each is not clear. Savings are difficult when all of your money is committed to spending to live.

No wonder OAS is important to the well being of older Canadians and will continue to be an important part of the planning people use when thinking about how they will live when they retire.

Baby boomers fret about the rising cost of aging

Posted by Jennifer C. Kerr, Associated Press at http://www.philly.com/philly/news/nation_world/126466793.html

WASHINGTON - The "golden years" may lose some luster for many baby boomers worried about the financial pressures that come with age. Many of the nation's 77 million boomers are worried about being able to pay their medical bills as they get older, a new poll finds. The concern is so deep that it outpaces worries about facing a major illness or disease, dying, or losing the ability to do favorite activities.
Another major concern among the boomers: losing their financial independence.
The struggling economy, longer life expectancy, increasing health-care costs, and challenges facing Social Security are putting added pressure on boomers, those born between 1946 and 1964.
According to the Associated Press-LifeGoesStrong.com poll, 43 percent of boomers who responded said they were "very" or "extremely" worried about being able to pay for their medical costs, including long-term care. Almost the same number, 41 percent, said losing their financial independence was a big concern.
"I always say I am going to work until I'm in the ground," said Ellie Krall of Manalapan, N.J., one of the boomers polled. "I don't see myself being able to fully retire like people were able to do years ago."
Krall, 50, manager of an orthopedic office and mother of an 18-year-old son in college, said she's worried about paying for health-care costs down the road and isn't banking on Social Security.
The oldest boomers turn 65 this year, but it's the younger ones like Krall who might be feeling more apprehension.
"Boomers are not all created equal," says Olivia Mitchell, a professor at the Wharton School of the University of Pennsylvania and executive director of the Pension Research Council.
Many older boomers still have a defined-benefit pension plan, probably some decent retiree medical insurance, and Social Security, said Mitchell, a boomer who has studied pensions and retirement extensively.
"The youngest boomers - the people who were born in the '60s - face more uncertainty about their pensions, their Social Security, their housing, and their medical care," Mitchell said.
Her advice: "Push your retirement back two or three or five years if you can. As long as you are still working, then you're not drawing down on your nest egg," Mitchell said in an AP interview.
The AP-LifeGoesStrong.com poll was conducted June 3-12 by Knowledge Networks of Palo Alto, Calif., and involved online interviews with 1,416 adults, including 1,078 baby boomers. The margin of sampling error for results from the full sample was plus or minus 4.4 percentage points; for the boomers, it was plus or minus 3.3 percentage points.