saving money

Top 5 Ways to Save for the Future (Despite the Recession)

Thinking about your distant financial future can be difficult when you’re struggling just to make ends meet right now.  With the global economy mired in a long-term recession, unemployment levels plateauing, and people everywhere trying to stay afloat in the stormy sea of government bailouts, corporate disillusionment, and a housing market that has tanked, now does not seem like an opportune moment to start planning for your retirement.  And yet, the earlier you start, the more you stand to set aside for your twilight years.  Not only will you be putting more funding into your future, but you will also be earning more by the time you draw your final paycheck and exit the working world.  So even if you can only contribute a few bucks here and there, you can find ways to invest in yourself.  Here are the top five methods of saving for retirement.

How to Save Money in a Recession

Savings Plan
Savings Plan

1.       Set a budget, cut debt, start saving. The reason so many of us fall behind is that we’re spending more than we’re earning (making saving impossible).  Take the time to balance out your finances so that you can start paying down your debt, and then you can begin to save in earnest.  As a bonus, you’ll also be improving your credit score along the way, meaning you’ll have the ability to buy a house or start a business later on.

2.       401K. There is absolutely no better solution for your future financial needs than a 401K.  Most businesses offer you the opportunity to contribute pre-taxable income to a retirement account, and whatever percentage you elect to donate will automatically be withdrawn from your check.  You won’t even notice it’s gone!  Plus, companies that offer matching programs will equal your contribution to the account, generally up to about 5% of your earnings (but you have to put the money in first).

3.       Stocks and bonds. These can be a bit more risky than other types of investment, but they offer the best chance to grow your money.  And as long as you hold a diverse portfolio, you won’t lose your shirt just because one area hits a wall.

4.       Invest in a home. These days it may seem like investing in property is a useless endeavor.  If you’re looking to buy and sell quickly, you’re probably right.  But if you plan to hold onto a house for several years, you have time to make upgrades the smart way, increase the value of your property, and wait for the right time to sell for a sizeable profit.

5.       Keep working. Who says there is a time limit on viability in the job market?  Frankly, if you’re looking for a paying position at the age of 65, you’re bound to have a pretty hard time finding it.  But there’s no law that says you have to give up employment just because you hit a certain age.  By continuing to work (with all the opportunities available on the internet and no way for employers to know your age, you level the playing field) you can continue to add to your accounts, or start new ones, instead of simply siphoning off your retirement funds.


Consolidating Bank and Investment Accounts

There are so many aspects to managing your personal finances that it can sometimes be a challenge keeping everything together.  In order to realize financial security in your life you must be able to juggle several tasks simultaneously.  You will have to know how to make money, save money, invest money and pay bills on a regular basis to ensure all of your financial goals can be reached.  With so many balls in the air at the same time, many people find it beneficial to consolidate their accounts to keep all of their finances in order.  Here we look at how you can consolidate your financial accounts and the benefits that can be realized by doing so.

Benefits of consolidating financial accounts

Consolidating bank accounts

It is not uncommon for individuals to have several accounts at different banks.  This could be due to several factors.  For example, you might use a bank with a convenient location for day-to-day transactions, or you might use an online savings account for lower fees and higher interest rates.  The problem with having your money spread all around is the difficulty in keeping track of your finances.  Managing multiple accounts increases the likelihood of making mistakes or noticing errors that could end up costing you more money in the long run.

By consolidating your bank accounts into one bank you can often save money across the board with reduced fees or other rewards such as favorable terms and interest rates as a result of having multiple accounts with one bank.  When you keep all of your accounts in one place you can receive consolidated statements which make it easier to see all of your finances in one easy place as well as providing convenient documentation that may be needed for tax season.

Consolidating investment accounts

When you have your investments spread out and managed by different brokerage firms or mutual fund companies, it is often difficult to know exactly what is going on with your money.  Consolidating investment accounts with one firm can offer the following benefits.

  • Keep track of investments. When all of your accounts are managed and located at the same place it is more convenient to track your assets. You can see in one place how your investments are performing.
  • Keep track of changes. Fees, commissions and policies are subject to change with each company.  These changes can be hard to follow if you have your accounts spread out, however by having your accounts in one place you can easily keep track of changes that can impact your money.
  • Special perks. The bigger your account, the bigger the perks you may receive. Some companies will reward bigger account holders with free services or reduced fees and commissions.

Making an informed decision.

There are many benefits associated with consolidated financial accounts, however this step may not be right for everyone.  It is important to consider both the advantages and disadvantages of any moves you make in regards to your personal finances.  What works for one situation may not work for another making it all the more important to make an informed decision.