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Monday, June 13, 2011

The New Normal

MarketWatch has a story on the Employee Benefit Research Institute’s latest study that suggests that the current, standard age of retirement is going the way to of the dodo bird.  We had to see this coming.  With the average life expectancy of both men and women increasing over the years, men current at 76 years old and women at 81 years old, living on a combination of government assistance that’s dwindling and personal savings that getting harder and harder to accumulate, it’s no wonder.  What is a Money Conscience person supposed to do?
There are several weapons in our arsenal, but they revolve around two factors: saving more and spending less.  Yuck!  That doesn’t sound fun.  Do not fret.  It’s not as bad as it sounds. 
First and foremost, set your savings aside before you budget any of your spending for the month, pay period, week or whatever regular interval you budget your money.  This is most ideally done by your employer portioning a set amount of money to be put into your retirement savings plan.  This way you don’t see and can’t get to it. 
Next, cut back on dining out and cook at home, whether with friends or family.  Stop spending $50 to go to the movies, but rather stream a movie from Netflix at home.  Netflix’s streaming plan is $8 a month now and there are thousands of movies from which to choose.  Go to the grocery store with a grocery list and a menu already created for the week and stick to it.  This helps make sure you don’t waste food and make rash purchases that you and your family don’t really need.  This summer, plan a staycation.  There are numerous websites that highlight free or relatively cheap events in your local area.  Take advantage of this.  Drive strategically.  This mean car pooling when we can, mapping out our routes when running errands so we don’t back track or so we’re not running out for only one reason.  Finally, consider the “Not So Expensive” (NSE).  These are the non-name brand items that are just as good as name brand, they’re the Yellow Tails of the world. 
With any money we have left over from practicing some, all or more of these money saving ideas, set aside in a Roth IRA, increase your company sponsored retirement plan savings or set aside in a brokerage account.  In all accounts, invest wisely, considering your time horizon, risk tolerance and your short and long-term financial goals. 

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