3 Solutions To Reduce Your Money Stress

Image via WikipediaLife gives us an abundant amount of things to worry about. We worry about our kids, jobs, spouses, families, and just about everything else. According to the American Psychological Association, Americans number one worry is money. We think way to much about our debts, budgets, and especially our investments.

Stressing and worrying about your money causes you to make mistakes when you need to plan and supervise your finances. You need to find ways to reduce this worry.

1. Budget

The number 1 reason for money stress is you don't know how to handle your finances. You don't know how much money is coming in and also where it's all going. To fix this you first have to set up some structure of organization. It's no shame to be unorganized, most people are and it shows with their poor financial actions.

You need to set aside some time in a quiet place with all your bills, statements, check stubs, and pen & paper. At the top of the sheet write monthly budget. That's right we are going to make the dreaded budget for the month. At the top of the page list your total income for the month. Then list down the page all your expenses that you need to pay for the month. Don't forget to list expenses that you need to pay like once a year bills. List home insurance, property taxes, etc. Divide the bill by 12 and list the amount you need to save each month to meet the future payment.

Sit back and go through the list. You will see how much you make and where it is all going. Doing this process every month gives you a road map to ease any anxiety about your money. Any problems or issues will become apparent and then you will be able to address them. Worrying about your finances will cease to be a cause for concern.

2. Retirement  

Retirement is the number two cause of financial stress. When worrying about retirement do you picture yourself living in your children's garage surviving on cashing in aluminum cans. As we get older this worry seems to increase. Also when the stock market takes a nose dive and we see are portfolios drop by half the stress levels go through the roof.

Investing in general is a risky business at best. Appreciation of your portfolio is never guaranteed and if you like roller coasters you are a perfect candidate for the stock market. The first move to worrying less about retirement is having some money saved in the first place. That's why part of your budget has to include a monthly contribution to a 401k or IRA.

The other part of reducing the stress of retirement is having your investments diversified according to you risk tolerance. Having all your money in a narrow choice of investments only will lead to you losing money and causing worry. You need to find a balance between stocks and bonds. Also being very diversified in these to groups is important. With bonds you need long term, medium term, and short term. With stocks you need to diversify with international, small cap, large cap, etc. A great source for building a low stress, well diversified portfolio is financial advisor Paul Merriman. Check out his website at www.fundadvice.com.

3. Life

The last thing to do if you want to reduce stress is to take a break from your finances. After you set them up and become organized put them aside and live your life. Seek out new friends and experiences. Money isn't everything. Life is passing you by if you keep on the worrying track.

How To Save Money On Your Coffee Habit

Image via WikipediaAmericans love their coffee. According to Coffee-Stastics.com , the United States is the foremost coffee-drinking country in the world. Americans are responsible for drinking down over 400 million cups a day. Sometimes I think I'm to blame for at least half that.

Coffee lovers listen up: It may be time to re-evaluate your morning jolt. Time Moneyland recently reported that Starbucks is raising prices because of increased costs for fuel and coffee beans. A "tall" (Starbucks version of a small) order of numerous coffee drinks now costs 10 cents more than last year in many parts of the U.S., including Atlanta, Boston, Dallas, Washington D.C., and New York. Not a lot as a percentage but it can add up over a year. This news comes on top of price increases instituted in 2011 by many other coffee shops.

Is their a way to tone down your coffee habit while still getting your caffeine fix?

Let's take a look.

Stop Ordering Specialty Drinks.

Those with a latte addiction should read over at Yahoo Finance that a daily $4 latte adds up to roughly $28 a week, which is the equivalent of about $120 a month and $1,460 a year. Think of all the things you could do with that cash. Making the switch to a simple cup of brewed coffee can cut your spending by nearly half.

Order a Smaller Size.

Reduce your spending further by ordering a smaller serving size. You'll still get your caffeine fix but save roughly 50 to 75 cents a day, depending on prices at your local coffee shop.

Use Your Own Cup.

Many coffee shops, from large chains to local independents, are trying to save money and reduce costs. And cutting down on disposable cups is a good way to reduce waste. Starbucks , for one, encourages customers to use their own travel mug by offering a 10-cent discount -- an easy way to offset that 10-cent price hike.

Make Your Own.

Making coffee at home is an even better way to save money. Need proof? An analysis conducted by Daily Finance that pitted a $2.29 Starbucks "grande" (medium) regular coffee against the (approximate) 17-cent cost of brewing a cup at home found the annual savings amounted to $835.85. This doesn't take into account the newest method in home brewing -- the pod, which makes quick, convenient single-serving cups but raises the per cup cost by 40 to 50 cents. Still, that's cheaper than stopping by the coffee shop every morning, although the pods aren't particularly environmentally friendly.

If you're looking to start making your own cup o' Joe, you'll have to make an upfront investment in a coffee maker. Not to worry - the expense is recouped many times over in the first year alone.

Stop the Habit Altogether.

If you're really serious about saving, forget all these suggestions on how to cut coffee costs. The best way to curb spending is to quit coffee for good. Granted, it's not easy -- if it were, no frugal consumer would be stuck with a coffee habit. The best way to quit while minimizing or avoiding withdrawal symptoms is to wean yourself gradually. Sip from smaller cups each week or try going half regular and half decaf until you can go without entirely. Once you break the habit, you might try green, black, and red rooibos teas, which all offer the same richness as coffee with much less (or no) caffeine.

I won't be doing that.

Social Security May Fail Sooner Than We Think

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Every year the Social Security Trustees Report gives a status of the fiscal state of our Social Security system. Last year it was reported that the trust fund would likely run out of money in 2036. Dailyfinance.com says this years report offers a much worse picture at "Social Security Is Failing Even Faster Than We Thought"

The current report states by the end of the decade the trust fund would be $800 billion dollars smaller than last years projections. This adjustment means Social Security would run out of money in 2034, two years sooner.

The table shows the difference between the SSA projections and this years Congressional Budgets Office projection.

The chart shows the trend over the last 5 years:

When the Trust Fund runs out of cash in 22 years, benefit payments are expected to decline. At that point it is assumed by many experts we will see a reduction of the average Social Security check to 75% of its original amount.

What to do about a reduction in Social Security?

It all depends on your age and how far away you are from receiving your 1st check. You still have 22 years to prepare for this event. It's time to start saving if you haven't already or increase saving to accumulate a bigger nest egg. 

We are receiving more and more data concerning the inevitable demise of Social Security.  The press and others have been saying the sky is falling for many years. But now the problem is really just around the corner and will be here soon for those in their 40's and 50's. They will be the first to experience the reduction in payments by Social Security Trust fund, yet there is still time to prepare.

Essential Tips to Saving for Retirement

retirement (Photo credit: 401K)The severe economic downturn of 2008 saw millions of hard-working people lose their jobs and unfortunately much of their 401K savings. The effects of the unexpected crash have changed the way people live in the present and plan for their future. Here are some tips for seniors thinking about retirement on how to prepare:

Make realistic goals and stick to them

It is important that you set very attainable, tangible goals about your financial future. Think long and hard about what you want your senior retirement to look like. What are your needs going to be? What do you want to be able to do? Where do you want to live? After you’ve figured out the answer to these questions make a structured month by month plan about how you will save the money that you need to make your goal possible. Talk to a professional about mutual funds, savings accounts, IRAs and other instruments that you can use to safely invest your money.

Join your employer’s retirement plan

Many employers offer a retirement plan for employees that allow you to start a 401k plan. Take advantage of it! Not only will it lower your taxes and increase your deductions, your employer might even contribute money to it. This allows you to save for retirement in a very organized and comfortable fashion. You can even choose to invest the funds for your 401k to maximize your savings. Even if your employer does not offer any 401k plan, don’t be afraid to ask them if they would be willing to do so. While this may seem unnecessary during working years, you will be happy that you did it when you start thinking about calling it quits.

Have Discipline 

Once you have decided what your retirement goals are and have made efforts to prepare for it via a 401k plan, IRA, as well as other kinds of investment instruments, it is important that you have discipline. This means not digging into your retirement account, especially if you can manage without doing so. It means staying committed to your goal by consistently putting money away. It also means asking the proper questions and making sure at every turn that you have your investments under control. Far too often people start thinking about retirement, but lack the proper attitude to follow through.

Make sure that you stay the course and don’t give up. Your future depends on it.

Colleges Cutting Tuition to Attract More Students

Image via WikipediaI never thought I would see the day when a college would reduce its tuition. Colleges wanting to attract more students are lowering their tuition costs to make it more affordable. This is a new trend to lower costs which will help middle-income families who make to much to receive grants but to little to afford tuition. According to a Smartmoney.com article, Edwin Welch, president of University of Charleston, in West Virginia says "We are hoping to recruit more students from that group (middle income) than in the past".

The colleges are giving discounts to be more affordable but their costs may still be higher than public colleges. The average annual cost of tuition and fees at a four-year public college for in-state students this year is $8,244, according to the College Board. Of the private colleges cutting tuition, Seton Hall University in South Orange, N.J., will offer the lowest tuition (roughly $10,000) for incoming freshmen with high grades.

The current situation comes at a time when FASFA grants are starting to be cut. The cost cutting by government is a result of future federal budget cuts that will have to be put on the backs of college students receiving grants. Add to that the dismal performence of college saving vehicles like 529 plans are the situation worse. Something will have to give and the only other place to cut is tuition costs at your local college and university.

Here are the colleges providing tuition discounts.


Cabrini College

• tuition cut: 12.5%
• tuition and fees in 2012-13: $29,000 (down from $33,176 this year)
• located near Philadelphia
• room and board - $11,742 

Lincoln College

• tuition cut: 24%
• tuition and fees in 2012-13: $17,480 (down from $23,000 this year)
• the cost of tuition, fees, room and board is $29,000 this year
• room and board is $7,000. 
• located in Lincoln, Ill.

University of Charleston

• tuition cut: 22%
• tuition and fees in 2012-13: $20,700 (down from $26,200)
• the university decided to reduce tuition by 22% for new students and give at least $6,000 in free aid to all returning ones. 
• room and board, which averages $9,000 a year, will likely increase by 1% to 2%.

William Peace University

• Tuition cut: 7.7%
• Tuition and fees in 2012-13: $23,900 (down from $25,900)
• located in Raleigh, N.C.
• cost of dorms is $6,186 and food costs will rise to $2,814.

Duquesne University

• Tuition and fees cut: 50% in the form of a grant for freshmen who enroll in its School of Education
• located in Pittsburgh, Pa. 
• Tuition and fees in 2012-13: $14,355 (down from $28,671
• Room and board will rise next year by 3% to 4% from its current level of roughly $9,800.

Seton Hall University

• Tuition and fees cut: roughly $21,000 for incoming high achieving freshmen
• Tuition and fees in 2012-13: $10,104 (down from roughly $31,000)
• located in South Orange, N.J.
• Room and board, which costs about $11,000 a year, will rise between 1% and 5%

The days of ever increasing costs for college tuition are coming to an end. The free money coming from government programs is beginning to taper off. Colleges will have to be more competitive with their prices to vie for less tuition dollars.

Tax Filing Status Is Not Set In Stone

Tax Preparation (Photo credit: agrilifetoday)

This tax season many people will be changing their tax filing status from single to married. It's all so exciting for the newlyweds new life together. To make it more interesting you and your spouse can now file joint tax returns.

Your filing status is an important part of your tax return because if used incorrectly you could be paying to much in taxes. Many people do not realize that you don't have to continue to use the one filing status, you can change it depending on the tax implications.

“Newlyweds and married taxpayers can choose to file jointly or separately based on their individual situation, but keep in mind that this filing status can change each year,” said Mark Steber, chief tax officer, Jackson Hewitt Tax Service Inc. “Generally, using the ‘married filing jointly’ status provides the lowest tax liability and the highest standard deduction. However, if one of the filers has large deductions or expenses, the ‘married filing separately’ status may be more beneficial.”

Some rules you need to keep in mind.

• The Internal Revenue Service recognizes a couple’s marital status on the last day of the year. Even couples who wed right before midnight on December 31 are considered legally married for the full 2011 tax year;
• Couples should note that certain credits, including the Child and Dependent Care Credit, the Earned Income Tax Credit and certain education credits, are not available under the “married filing separately” status; and,
• Tying the knot often results in a new last name. Names listed in your tax return should match all forms of identification, including social security card, passport, driver’s license and documents from employers, loan holders and investment accounts.

Make sure you seek out professional tax advice when choosing a tax filing status. The money you spend on this counsel will benefit you with only paying the minimum tax owed.