There has been a lot of talk recently about the financial state of 30-somethings. Apparently the future does not look very bright for those of us caught at the tail end of Generation X and the beginning of Generation Y.
The amount of financial responsibilities facing this age group can seem daunting. Raising a family is expensive enough without having to worry about setting up an emergency fund, paying down the mortgage, putting away money for retirement, saving for your child’s education and everything else that comes along with improving your financial situation.
So how do you balance your savings and investments with the everyday costs of raising a growing family? You can start by setting up a simple plan for each of these categories to ensure that you are on the right financial path.
Streamline Your Mortgage
Many 30-somethings entered the housing market during the peak of the housing boom with long amortization periods and little –to-no down payments. Luckily there are two quick fixes you can make to your mortgage immediately to pay off your balance faster and save on interest.
The first is to switch your payments from monthly to bi-weekly. On a $300,000 mortgage at 5% interest amortized over 30 years, switching to bi-weekly payments would only cost you $133 more each month and would save thousands of dollars and over 5 years off the life of the mortgage.
The second way to help streamline your mortgage for the future is to switch to a variable interest rate, but maintain your payments at the fixed interest rate. Using this technique while interest rates remain low will further reduce the principal on your mortgage while still giving you a cushion for when interest rates start to rise again.
Utilize Your TFSA for Short Term Savings
The Tax Free Savings Account allows you to contribute up to $5,000 per year and withdraw that money anytime without paying any taxes on your gains. This is a perfect savings vehicle for someone in their 30’s who has many short term savings goals.
As a couple, make it a priority to contribute and fully fund at least one of your TFSA accounts each year. Create a list of short term goals that need to be looked after in the next 1 – 3 years and use this money to pay for these items in cash.
Your list might include anything from buying a new car to doing some minor renovations or repairs in the house, taking a family vacation or upgrading your furniture. You don’t want to go into debt for something you could have easily planned for a year or two in advance.
Contributing to an RESP
An RESP (Registered Education Savings Plan) is a great way to start saving for your child’s education. The mistake a lot of 30-somethings make is to try and maximize their RESP contributions before they even have their own finances under control.
After your child is born, make sure you get the account open and take advantage of the initial grant money, but then just contribute what you can afford in the beginning. If you are eligible for the Child Tax Benefit you can start an RESP with the Canada Learning Bond of $500 to begin with and contribute $100 a year until your child turns 15 years of age, without even putting a penny of your own money towards it.
Once you are comfortable increasing contributions to your child’s RESP you can maximize the account by contributing $2,500 per year, which will get you the maximum annual CESG of $500 in free money from the government.
Saving for Retirement
Retirement savings is the most common thing put on hold by most 30-somethings until they have a firm grip on everything else that comes with raising a family. There is still plenty of time to focus on saving for retirement once the rest of your finances are in order.
Setting up an RRSP is simple and with a low cost index fund like TD E-Series you can contribute as little as $25 per month towards your retirement account. Again start small with what you can afford and then slowly increase the amount until you are contributing about 10% of your income.
One thing to take full advantage of is an employer matching program. Some employers will match your RRSP contribution dollar-for dollar up to a certain percentage of your salary. Calculate that amount and make sure you are contributing at least that much in order to receive the full amount from your employer. You can’t beat 100% returns on your investment.
Light at the End of the Tunnel
There are so many financial pressures facing 30-somethings today that it’s no wonder the so-called experts doubt what the future holds for this generation. We can’t possibly maximize every savings vehicle and make extra mortgage payments without sacrificing the joy of creating memorable experiences and spending quality time with our families.
The key is to strike a balance in your 30’s where each aspect of your finances can be set-up for continuous improvement, all while taking care of everything that comes with raising a young family. It’s not an easy task, but if done properly you can help dispel the rumours of our doomed financial future.
John Garcia April - 26 - 2011
Children need to understand from a very young age, that college doesn’t come cheap. In order to start saving enough for a college fund to comfortably enter college later, one needs to take certain measures.to ensure that they finish college without student loan debt. Parents, too, need to have a guiding hand in their kid’s lives, so that both parties can be able to skip the worry and the anxiety that will certainly come once your teenager is ready to enter college. We have gathered some tips that we are confident that any kid wanting to go to college can use, regardless if this child is well-off or middle-class. Parents and children should take a look at these tips together, as to best to figure out the best tip to start out with.
1. Start early. If you
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Gerald Conrad April - 25 - 2011
An investment strategist for exchange traded fund manager iShares recommends investors keep an eye on Brazil ETFs and regional banks.
Some analysts like valuations in regional banks and the potential for takeovers by larger rivals. There are plenty of regional bank ETFs to help investors gain well-rounded exposure to this area of the market.
Russ Koesterich, iShares Global Chief Investment Strategist, reports that regional banks are cheap, and the current valuation is a 15% discount to the broader financial sector and a 55% discount to the overall market. Compared to past performance, other financials and the broad market, the shares are presenting an opportunity.
Various Regional Bank ETFs:
For the long term, Brazil is on many investors’ radar. B
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Marie Conklin April - 25 - 2011
The recent drop in the unemployment rate is a reason to celebrate, but the job market is still tougher than it’s been in years. This likely means a lengthy – and possibly expensive – job search at a time when you can ill afford to be bleeding more money from your bank account. Thankfully, there are lots of ways you can get free job search help – some obvious, others not:
The Local Library
Besides free Internet to search job sites and submit applications, many libraries also have classes, clubs and workshops where you can network, learn new skills and get tips to help you land the job you want.
Your Alma Mater
Are you a college graduate? Well, many universities offer free lifetime career services for graduates. These c
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Gerald Conrad April - 24 - 2011
Are you into online finance these days, and if not, why not? Internet technology has brought financial services into our own homes, and it really is as easy as A, B, C. There’s general internet banking, including the options for wiring money from home using either the banks or other financial services specifically set up for online use.
Not only does the virtual world allow us to apply for loans, make payments, and transfer money etc, but we can literally shop for anything at any time, then simply wait for the goods or services to be delivered to our front door, or email’s inbox.
Shopping, banking, studying, researching, matchmaking, and so the list goes on. If it can be done in the real world, it can be done in the virtual world too. Isn’t technology a wonderful tool?
Marie Conklin April - 22 - 2011
It has been a rollercoaster ride in the jobs and housing markets for the past few years. The good news is that both are heading in a positive direction, according to numerous experts. This means the rollercoaster ride may finallye to a stop and we can get off. To find out where were heading in the near and more distance future, lets take a look at some of the predictions regarding jobs and homes:
Careers and Jobs Outlook
With millions of Americans still out of work, it is no secret that we continue to sit in the middle of an employment crisis. And the crisis is not likely to go awaypletely as 2011 unfolds, according to economist, author and advisor to the White House Council of Economic Advisors, Diane Swonk. Swonk estimates, however, that the crisis will diminish by 2013, returning many of the millions who are currently unemployed back to work.
With the extension of the Bush tax cuts, there alsoes a ray of hope.
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John Garcia April - 21 - 2011
The biggest cause of debt is not knowing how to manage your money. If you spend more money than you earn, you accrue debt. Student loans, credit cards, car loans, mortgages, and payday loans are all forms of debt. Some are less problematic, but none are good to have. However, getting rid of consumer debt first is most important. If you can manage your money properly, you can avoid going into debt, and you can get rid of the debt you already have.
Track Your Spending
The more debt you have, the more you should put aside each month toward payments. Tracking your spending will show you where your money is going. What unnecessary spending is there? Are you wasting money?
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John Garcia April - 21 - 2011
Hotels are trying to curb the number of items that get packed into people’s suitcases. And some high-end locations have resorted to washable microchips to keep track of towels, bathrobes and bed linens.
Florida-based Linen Technology Tracking has patented one such washable tracking device. The company has clients in Honolulu, Miami and New York that are using their product to track linens in real time. In an interview with the New York Times, Linen Technology Tracking declined to name those hotels. The Honolulu hotel, which introduced the technology last summer, reportedly saved more than $16,000 a month by reducing the number of stolen pool towels from a whopping 4,000 down to 750 a month.
The radio frequency ID tags also let hotel managers know when they are running low on supplies like bed linens, bathrobes and towels.
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