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The Top Wealth Tip For Retirement Planning Happens To Be A Health Tip
Hiking in windy Wyoming.

If you want to enjoy the wealth you’ve built up over the years, focus on your health. Because if you think about it, health is wealth.

Get healthy now and into retirement.

Last month, while writing a retirement preparedness article for Forbes.com , I came across research from 2022, on the benefits of exercise. The American Heart Association researchers analyzed 100,000 people over a 30-year period and found that regular moderate exercise was associated with 20 – 21% lower mortality from all causes. Exercise periods were defined as 150 – 300 minutes per week. In addition, people with vigorous activity had 19% lower mortality.

While I read a lot of studies, something hit home with this one: lower death rates for all causes with moderate exercise five days a week. Since both my mother and maternal grandmother passed away from cancer at age 71, I am all about preventing disease. Of course, we all want to live a long and healthy life so this study may be helpful.

Let’s break this down:
- 30 minutes a day, five days a week = 150 hours a week
- 60 minutes a day, five days a week = 300 hours per week
This long-term study showed people who:
- walk
- take a brisk stroll with their dog,
- do calisthenics
- yoga/Pilates
- lift weights
- step it up a notch and jog
- jump rope
- run
- ski
- bike
had 19 – 21% lower rates of death than people who didn’t. That’s a wake-up call. This means goodbye to excuses I give myself when I say I am too busy to walk around the block.

Moderate exercise makes a difference.

While we probably all know that exercise is good for us, I just didn’t realize my morning routine of yoga/Pilates, stretches, and push-ups made such a difference. These exercises are classified as moderate along with walking around the block. As we’d imagine, jogging or skiing count as vigorous.

I think I can walk around the block, ride the Peloton, or jump rope at least 5 days a week. Can you?

Health is tied closely to wealth. Let’s focus on optimizing both.
November 3, 2024
Want To Raise Money Smart Kids? Teach Them These 5 Lessons
Teach your kids money lessons early, so they can grow up to be successful independent adults.

Financial independence is a huge part of a successful life.

Your kids need to know how to save, spend and invest money for the future.

Our most important lessons are gained through experience so here are some lessons and hands-on activities to do with them:

1. Money lesson – How to negotiate

The lessons to learn:

Price reduction – find the seller’s true price range, not their starting bid. What is the lowest price they will take for their goods and services?

They also want to learn to get the highest price when they are selling or negotiating a salary.

Bundling – when you pay full price or are buying more than one item, ask for additional services or “add ons” to increase the value of your purchase.

Walking away – teach your kids that even though they may have sunk time and energy into a negotiation, (aka sunk costs) they can still walk away from the deal.

Some activities to teach these skills:

Show and explain – have them watch you and discuss afterward. For example, your child can watch you at a Farmer’s Market. You buy a variety of fruits and vegetables at one stand and ask for an “add-on.” You may say something like, “Would you throw in a bunch of mint?” as you point to all the things you are buying.

Discuss the transaction in the car on the way home and explain “bundling.” Make a salad with watermelon and mint to enjoy your success!

Now it’s their turn to try it. My suggestion is to start someplace the stakes are really low such as a Yardsale or flea market and with an item or items where they aren’t emotionally connected. Sellers want to move merchandise at Yard sales!

Practice all these skills – price reduction, bundling and walking away. “Will you take $1 for these?” They can practice respectfully walking away, too.

Sell items (with your close supervision) on Facebook Yardsale or another service. In Utah, many people use KSL want ads. Teach your kids to start a higher price and see if they simply get it! Know their bottom line selling price going in and negotiate with the buyers. Allow people (your buyers) to bundle if appropriate.

2. Deferred Gratification – Waiting is a powerful financial skill

The lesson to learn – saving for the short and long term as well as making smart spending choices.

Teach your children to save up and then spend wisely on what is important to them. To do this, use their weekly allowance. (*Note – I believe in allowance tied to chores. If they don’t do their chores, they don’t receive an allowance but they need money to work with to learn about money.)

Some activities to teach these skills:

If you can afford this in your budget, give your kids their age each week in allowance. Start it when they are old enough to know a little about money such as a nickel is worth less than a dime even though it’s bigger.

In this example, a ten-year-old gets $10 per week. It’s easy to remember!

They don’t get it all though. Transfer 50% of their weekly allowance to a savings account in their name to save up for a future parent-approved more expensive and awesome thing. For my kids, it was a high school trip.

This way they learn to manage their cash each week. So in my example, the 10-year-old has saved $5 a week for long term and has $5 to spend this week or soon.

Work with them each week on what they want to spend their money on. Should they save up for two weeks in a row and buy a toy that costs $10? Or spend it now on candy or something that costs $5. Just be sure if they do spend it and now want something else, not to “bail them out.”

Once it’s spent it’s spent. Be strong Moms and Dads! Let them understand the consequences and maybe feel a little pain now and then.

The keys here are giving them money to work with, saving some for something big later that they’ll really enjoy, and making some mistakes that can be learning experiences.

3. Speaking up – learning to dig into the details

The lesson to learn – not being afraid to ask questions.

Learn the ins and outs of your purchases so you can make wise money decisions.

Some activities to teach these skills:

Take “show and explain” a step further. Show, explain and participate in family discussions on money purchases. For example, if you are considering buying a new dining room table. Go through the discussion with the family of buying a more expensive heirloom table versus a less expensive second-hand table that is functional.

Ask such questions as:
- How long will be in this home? What would be the cost per use?
- If we move, will it fit into a future home (so we might wait for the heirloom?)
- Do we want to worry about spill or rings on the expensive table?
- Would we get a great deal of enjoyment in having special family meals or dinner parties with a beautiful table?
- Are there other places we’d get more value for our money with our family? What could we use the extra money for if we buy the second-hand table? Maybe we should buy a camper instead!
Ask their opinion and help them learn to think things through. This teaches them to analyze purchases and to share their opinion (even though they know the parents have the final vote.)

Blind taste test – choose some store brand or generic products as well as brand name products and test them not knowing which is which. Determine when it’s best to purchase a brand name versus a store brand in taste or use. Compare prices and determine when to save the difference in cost. Some products to use are food items such as cereal, juices, and cookies.

4. Spending – give Tweens and Teens responsibility for a spending category.

Tweens and teens want control over their lives – give some to them and turn it into a money lesson.

The lesson to be learned– how to make wise money choices.

Stretch your household dollars. Tying the number of hours worked to the cost of an item.

Some activities to teach these skills:

Put your tween or teen in charge of something such as toiletries. Give them a fixed amount of money per month to manage this “cost center.” Let them keep the difference!

A tween who isn’t buying their own hair care products may tend not use them up, want the latest products and spend on highly marketed and expensive products.

Give them a budget for shampoo, body wash, toothpaste, etc. and set them loose to purchase. They may start using the entire product (watering down at the end of the bottle to get every drop), buying on sale, generic brands and use coupons since they get to pocket the savings.

Gradually give them more and more money responsibility such as a clothing allowance and fuel when they are driving. When it’s “their money” they are spending and they can keep the difference, the lesson is more effective.

5. Materialism doesn’t bring happiness.

The lesson to teach – money doesn’t bring fulfillment and joy.

Money helps to reduce financial stress and can enhance our happiness. But true happiness lies elsewhere.

Some activities to teach this skill:

Hours worked formula. Take a field trip to the mall or store. Choose a whole list of things they’d like to have or dream of having and write down the prices. Use their wages per hour (for chores, babysitting, and part-time work) to determine how many hours they would have to work to pay for an item.

At $10 an hour for babysitting, your daughter would have to work 12 hours to purchase this specific pair of leather boots or a stylish jacket. Don’t stop at clothing, use electronics – iPad, computer, or phone. Looks at precious gems – diamond ring compared to costume jewelry.

Research different professions and what they make. Look on Payscale.com or Indeed.com and determine their hourly rate. Divide their annual rate by 2080 to get an hourly rate. Determine how many hours they’d have to work per profession.

In conclusion:

If we teach them how to manage their money at an early age, when they take their first job, they will naturally start to fund their 401(k) from day one. They will save up for emergencies, they will avoid credit card debt, and they will think through buying a home versus renting a home.

In short, they’ll have a better chance to be financially secure in an uncertain world.

Additional resources:

Sites

Money As You Grow

AICPA 360 Degrees of Financial Literacy

Book

Dave Ramsey – Smart Money Smart Kids

Article

WSJ – Apps and Websites to Teach Your Kids About Money

Resource

Her Quests: Girls Ages 5 – 9
April 21, 2019
12 Ways To Pay Off Debt And Remain Debt-free In Retirement

How can Baby Boomers pay off debts and remain debt-free forever?

This is a guest post by Patricia Sanders

Being debt-free is just a dream for many Baby Boomers.

Due to the financial crisis in 2008, many people who are now at their retirement age have no savings. Some people have already crossed their retirement age and still working due to lack of savings. Some baby boomers are suffering from poverty in their retirement due to huge debt. They have already lost their property in bankruptcy to get out of the debts.

A large number of baby boomers are receiving Social Security checks and debt collection notice at the same time. They are not able to manage their medical cost and due credit card bills while managing other household costs.

According to the report The Plastic Safety Net by public policy organization Demos, in the year 2012, baby boomers aged 65+ had $9,283 average credit card debt. Now the Experian’s State of Credit 2016 report also revealed that Boomers have higher average credit scores than Millennials. But they have almost double the average credit card balance.

Credit card debt is restricting a large number of seniors to announce their retirement. They want to enjoy their golden age without worrying about their debts. If you are one of them who want to retire debt-free, then you have to know the ways to tackle your current debts first.

12 ways you can get out of credit card debt to retire debt-free:

First of all, DON’T PANIC.

It’s ok if you have debts. Nothing to worry about it. Just be patient and keep calm. Having debts is already depressing, and if you panic, it could make the situation worse. Instead, think of how you can eliminate your debts quickly.

Calculate debt

Sit down and calculate how much debt you’ve acquired till date. I know it feels exhausted to sit down and count bills. But I guess, you have no other choice. You owe money to your creditors, and they won’t leave you until you pay back all their money.

Take out a consolidation loan to pay off all your debts

If you have multiple debts, then you can take out a consolidation loan to pay off all debts. After that, you just need to manage only the new loan. However, you should try to take out the loan with a low-interest rate. Shop around to get a low-interest consolidation loan.

Follow the debt avalanche method

If you have multiple high-interest rate credit card debt, then you can follow the debt avalanche method to get rid of the debts fast. By following the debt avalanche method, you can pay off your debts on your own. You just need to know how this method works.

In the debt avalanche method, you need to arrange your debts from the highest interest rate to the lowest interest rate. Now you need to make larger payments to the highest interest debt while paying the minimum to the other debts.

Once you repay the highest interest debt, start making large payments to the second highest interest debt. Don’t forget to pay minimum payments to the other debts. Keep following the method until you repay all the debts.

Sign up for a debt relief program

Becoming debt free is not a child’s play. You may not be able to learn a new debt repayment method to get out of the debts on your own. Thus, you can consider professional debt relief help to get out of the debt faster. You can get the best solution to eliminate debt by enrolling in a professional debt relief program.

You can consider debt consolidation or settlement depending on your financial ability and the size of the debt. If you are not sure which debt relief option can be good for you, then you can go fo the credit counseling. They will scrutinize your present financial condition and suggest you the best debt relief option for you.

Prioritize payments

Prioritizing your payments is a must. Whether you pay the high-interest debt first or the lowest bills first, you should make minimum payments on all your debts except targeting one debt. If possible, pay a few dollars extra on your debts to get rid of them fast.

How can baby boomers stay away from future debts in their retirement?

If you are moving closer to your retirement, then you should try to save more and more. It will help you to avoid further debts in your retirement. However, most of the baby boomers don’t have enough savings. Thus, they should avoid debt at any cost to stay debt-free in their retirement.

Here are some ways you can avoid debt in your golden years.

Stop borrowing money

If you don’t have enough cash to buy something, then don’t buy it now. Whatever might be the reason, you shouldn’t borrow a single penny from anyone or anywhere. If you do so, you’d pile up more balances and find difficulty in paying them. Wait for some time and buy when you have money. Try to cut down unnecessary expenses to set aside money. When you will save enough money for the item, buy it with cash.

Craft a realistic budget

You are retired and want to stay debt-free. So now, it’s time to scrap the old budget that you were following and create a new realistic budget that would cover all your financial goals. Include only the necessary items in our budget. Stick to the budget to avoid debts.

Are you finding it hard to draft a budget? Don’t worry! You can get help from budgeting apps like Mint, Digit, PocketGuard, Wally, Level Money, Spendee, and more.

Use cash as much as possible

There is no alternative to using cash especially when you want to stay debt-free. You tend to spend less and can track your money if you use cash for all your purchases. So, next time make the payment in cash if you buy something.

Avoid using credit cards for daily purchases

Remember, credit cards are not free money. You have to repay the bills. You should try to avoid credit card usage to avoid further debts. If you feel comfortable with credit cards, then make sure you pay the credit card bills in full and within time. Don’t buy an item with a credit card that you can’t afford in cash.

Sell old goods to earn some extra bucks

Few people even work after retirement. If you’re one of them and need money, then sell your old, unused goods to earn extra dollars. Even if you’re working, you can earn money by selling your unused goods in a garage sale. Think about it!

Shift to a smaller place

When you have limited income, you should try to cut down extra cost. Staying in a bigger home can increase your expenses on maintenance and decoration. Moving into a smaller place would free up a lot of money. You have multiple cars, then sell all the cars to avoid losing money on fuel, maintenance, and car insurance. You can stick to one car if you stay far from the city.

Lastly, getting rid of debt doesn’t mean that you’ve to refrain yourself from enjoying life. It’s not possible for anyone to only pay off debts and do nothing else. Find cheap and low-cost entertainments to enjoy your retirement day.

I know, being in debt is really haunting. But, you have to face it no matter what! Nothing is impossible and becoming debt-free is no exception. You need to have faith and believe in yourself that one day you’ll eliminate all your debts and enjoy your retirement wholeheartedly.

January 26, 2019
37 Easy Ways To Grow Your Net Worth This Month

Your paycheck is the ticket to growing your net worth.

One paycheck may seem small but taken together, over your career, you’ll make over a million dollars. The key is how you use that paycheck.

Are you on track for retirement? Spoiler alert: Chances are if you are unsure if your future retirement is fully funded, it’s probably not. (It’s hard to do so it takes some effort.)

Oh and, you probably won’t win the Mega Millions lottery cash prize this year either (even if you buy a ticket.)

If you are behind on investing for retirement and worried you’ll never be able to retire, you can catch up by making some simple money moves.

You might also want to read How To Effortlessly Increase Your Net Worth

The key is to take actions, however small.

Tiny money moves can translate into huge progress when taken together. Just like one paycheck may not seem to matter, one money move may not move the needle to increase your net worth. But a series of small money moves can help you achieve financial independence.

While you don’t have to do ALL of the moves I’ve listed below, pick a few to make this month. Join my husband, Jay and I in making 12 Tiny Money Tweaks this month. Need ideas? Here you go.

Here are 37 ideas to grow your net worth this month:

1.    Increase your 401(k) payroll deduction by an amount you won’t notice much (such as 1% or a specific dollar amount.)

2.    Look at your credit card statement and review your transactions for mistakes.

3.    Set up an aggregator to track your budget. Your bank may have one such as Keybank’s Hello Wallet. Try Personal Capital or Mint.com.

4.    Bring your lunch instead of buying lunch.

5.    Go through your closet and put together a wardrobe capsule (so you don’t have to buy anything new.) check out Project 333 to build yours.

6.    Cancel a recurring expense you don’t use anymore (such as Pandora or the gym.)

7.    Look up the interest rate on your credit cards.

8.    Pay an extra payment on a credit card with the highest interest rate.

9.    Set up a systematic investment to a mutual fund or investment account (over and above your retirement account.) Choose an amount you are sure to be able to sustain even if its 25 bucks.

10.    Perform some kind of maintenance on your vehicle.

11.    Go through your freezer and cupboard to plan meals from your freezer.

12. Open a Health Savings Account or add to the one you have.

13.    Watch a DVD from your movie collection instead of renting or buying or going out to the movies.

14.    Have friends over for a potluck dinner and play a game instead of going out to dinner.

15.    Sell something you don’t use anymore on your neighborhood Facebook page, Craig’s list or Ebay.

16.    Rideshare or take public transportation for a day (or twice a week like me.)

17.    Set up an automatic payment to your credit card for over the minimum to make sure you never miss a payment.

18.    Set up a money binder for your budget and financial statements. Put the 12 Tiny Tweaks challenge tracker in the binder and write down your habit changes.

19.    Shop a consignment store, yard sale and estate sales for a household furniture item you need.

20.    Pick one day and don’t spend any money – no cash, debit card or credit card.

21.    Have a “no spend” entertainment night, date night or family night – make dinner, take in an art gallery, watch a movie or play games at home.

22.    Take the vitamins and supplements you have. Check out your stock for expiration dates. Set them out or put them by day in a pill box to use up.

23.    Renew your library card and pick out a book to read or listen to on audio.

24.    Go through your bathroom cabinet and take inventory of your toiletry items. Use your shampoos, conditioners, etc. that you have tucked away in your cabinet.

25. Transfer your balance from a high-interest credit card to a zero percent introductory offer and pay it off before the rate increase.

26. Review your credit card reward points and plan to use them for your vacation this year – free airline flight or hotel.

27. Invest your spare change. Use a service like Acorns which reviews your credit card transactions and rounds up your purchase and invests the difference.

28. Work out with the DVDs you have in your cupboard (Jane Fonda anyone?) or download a free fitness app like Nike Training Club to get in shape.

29. Prevent illness and increase your wellness by using your health insurance to get all the free preventive care services such as your annual physical exam with blood work to track your vitals, breast cancer exam, colonoscopy, and others!

30. Sign up for your free wellness plan at work.

31. Check your employee benefits to see if your plan has a set number of free counseling services through your employee assistance program. Some services they offer are stress reduction, family counseling, beating depression and substance abuse. They may also offer free financial planning or financial guidance.

32. Earn extra money by turning a hobby into a business. Pick something you already like to do. If you are an animal lover, pick something like a pet sitting package in your neighborhood. Feed the cat, walk the dog, water the plants, and park your car in their driveway while they are away.

32. Spend time in prayer and meditation. Try an 800-year-old prayer/meditation called the Rosary or sit in quiet contemplation and relaxation. Improve your health and your mental outlook this way.

33. Improve your investing acumen. Read about money on Forbes.com or Marketwatch.com. Pick up some solid investing books such as [name them.]

34. Set up a recurring appointment on your calendar every 3 months to remind yourself to increase your automatic savings plans by a smidgeon (or as much as you can.)

35. Write out a list of all your debts with the highest interest rate first. Then use the Avalanche Method to get out of debt by paying extra on the debt with the highest rate first. When that is paid off, take the entire amount (regular payment + extra payment) and pay that on #2 until you are debt free.

36. Set up a savings account for irregular (not monthly) but regular expenses such as birthday presents, holidays, and car maintenance. (Aka a Sinking Fund.)

37. Subscribe to my updates (if you haven’t already) and implement the tips I send out every week!

Pick a few easy ones to implement and make some positive changes this month. Your future self will love you for it.

Download my Tiny Tweaks Tracker form below (and get my updates) to record what actions you took!

January 6, 2019
How To Effortlessly Increase Your Net Worth
Do you want to grow your net worth, get on track for retirement, or get out of debt?

Skip the New Year’s Resolutions then; they don’t work.

We tend to give up by “New Year’s Resolution Ditch Day.” In 2019, that’s Thursday, January 17th, not even three weeks into the new year.

The problem with setting a really high bar for changing any behavior is everything falls apart in a few weeks and we’re back to our old ways.
- We took no action
- We accomplished nothing
- We wasted our time
Worst of all, we end up feeling defeated.

This year, let’s do the opposite with our money goals.

Make tiny money tweaks.

Instead of attempting to make a big bold change in a money habit, let’s make seemingly insignificant tweaks to what we are already doing.

Here’s the challenge:

This month, make twelve tiny changes to your finances.

Choose ones that are so ridiculously easy, you don’t feel any stress about doing them.

These tiny tweaks set up a chain reaction of change in your financial life. Small effortless changes become big bold money moves.

How?
- We took action. Not just one action, but many.
- We accomplished a lot. The changes stuck.
- We used our time wisely because it worked.
Best of all, we grew our net worth and set up automated systems that will be in place for years to come; actions that will have a lasting impact.

Take the 12 Tiny Tweaks Money Challenge.

My husband and I are taking on a challenge this month to make twelve tiny tweaks to our finances. Join us for the challenge!

Here are some tiny money tweak examples:
1. Set up an automatic transfer from your checking account to your savings account to hit the day after you get paid every month. Choose an amount that is ridiculously easy for you — an amount you won’t even notice. The dollar amount isn’t as important as setting up the automated investment. Increase it later.
2. Cancel a recurring expense for a service you don’t really need. Go through your bank account or credit card record to see what you use and what you don’t. Make a small move such as canceling the paid version of Pandora and go with the free version (listen to commercials!)
3. Look at your credit card statement and review your transactions for mistakes.
4. Go through your freezer and plan your meals for the week. Use what you have and save money on groceries.
5. Sell something on your neighborhood Facebook page, Craig’s list or Ebay. Use the money to pay down a credit card or make a car payment.
You get the picture.

One of these tiny money tweaks by itself is insignificant. Taken together they are a powerful way to grow your net worth.

By the end of the challenge, you have:

Saved money by using things you already have

Made more by selling what you don’t use

Reduced expenses by canceling a service (or two)

Set yourself up for success by automating your savings and investing

For some tiny money move ideas, check out this post!

Most importantly, you have grown your net worth easily because change came easily.

What tiny money tweak will you do first?
January 1, 2019
If You Aren’t Using Your HSA For Retirement Planning You Are Missing Out

Late starters to retirement planning have to do things differently to “catch-up.” Hacking your Health Savings Account (HSA) is one way to do just that.

The basics: Here’s how it works:

First, pair your high-deductible medical plan with a special account called a Health Savings Account (HSA.) This savings account is intended for you to have money set aside for deductibles and co-payments.

An HSA has triple tax benefits.

1. The funds come out of your paycheck on a pre-tax basis.

This gives you a tax break on the front end. For example, if you are in a 25% tax bracket and save $100 in your HSA, it would only cost you $75 out of your paycheck.

2. The funds grow tax-deferred.

You aren’t taxed on the interest the account earns since the funds grow tax-deferred in the HSA.

3. The withdrawals are tax-free.

When you use the funds for qualified medical expenses, withdrawals from the account tax-free.

Did you catch that? There is a tax break going in — pre-tax benefit, a tax break on the earnings — tax-deferred, and a tax break at withdrawal — tax-free for qualified medical expenses. I think the government wants us to use an HSA don’t you?

Related post – Can I Use My HSA For Botox Treatments?

How can you turn your Health Savings Account into a retirement account?

There is a special provision in the HSA where you can let the funds accumulate. You don’t have to spend them. Your HSA funds can then be invested in an investment account with options similar to your 401(k).

Hack Your HSA

If you are concerned about running out of money in retirement, hack your HSA.

Pay your medical bills out of your paycheck now while you are working. Invest in your HSA and let it grow for retirement!

Wouldn’t it be great to have $25K or $30K in an account just for medical expenses in retirement? Oh, and the funds would be tax-free.

What if I use the money for other reasons? Is there a penalty?

If on the odd chance you don’t have ANY medical expenses in retirement, you can withdraw the money and pay income taxes. There is no penalty for withdrawal after the age of 65 but tax-wise it will act like a traditional IRA or 401(k). You’ll be taxed on what you take out (if it’s not used for medical expenses.)

Withdrawals before the age of 65 that aren’t for qualified medical expenses would have a 20% penalty and the earnings would be taxable.

What’s the catch?

There are limits to your contributions. The IRS limits contributions for an individual to $3,500 per year (in 2019.) Families can contribute $7,000 per year. If you are 55 or over, you can contribute an additional $1,000 per year.

To hack your HSA to save for retirement, gut it out.

Use your paycheck for any medical expenses you have now. In retirement, you won’t have the steady paycheck to pay the expenses. Instead, you’ll have the HSA.

Won’t this give you more confidence in your retirement plan knowing you have squirreled away thousands of dollars you will need later on?

If you are the rare person who has no medical expenses in retirement, no harm no foul. You can use the funds to pay for Medicare premiums. Take a Mediterranean cruise with the rest. Just pay taxes on the withdrawal (as travel is not a “qualified” withdrawal) and call it good.

Trust me. You aren’t going to complain that you have “too much money” to spend in retirement!

November 17, 2018