Yahoo! Finance

Keeping inflation at bay and saving on “back to school” items

September 1, 2022

The leaves are starting to change colour, the nights are cooler, and our little kids and grandkids are queueing up for the school bus once again.

But this year, with a backdrop of the highest inflation rate in decades, what are parents and grandparents to do when it comes to saving on back to school items? Save with SPP scoured the Interweb for some savings ideas.

Inflation, reports the CBC via the MSN website is a bit of a double whammy. First, we spenders have less coins in the wallet. “I just don’t have as much money to go around,” single mom Monica Belyea tells the CBC. And second, prices for school items have gone up. Or, as the CBC notes, there can be “shrinkflation,” where the price of something, say pencils, has not actually gone up, but you are now getting fewer pencils.

Tips from the CBC article include “shopping at home” to see if you can round up many of the needed school items from last year’s purchasing, as well as “carefully comparing prices between stores, waiting to buy certain items when deals are more abundant, and using coupon-code apps when online shopping.”

Pat Hollett of the Barrie, Ont.-based Canadian Savings Group suggests starting simply. “Don’t don’t grab the first thing you see. Shop around and pay the lowest price you can for the same item,” she tells the CBC “Price match where you can … Try other brands, if they’re cheaper.”

Her top tip is to “employ multiple techniques at once,” and shop “using coupons, cash-back offers and points, and tapping points cards to reduce prices as much as possible,” the CBC reports.

Writing for the Nerd Wallet blog via Yahoo! Finance, Hannah Logan notes that 36 per cent of Canadians surveyed are expecting they’ll spend more on back to school items this year than they did in 2021.

Her article recommends price matching.

“Price matching is a service provided by some retailers and grocery stores. Essentially, it means the store will honour a competitor’s lower price on a product, as long as it meets the parameters of their price-matching policy,” she writes.

“Some retailers are so eager to win your business (and confident in their prices) that they’ll not only match a competitor’s price, but offer to beat it by a certain amount or percentage. This could add up to big savings, especially if you’re shopping for big ticket items or multiple students,” the article continues.

Other saving tips outlined in her article include the idea of “buy now, pay later,” using money-saving apps, looking to see if your province offers any assistance (in B.C., certain kids’ clothes and school supplies may be tax exempt), and using “the right” credit card that offers cash back or other rewards.

Global News adds a few more back to school tips. If, the article suggests, your kids’ clothes are large enough to at least last through September, buying clothes in October – when sales begin – will be much more reasonable.

If you need electronics for the kids – such as tablets or laptops – think about going the “used” or “refurbished” route, the article suggests.

“Stores… can provide refurbished electronics at a cheaper rate than buying new, and shopping around local buy-and-sell communities or even swap groups can find you the equipment you need on a budget,” the article suggests.

If you know a kid is going to need a new laptop for the coming school year, start saving up for it months ahead, the article advises.

And if you do manage to outfit the kids with all they need for school – and save a few bucks in the process – a good home for those savings is the Saskatchewan Pension Plan. With SPP, your retirement savings are invested for the long term at a very low cost, growing into a future stream of retirement income. SPP is open to any Canadian with registered retirement savings plan room – consider signing up today.

Join the Wealthcare Revolution – follow SPP on Facebook!

Written by Martin Biefer

Martin Biefer is Senior Pension Writer at Avery & Kerr Communications in Nepean, Ontario. A veteran reporter, editor and pension communicator, he’s now a freelancer. Interests include golf, line dancing and classic rock, and playing guitar. Got a story idea? Let Martin know via LinkedIn.


JUL 11: BEST FROM THE BLOGOSPHERE

July 11, 2022

Even if you have zero saved for retirement, these steps will get you started

One of the findings of a recent survey from the Healthcare of Ontario Pension Plan (HOOPP) was that “32 per cent of working Canadians said they have yet to save anything for retirement.”

South of the border, reports GoBankingRates via Yahoo! Finance, the situation is similar, with 23 per cent of Americans having saved nothing for retirement, and “25 per cent of Americans between 45 and 55 years old” not having even started saving.

Like dieting and going to the gym more often, saving for retirement is something we know is good for us but is easy to avoid doing. GoBankingRates offers a few ways to fire up your own personal retirement savings program.

The first step is to start budgeting, the article notes. “When payday comes around, it’s tempting to pay for immediate expenses, such as rent and groceries, and use the rest of that money for spending and splurging. Instead, you should consider budgeting,” the article urges. “By setting aside a little money every month towards retirement, you will be able to enjoy that money in the future,” states Jay Zigmont of Live, Learn Plan in the article.

Next, the article continues, is addressing your debt load.

“Debt is a frustrating thing to have, but the sooner you are able to eliminate it, the more money you will have for saving for retirement, investing and spending,” the article tells us. This is a very valid point. Next time you get your credit card bill, see how much interest you were charged on the balance over the last month. That amount could go to savings if you were able to pay off the card.

To target your debt, the article advises you to first be sure to make at least the minimum payment on all debts. They then advise that you put any extra money you can on the debt with the highest interest rate. Once that one’s gone, add what you were paying on high-interest debt 1 to high-interest debt 2, and repeat until you are debtless.

A third idea in the article is goal-setting for savings.

“Make sure you know why you are saving,” Zigmont states in the article. “What do you want your retirement to look like? What are you willing to give up to get there? What is the dollar number you need to hit to retire? When do you want to do it by?”

If you want, for example, to have $20,000 in savings for 20 years of retirement, a target might be $400,000. For simplicity, we are not talking about interest rates and investment returns in this example, but both can help you get there.

Other ideas from GoBankingRate include investing your savings, rather than putting it all in a savings account. “Follow the general rule of only investing in things you understand,” Zigmont states in the article. “Take the time to learn what your options are and be sure to understand both what you are investing in.” In Canada, your choices include workplace pension plans, the Saskatchewan Pension Plan, registered retirement savings plans (RRSPs), Tax Free Savings Accounts (TFSAs) and plain old cash trading accounts. Be sure you know the limits and rules for each type of investment vehicle.

The final advice in the article is to “take ownership” of retirement. “The key to retirement is making it your own,” the article concludes. Do you want to fully retire, or move to part-time work? Having an idea of what your own retirement will be like will help guide your savings plan, the article concludes.

Over many years of reviewing books for Save with SPP, there was one piece of advice that really stood out, and actually worked for us when money was tight. That idea was to put aside five per cent off your pay for savings right off the top, and then live on the rest.

A barrier to savings is the feeling that you won’t have anything left over after bills and groceries. But if you take five per cent off the top, and put it somewhere where you can’t get at it to spend, you’ll be amazed how quickly the savings start to add up, and how little you miss the five per cent (eventually).

A safe and secure cookie jar for your newfound savings is available through SPP.

With SPP, you can stash away up to $7,000 per year in a locked-in, voluntary defined contribution plan. “Locked-in” means you can’t raid your savings for non-retirement expenses; you can only access the money once you reach retirement age. And during that run up, your money will be invested professionally and at a low cost. SPP is a sensible savings option available to any Canadian with RRSP room; check them out today!

Join the Wealthcare Revolution – follow SPP on Facebook!

Written by Martin Biefer

Martin Biefer is Senior Pension Writer at Avery & Kerr Communications in Nepean, Ontario. A veteran reporter, editor and pension communicator, he’s now a freelancer. Interests include golf, line dancing and classic rock, and playing guitar. Got a story idea? Let Martin know via LinkedIn.


JUN 20: BEST FROM THE BLOGOSPHERE

June 20, 2022

Things to start getting rid of before retiring

An article by Gabrielle Olya, writing for GoBankingRates via Yahoo! Finance, notes that when we retire, we tend to downsize, both in terms of our living space and – for nearly all of us – our income.

Her article identifies 25 things we can sell prior to retiring, in light of the twin truths that we may not only be living in smaller quarters, but with less income.

First, she suggests, is your home. By selling off your current abode, “you can use the funds to buy a smaller place or put the money toward rent and deposit any leftover money into savings. Downsizing your home can not only save you money, but it also can save time and effort because you have a smaller property to maintain.”

You won’t, she continues, need your fancy work clothes anymore, and may be able to get some dollars for them at a consignment shop. With more time and workout options at hand, maybe the home gym equipment can be sold off as well, Olya writes.

Another area for downsizing is the garage, she notes. “Even if you’re done paying off your car, it can still be a major expense between gas, insurance, maintenance and repairs. If you and your partner each own a car, consider selling one of them. Even if you only have one car, it might be cheaper to sell it and get around using rideshare services or public transportation.”

Consider, Olya suggests, selling off “bulky furniture” if you are moving to a smaller place; this can be done easily via Facebook Marketplace or Kijijii, or you can go “old school” and sell via consignment shops.

Other things the article mentions that can be sold off include holiday decorations, old computers (that still may be worth something), old kids’ toys that your adult children (or their kids) don’t want or need, the book collection, and, notably “collectibles and antiques.”

“Like books, collectibles and antiques can take up a lot of space that you might no longer have if you downsize your home. It’s fine to hold onto a few things with sentimental value, but assess whether these items would be worth more to you if you turned them into cash for your retirement savings,” writes Olya.

For years, Save with SPP had a large collection of boxed items that made the move, years ago, from Barrie to Waterloo, and on to Toronto and finally Ottawa. When we finally had time to open all the boxes up, we found it was mainly keepsakes and low-value collectibles that mostly ended up at Value Village. So take inventory of what you have boxed up in the basement, and see if any of it has resale value or can be gently donated. Your future you will thank you.

The money you save through this process will give you more spending power in retirement. And if you trim back on things before retirement, this newfound money can form – as the article says – a part of your long-term retirement savings. If you’re a Canadian with registered retirement savings plan (RRSP) room, consider the Saskatchewan Pension Plan (SPP), a voluntary defined contribution plan that may be just what you’re looking for to help you save. You can contribute up to $7,000 a year to SPP, and can also transfer up to $10,000 annually from other RRSPs. Check out this made-in-Saskatchewan solution today!

Join the Wealthcare Revolution – follow SPP on Facebook!

Written by Martin Biefer

Martin Biefer is Senior Pension Writer at Avery & Kerr Communications in Nepean, Ontario. A veteran reporter, editor and pension communicator, he’s now a freelancer. Interests include golf, line dancing and classic rock, and playing guitar. Got a story idea? Let Martin know via LinkedIn.


JUN 13: BEST FROM THE BLOGOSPHERE

June 13, 2022

U.S. study suggests annuity holders “feel more on track” in retirement

A new U.S. study has found that Americans who have annuities feel more “on track” and have a more positive outlook on retirement than those who don’t have annuities in their portfolios.

The study, conducted by Athene, a “leading provider of savings products,” was reported on in a recent article posted on Yahoo! Finance.

The study found that 75 per cent of those with annuities felt “on track” for retirement, versus a figure of 26 per cent for those without them, the report notes. The Athene study also found that 55 per cent of Americans worry they will run out of money in retirement, the article states.

An annuity (available to Saskatchewan Pension Plan members as a retirement option) is a financial product. In return for converting some or all of your savings into an annuity, you will receive a monthly lifetime pension for the rest of your life. And the higher rate of interest we’re experiencing is actually good news for those considering an annuity, since the higher the rate at the time of purchase, the larger your monthly annuity payment will be.

The study, which found that soon-to-be retired Americans worry about such things as inflation and market volatility, also found that not all respondents fully understand annuities. Twenty three per cent said they did not know what an annuity was, the article reports. However, 71 per cent said they would prefer to get regular monthly payments from their retirement savings versus “a lump sum,” which was preferred by just 29 per cent of respondents.

As well, only 22 per cent were aware that annuities “offer protection in down markets,” since once an annuity is selected, your monthly payment remains the same regardless of any market downturns, the article adds.

Getting a professional’s input is also seen as an important factor for those choosing an annuity, the article notes.

“In addition to ownership, working with a financial professional can also bring greater awareness of what an annuity is. Thirty-six per cent of adults who have never worked with a financial professional say they do not know what an annuity is, compared to the eight per cent of adults currently working with a financial professional who stated the same,” the article states.

“As market volatility and inflation continue to rise, it’s crucial for financial professionals and retirement savers alike to debunk the myths and truly understand the benefits and functionality of annuities,” states Adam Politzer, Senior Vice President of Product Actuary at Athene, in the article.

Those of us who have workplace pensions tend to either have a defined benefit plan, where you get a lifetime monthly payment based on a formula that looks at your earnings and years of employment, or some sort of capital accumulation plan where you save during your working years and then convert the savings to income on retirement.

The payout from a defined benefit plan is basically the same as annuity – retirees get a monthly payment for as long as they live, and there are options for survivors, including a lifetime pension based on some or all of the member’s pension.

In our own case, for example, we both plan to choose lifetime annuities from SPP, with 100 per cent of the payment going to whoever is the last standing. This is the same option we both chose for our workplace pensions, and as the article says, annuities feel more like getting a paycheque than getting one big payment a year might be. It also means we will have less “lump sum” money to manage overall – we think running the investments might feel more difficult once we are in our 80s and hopefully beyond.

With SPP, you can choose from a variety of annuities to convert some or all of your savings into monthly income when you retire. It’s pretty unique for any voluntary savings plan to offer an annuity option right within the plan – just another reason why so many Canadians are looking to SPP to play a part in their retirement savings program.

Join the Wealthcare Revolution – follow SPP on Facebook!

Written by Martin Biefer

Martin Biefer is Senior Pension Writer at Avery & Kerr Communications in Nepean, Ontario. A veteran reporter, editor and pension communicator, he’s now a freelancer. Interests include golf, line dancing and classic rock, and playing guitar. Got a story idea? Let Martin know via LinkedIn.


How to beat inflation’s squeeze at the grocery checkout

March 17, 2022

With inflation now hitting the five per cent level for the first time since the pre-Internet, pre-home computer days, Save with SPP decided to seek out a few ways to try and save on the good old grocery bill.

Inflation is definitely taking a bite out of our food budgets, reports Burnaby Now. Citing recent research from Angus Reid, the newspaper reports 62 per cent of Canucks are “eating out less” and “are buying less produce to save on the grocery bill.”

More than 50 per cent of those living in Saskatchewan, Manitoba, B.C., Ontario and Atlantic Canada say it is “difficult to feed their households.” The article notes many shoppers are switching to “cheaper, lower-quality brands to compensate for lower food costs.”

OK, less fresh produce, generic brands – what else are folks doing?

A story in the St. Catharines Standard notes that shoppers are “trading down” from more expensive meats, like beef, to “pork or chicken.”

An article in Yahoo! Finance offers more than a dozen solid ideas on how to get more bang for the buck. Watch, the article advises, for “manager markdowns,” or specials, on pricey meats, poultry and fish that are nearing their expiry date – and be sure to have those for dinner that day.

Other ideas from Yahoo! include watching for sale flyers and using coupons, the use of grocery savings apps, and taking part in loyalty programs at your local grocery store. An interesting tip from the article is to avoid shopping “at eye level,” because it is typically the most expensive items that are placed where the eye falls. Who knew?

Other advice includes buying in bulk, as well as purchasing holiday items AFTER the holiday is over, so you get them at a discount and are set for next year.

The WebMD site offers up some additional classic grocery-saving tips.  Plan ahead, the site suggests. “Take inventory of what you have on hand so you don’t overbuy,” states Katharine Tallmadge, RD, in the article. Your list should be based on what you actually need, and should take into account how you plan to use up leftovers, the article adds.

Healthier foods, the article continues, are often cheaper. Swap your pop for cheaper flavoured water, the article advises. Other tips include buying produce in season, to “think frozen, canned or dried” to save, swapping vegetable sources of protein for more expensive meat, and the time-honoured concept of “waste not, want not.”

This last one is worth remembering. Our mothers made sure everything got used up, grocery wise, but these days, “Americans generate roughly 30 million tons of food waste each year,” WebMD reports. Don’t buy more than you need, the article concludes.

If you are able to shave a few dollars off your grocery bill, consider perhaps redirecting those loonies and toonies towards a longer-term goal – retirement! The Saskatchewan Pension Plan offers a one-stop shop for your retirement; the SPP can invest your dollars, grow them over time, and then pay them out to you as retirement income in various ways, including the option of a lifetime monthly annuity.

Join the Wealthcare Revolution – follow SPP on Facebook!

Written by Martin Biefer

Martin Biefer is Senior Pension Writer at Avery & Kerr Communications in Nepean, Ontario. A veteran reporter, editor and pension communicator, he’s now a freelancer. Interests include golf, line dancing and classic rock, and playing guitar. Got a story idea? Let Martin know via LinkedIn.


Jan 10: BEST FROM THE BLOGOSPHERE

January 10, 2022

New year, new plan to fix your finances?

Writing for the GoBankingRates blog via Yahoo! Finance, Jennifer Taylor suggests that the start of 2022 is a great time to review your personal finances.

“The new year is here and you’re ready to make serious changes to your financial situation,” she writes. “Whether you’re buried in credit card debt, haven’t started saving for retirement or don’t currently have an emergency fund, you’re committed to turning things around in 2022,” the article continues.

She raises an interesting idea, courtesy of Ryan Klippel of Optas Capital – that your budget for this year should be focused on whether or not “you were cash flow positive or negative last year.”

If you were cash flow positive – meaning you had money left over after meeting all your obligations – “great, now set a savings goal for 2022” for the extra money, the article suggests.

If, on the other hand, you were cash flow negative – meaning you have more obligations than money – “spend the time to determine what expenses were luxuries versus necessities, and trim accordingly,” the article notes.

For those of us with debts to address, states Klippel in the article, “sometimes setting smaller goals to start is better than overly ambitious ones. For example, it is much more realistic and digestible to eliminate credit card debt for one card than five.”

The rest of the article offers tips on how to turn your personal financial ship of state around.

  • Save more money: Even if you could save just 10 per cent of your salary per month – leaving you 90 per cent to spend – you’d have a full year’s salary in the bank after 10 years, the article suggests.
  • Retirement savings: Pay your future self first, the article suggests, and make retirement savings a priority, even over saving for kids’ education. Often, people want to do more things in retirement than they have done in their working lives, so more retirement income is positive, the article adds.
  • Don’t let money control your life: It’s easy to get into the cycle of living paycheque to paycheque, but the article advises that “gratification comes when you take control of your life and the power you get when you wake up and realize you have money in the bank.”

Other great ideas suggested in the article include building up your emergency fund, changing your spending habits (via reflecting on how you spend and having a plan to change your ways), and paying your credit card in full each month.

This last one is particularly good advice. There are a lot of us who can’t pay off credit card balances. That basically means we are “buying” things that we won’t pay for in full for years, all while getting charged double digit interest. Often, one ends up in a “pay the bank first” scenario, due to rising minimum payments on credit card balances. Turning this around so that you pay the thing off in full will mean you can bid a fond farewell to all that compounding interest – and create a new pool of cash that you can put away for your future retirement years.

As we start a new year, your financial planning should for sure focus on retirement savings. The Saskatchewan Pension Plan equips you with a do-it-yourself, end to end retirement system that takes your contributions, invests them, and turns that nest egg into future retirement income. You can even get a lifetime pension through SPP’s family of annuity options. Find out how SPP can help you pre-build a secure retirement!

Join the Wealthcare Revolution – follow SPP on Facebook!

Written by Martin Biefer

Martin Biefer is Senior Pension Writer at Avery & Kerr Communications in Nepean, Ontario. A veteran reporter, editor and pension communicator, he’s now a freelancer. Interests include golf, line dancing and classic rock, and playing guitar. Got a story idea? Let Martin know via LinkedIn.


Oct 4: BEST FROM THE BLOGOSPHERE

October 4, 2021

Despite pandemic, retirement savings are still ticking along: report

As the brutal financial impacts of the pandemic washed over us – businesses forced to close, workers laid off, and so on – many observers expected that retirement savings might have to be raided so people could keep afloat.

New research from the U.S. suggests otherwise, reports Yahoo! Finance.

Recent research carried out by the Investment Company Institute found that “most Americans have not taken any withdrawals from their defined contribution (DC) retirement plans,” Yahoo! Finance reports. As well, “the vast majority of U.S. savers have continued to make contributions to their plans through the pandemic,” the article notes.

“Despite the economic challenges over the past year and a half, retirement savers show deep commitment to preserving their retirement nest eggs,” Sarah Holden, ICI senior director of retirement and investor research, states in the article. “The combination of ongoing contributions and few participants taking withdrawals reflects DC plan participants’ long-term mindset and preference to keep this money earmarked for retirement and avoid dipping into it.”

Paradoxically, the pandemic – a period where many thought money would be very tight – has turned out to be a period of higher rates of savings, the article notes.

“Though many households have been faced with financial constraints over the past year and a half, the aggregate personal savings rate has increased since COVID-19 first reared its head in the beginning of 2020,” the article states.

Indeed, here in Canada, the CBC reports that the average Canadian has saved $5,000 during the pandemic, thanks to “the combined impact of reduced spending and collecting more money from government support programs,” the broadcaster reports.

With less to spend on, Canadians attacked their debt loads and were still able to stash away “$5,574 per Canadian on average in 2020, compared to $479 in the previous year,” the CBC notes.

Back in the U.S., the ICI report found that only “1.1 per cent of all DC plan participants stopped contributing to their plans in the first half of 2021,” reports Yahoo! Finance.

It’s good to hear that people generally are leaving their retirement savings alone, despite the strange economy and overall odd spending era the pandemic has brought us. No matter what’s going on today, eventually all of us will reach an age where the income we get from working declines, and the income we need from our savings escalates.

Workplace pensions certainly help with retirement income; if you are in a program at work, be sure to maximize your participation if you can. If you don’t have a workplace pension plan, the Saskatchewan Pension Plan is a voluntary DC plan that professionally invests your savings and can help you turn it into an income stream when you hang up your working hat for the last time. They’ve been doing it for 35 years – check out SPP today!

Join the Wealthcare Revolution – follow SPP on Facebook!

Written by Martin Biefer

Martin Biefer is Senior Pension Writer at Avery & Kerr Communications in Nepean, Ontario. A veteran reporter, editor and pension communicator, he’s now a freelancer. Interests include golf, line dancing and classic rock, and playing guitar. Got a story idea? Let Martin know via LinkedIn.


July 26: BEST FROM THE BLOGOSPHERE

July 26, 2021

Your 20s may be the best time to start saving for retirement

Writing for Yahoo! Finance, Phoebe Dampare Osei points out that your 20s is a good time to start saving for retirement.

“Your 20s is that decade where society says you’re old enough to have some responsibilities, but young enough that you haven’t quite settled down yet,” she writes. She notes that statistics from the U.K., where she is based, show most couples aren’t getting married until their 30s these days, a big change from the 1970s when they married younger.

Similarly, U.K. stats show people aren’t buying their first homes until they are in their 30s or older, she adds.

“But what about life after 60? It may seem odd to be thinking so far ahead, but your future you, will thank your present you, if you take care of yourself now,” writes Dampare Osei. We love that sentiment!

Her suggestions:

  • “In your 20s you have fewer responsibilities than someone much older, so it’s easier to save now than a lot more later with more financial pressure.”
  • “State pension alone will not cover you — check with your employer to make sure you are eligible and auto-enrolled.” (Auto-enrolment in a workplace pension plan is not a common practice in Canada – so here at home it’s up to you to find out if there’s a retirement plan and how you can qualify to join it.)
  • “If you do not have enough money saved for retirement you may have to keep working beyond state pension age. Working into your 70s if you don’t have to and don’t want to doesn’t sound like much fun.”

This last point is very true. Many people without retirement savings simply say to themselves well, I’ll keep working until 70. That sounds great when you are younger and healthier, but will you be healthy enough to keep punching the clock by age 70? Not everyone is.

She raises a good argument about state benefits not being all that great.

To Candianize this a bit, the current maximum benefit from the Canada Pension Plan is $1203.75, but the average amount is $706.57, according to the federal government’s own site.

The maximum Old Age Security payment, again per the government’s web, is $626.49.

In fairness to the government, these benefits were never intended to provide the only income people receive in retirement – when they were launched, most people had workplace pensions, and these programs were designed to supplement that.

So the most anyone could get from both programs is a little over $1,800 a month – and not everyone qualifies for the maximum.

The point Dampare Osei makes is a very good one. When you are young, single, and just starting out in the workforce, you probably don’t have as many expenses as you will when you’re in your 30s, married, raising kids and paying a mortgage. So it’s a good time to start your retirement savings program.

Another great reason to start early is the “magic” of compounding. The longer your money is invested, the more dividends and interest it will accrue.

As an example, the Saskatchewan Pension Plan has averaged an eight per cent rate of return since its inception 35 years ago. And while the past rate of return is of course no guarantee of what SPP will do in the future, the track record is worth noting. If there isn’t a workplace pension plan to sign up for, the SPP may be just the thing for you. And as Dampare Osei correctly notes, your future you will be very pleased if the current, youthful you gets cracking on retirement now rather than later.

Join the Wealthcare Revolution – follow SPP on Facebook!

Written by Martin Biefer

Martin Biefer is Senior Pension Writer at Avery & Kerr Communications in Nepean, Ontario. A veteran reporter, editor and pension communicator, he’s now a freelancer. Interests include golf, line dancing and classic rock, and playing guitar. Got a story idea? Let Martin know via LinkedIn.


July 5: BEST FROM THE BLOGOSPHERE

July 5, 2021

Does being broke have an upside – better money management skills?

An interesting column by Terri Huggins, published on Yahoo! Finance, provides a unique take on being broke.

Huggins (who freely admits to having lived through many broke years) takes the position that so-called broke people may actually be better with money than those who are, for want of a better phrase, unbroke.

When you have less money overall, she writes, “financial awareness becomes more of a survival tactic than a money habit.”

People without money don’t have the “luxury” of “putting off dealing with… financial fears and stresses.” She says that while living on a shoestring is certainly not much fun, “there is a silver lining… being forced to think about money constantly means you naturally become very good at thinking about money!”

This includes, she adds, “managing money problems and coming up with financial solutions that fit your immediate needs.”

The downside, Huggins, says, is that those low on income are naturally forced to focus on “immediate needs – with little thought for the long term.” If you are having trouble making this month’s rent, saving up money in an emergency fund is “pointless.”

She recalls her own broke years, where “every day was a financial emergency. How can you contemplate saving for retirement when you’re unsure if you’ll have enough to pay for food this month?”

The fact that those living on very tight money can’t realistically save for retirement or emergency funds sometimes gets them painted as being “bad with money,” Huggins writes. But the money management skills of those on low incomes may be quite the opposite, she says. “Broke or poor or otherwise financially struggling people everywhere are forced to make tough decisions every day, gamble with those decisions, and make sacrifices to somehow fund the things that truly matter.”

She summarizes the chief money insights that “broke” people have, and that others may wish to adopt:

  • Mastering money tracking – they know exactly how much money they have, and exactly what their bills are going to be
  • Every expense is a mindful decision – broke people don’t have the privilege of making “poorly thought out purchases on a whim.”

Huggins argues that so-called “financially sound” people probably don’t know what they make and what all their expenses are. She suggests they are far more prone to make impulse purchases or poorly thought-out decisions. Now that she herself is no longer on the broke side of the equation, she concludes by saying “I’m still able to take those broke-learned money management lessons with me as I strive to grow my savings, expand my investment portfolio, and create wealth for years to come.”

There’s a lot of very good advice here. We all live through periods of tight money – some of us for a while, others for many long years. If you know exactly what there is to spend on bills each month, and how much you’re earning, you are in command.

And when you get to that period where your income is more than the sum total of your monthly bills, be sure to think of your future. Once your personal finances are running in the black, put away a little of your personal “surplus” to help make life easier for your future self. A great place to stash that extra cash can be the Saskatchewan Pension Plan, where you can start small and build up your savings as your income grows. Check them out today!

Join the Wealthcare Revolution – follow SPP on Facebook!

Written by Martin Biefer

Martin Biefer is Senior Pension Writer at Avery & Kerr Communications in Nepean, Ontario. A veteran reporter, editor and pension communicator, he’s now a freelancer. Interests include golf, line dancing and classic rock, and playing guitar. Got a story idea? Let Martin know via LinkedIn.


APR 5: BEST FROM THE BLOGOSPHERE

April 5, 2021

Will your retirement dreams align with retirement realities?

Let’s face it – if you asked a bunch of folks what they think retirement looks like, more than a few would imagine it involves a sunny beach, a cool tropical drink, feet up, and full relaxation.

And maybe it does. But a new U.S. study has found that in reality, retirement isn’t always what we expect it will be.

An article in Yahoo! Finance, citing research from the Employee Benefit Research Institute (EBRI), notes that retired American seniors find they are “wrestling with spending worries, forced retirement and an identity crisis.”

EBRI’s Lori Lucas tells Yahoo! Finance that “We expect retirement is going to be one thing and then when you actually get into retirement, as your priorities have changed, you’re not as excited about doing things that you thought you were going to be excited about.”

The survey, the article continues, found that “fewer than one in four Americans think their current retirement lifestyle aligns with what they planned for their retirement to be.”

Travel, the story notes, takes a back seat to health and wellness as a top concern – 81 per cent put it first, with “quality time spent with family and friends” next at 68 per cent.

“You’re more excited about the quality of your relationships, and things that are not going to cost as much as we thought they were going to cost,” Lucas tells Yahoo! Finance.

The article also notes that after a lifetime of saving for retirement, there is a genuine reluctance to start tapping into the nest egg – even though that’s exactly why we saved it!

Six of 10 respondents in the EBRI survey “wanted to spend down only a small portion of assets, spend none at all, or grow their assets,” the article tells us.

Two other bits of advice the article provides are these:

  • Once you are in your 60s, retirement could come at any time – even before you plan it. “Layoffs, health or other reasons” can be behind an “unplanned” exit from the worforce, the article says.
  • There can be an “identity crisis” for retirees if they are leaving a job that they really felt defined them as people. Even retired people get asked what they did when they were working, which “almost makes it (retirement) seem like a less important existence,” the article adds.

The article says it is important to “fill your time with meaningful activities to give yourself that sense of purpose that you might lose” once you are retired. Another option is to ease into full retirement via retiring part-time – keeping busy with consulting, part-time work or “professional mentorships,” the article concludes.

Save with SPP, out of the full time work force for a seventh year, can attest to these latter points. You need to do something to replace the 40 hours – more if you count commuting time – that you’ve spent earning money to support your family. New interests, and reviving old ones, are among the keys to making your time more meaningful.

Fun is often expensive, however. Be sure you have a regular plan to save money for retirement. If you lack a plan, and really aren’t sure how to go about starting one, take a look at the Saskatchewan Pension Plan. You can start building an SPP nest egg slowly, and then ramp it up as you earn more. And when it’s time to give up your parking spot at work, SPP will help turn those saved, well-invested dollars into a stream of income to help finance your retirement “to-do” list. SPP, after all, has been in the business of securing retirement futures for 35 years.

Join the Wealthcare Revolution – follow SPP on Facebook!

Written by Martin Biefer

Martin Biefer is Senior Pension Writer at Avery & Kerr Communications in Nepean, Ontario. A veteran reporter, editor and pension communicator, he’s now a freelancer. Interests include golf, line dancing and classic rock, and playing guitar. Got a story idea? Let Martin know via LinkedIn.