More Uncertainty Than We Knew!

When we were looking for a title for our financial advice book for Boomers approaching their so-called "retirement" years, we settled on Boomers! Funding Your Future in an Age of Uncertainty. That title turned out to be more prophetic than we could have imagined.

We find ourselves in the midst of an international financial meltdown, the worst since the Great Depression. The sub-prime mortgage disaster is sinking even the largest banks. The government is trying to bail out those banks and get credit moving again. The stock market has been on a daily roller coaster ride, giving us all a stomach ache, especially when we look at all those disastrous 401(k) losses.

We don't have any quick fixes or magic solutions to offer. However, we thought we'd share some of our book with you, beginning today with the chapter we call Living on Less.We hope there's something here that you might find helpful.

Living on Less

“A penny saved is a penny earned.” It is one of Benjamin Franklin’s best-known sayings. It was sage advice, but old Ben gave that tip long before state and federal income taxes and FICA withholding. Depending on your tax situation, you may have to earn $1.35 to have one dollar in take-home pay. If you clip a coupon and save one dollar on a purchase, it has the same effect as going out and earning $1.35. These days, a penny saved beats a penny earned.

This chapter looks at many ways to cut costs and save money, both before and during retirement. Building up a nice cushion of retirement savings is Plan A, but if that falls short, living on less is the cornerstone of Plan B. For the vast majority of Boomers who are still working, trimming expenses can free up cash to boost savings or pay down debt. Once retired, lower living costs can stretch retirement savings further.

Cutting costs can involve minor nips and tucks, like taking your own lunch to work, or a major lifestyle overhaul, such as moving to a lower cost part of the country. Some cost savings may come easily, almost naturally. Many Boomers are finding that material things no longer provide much satisfaction. A generation known for its conspicuous consumption may now be moving toward a more reflective path. We find that the most meaningful times in our lives involve family and friends, and simple activities like hiking, cooking a meal together, or reading a good book.


Here are some Smart Ways to Save Money at home:

* Ask your insurance agent to look for a lower cost homeowner’s policy. It’s a competitive area, but most people just stick with what they have, year after year. If you switch, make sure the new insurer is financially sound.
* Ask how much you can save by increasing the deductible on your homeowner’s policy. You may save 25 percent on your premium by increasing your deductible from $500 to $1,000, according to the Insurance Information Institute.
* You may be able to get a lower homeowner’s insurance premium if you have a security system, a dead bolt lock, and if nobody in the household smokes.
*If you are at least 55 years old and retired, you may qualify for an insurance discount of up to 10 percent at some companies. The risk of burglary drops in homes that are occupied most of the time.
* If you refinance your mortgage, avoid variable rate loans. Why take on that uncertainty? Don’t keep refinancing with 30-year mortgages or you’ll never live mortgage-free. 15-year mortgages have lower interest rates, and allow you to “burn the mortgage” sooner.
* Energy Star appliances cost more up front, but save on energy in the long run. With high energy prices, the payback time is faster. Better for the environment, too.
* Compact fluorescent bulbs (CFLs) create as much light as an incandescent bulb but use one quarter to one sixth as much electricity, and they last 10 to 15 times longer.
* Install a programmable thermostat and set it to follow your family's normal routine. It allows you to adjust the times and temperature setting of your furnace according to a pre-set schedule.
* Arrange for a professional to perform a home energy audit to determine your home's energy efficiency. Use weather-stripping, insulate hot water pipes, and install pre-cut insulation gaskets around electrical switches and outlet plates on exterior walls.
* Have your furnace serviced annually by a qualified contractor to ensure safety and maximum energy efficiency. Change or clean filters on the furnace as needed.

We'll be sharing some more financial survival tips here as well as occastional advice on how to live with the stress that comes along with all of this financial turmoil.

For example, one way to transform feelings of fear or anger is to focus on the positive things in your life. Counting your blessings really helps at times like this. Take a quiet moment to think about just one thing that brings you joy, whether it's time with your life partner, your loyal pet or your children and grandchildren... a great walk with your best friend...spending time on your favorite hobby ...connecting with nature ...or deepening your spiritual practice.

Being mindful of the gifts that we can count on in our life can help balance the worry that financial uncertainty brings.