Human beings are prone to distraction by immediate events -- helpful in the days when an angry wildebeest might interrupt your dinner, but not so much when you're planning for retirement. "Reminders are one of the simplest, lowest-cost ways to cut through distractions and stay focused on your goal," says Yale's Karlan.
He and other researchers working with banks in Peru, Bolivia, and the Philippines looked at the impact of sending account holders reminders to save by text message or postcard. The savers who got those messages put away as much as 16% more.
Checklists are another effective tool to help you stay on task. As Harvard surgeon Atul Gawande pointed out in his 2009 book, The Checklist Manifesto, the simple act of going through one of these lists can help you avoid missing a vital step.
When surgeons and airline pilots began using them, hospital infection rates and pilot error declined. No wonder so many financial advisers rely on checklists for clients nearing retirement.
Now put these findings into action:
Arrange automatic prompts
It's easy: Just set e-mail alerts in your digital calendar or via a personal finance website such as Mint.com. The most effective, says Karlan, are as specific as possible ("put $1,000 in my Roth IRA on Dec. 1," not "save more for retirement"). Arrange for them to hit your in-box at tax time, at bonus time, and after your year-end statements arrive (to prompt you to rebalance).
Put a reminder where you'll see it every day
Remember that Northwestern study showing that thinking about a grandparent can help you save? Study subjects wore wristbands with the acronym WWGD (What Would Grandma/Grandpa Do?) written on them. Hokey, sure -- but effective. Placing a reminder of your goal where you'll see it day in and day out (a photo of your dream retirement house by your bed, for example) could have a similar effect.
Wednesday, September 8, 2010
Friday, September 3, 2010
7 secrets to a richer retirement #2 Try to beat the other guy
Thanks to their natural competitiveness and normal, comparing yourself to others that you can increase the speed of your goals - just look at TV's The Biggest Loser.
This strategy has the potential defined in retirement planning. Preliminary studies suggest that people who see data showing how their peers are saving are more likely to participate in their company retirement plans and to put more money in.
Thanks in part to these findings, a financial services company ING has recently created a website that allows eligible people to some 401 (k) plans that manages to compare their progress against their colleagues.
So far over 20% of people who have spent time with the tool you have made a positive change, and adherence to the plan or raise the percentage of salary to contribute, says Ashley Agard, head of research at the company's retirement.
Your coworkers can be powerful in another way too: they can put pressure on you to accomplish your goals. strategies called compromise, in which people publicly announce their intention to reach a target, generally are effective for those wishing to lose weight or stop smoking.
Now researchers are looking at how well they work to help increase savings. In 2008, Yale professors Ian Ayres and Dean Karlan StickK.com launched a free site that allows users to make a commitment to public or private, to virtually any type of goal.
To increase the pressure even more, users can bet money on the outcome. Researchers need more data to show how well the approach works commitments related to retirement, but early results are encouraging.
Now put these findings into action:
Benchmark
You can get INGcompareme.com, a public Web site managed by ING. There you compare your financial situation - anonymously and free - with about 140,000 others who have the same age, income, and other details.
The level of savings to fall short? Move! You're way ahead? Great, but just because you're hitting your colleagues do not necessarily mean that you will achieve your goals, warns Jack VanDerhei, research director of the Research Institute of Employee Benefits.
Make a commitment contract
You could do anything to tell some friends about your goal of saving and ask for your support - perhaps meeting once a month - to make a bet on the audience you will reach a specific level of savings for a certain period of time . You can pass through its promise of social media like Facebook or Twitter.
This strategy has the potential defined in retirement planning. Preliminary studies suggest that people who see data showing how their peers are saving are more likely to participate in their company retirement plans and to put more money in.
Thanks in part to these findings, a financial services company ING has recently created a website that allows eligible people to some 401 (k) plans that manages to compare their progress against their colleagues.
So far over 20% of people who have spent time with the tool you have made a positive change, and adherence to the plan or raise the percentage of salary to contribute, says Ashley Agard, head of research at the company's retirement.
Your coworkers can be powerful in another way too: they can put pressure on you to accomplish your goals. strategies called compromise, in which people publicly announce their intention to reach a target, generally are effective for those wishing to lose weight or stop smoking.
Now researchers are looking at how well they work to help increase savings. In 2008, Yale professors Ian Ayres and Dean Karlan StickK.com launched a free site that allows users to make a commitment to public or private, to virtually any type of goal.
To increase the pressure even more, users can bet money on the outcome. Researchers need more data to show how well the approach works commitments related to retirement, but early results are encouraging.
Now put these findings into action:
Benchmark
You can get INGcompareme.com, a public Web site managed by ING. There you compare your financial situation - anonymously and free - with about 140,000 others who have the same age, income, and other details.
The level of savings to fall short? Move! You're way ahead? Great, but just because you're hitting your colleagues do not necessarily mean that you will achieve your goals, warns Jack VanDerhei, research director of the Research Institute of Employee Benefits.
Make a commitment contract
You could do anything to tell some friends about your goal of saving and ask for your support - perhaps meeting once a month - to make a bet on the audience you will reach a specific level of savings for a certain period of time . You can pass through its promise of social media like Facebook or Twitter.
Wednesday, September 1, 2010
7 secrets to a richer retirement #1 Get a good picture of the future you
You must imagine that when you're retired, you will be fine as you are now - perhaps with a new fondness for early-bird specials and shows welfare PBS. But studies show that the present-day you do not really identify with that person a great future.
In fact, "the mind creates neural patterns similar to those created when you think about a stranger," says Northwestern University researcher Ersner-Hershfield Hal. This disconnect means that you're reluctant to trade rewards overnight rewards - the greatest obstacle to saving for retirement.
Behavioral scientists wondered: could create a better image of his old self help you better focus on their long-term goals? Researchers from Stanford University, which recently tested the question.
They put two groups of university students in virtual reality helmet and interact with them had real size versions of themselves. (Each student shares a bedroom with your avatar, which reflects a person's movements.)
A group of students found themselves at their current age, the other old saw transformed to appear 70 years old. Then the researchers asked the students how to save for retirement. Those in the latter group, said it would save twice as much on average as the others.
Experts are now building online tools to help you make such views. Example: Ersner-Hershfield and his colleagues are testing software that changes your photo as you move a slider to select different levels of savings.
If you choose a low savings rate, your current photo will be happy (I can spend more now), but the oldest will look sad (my nest egg is shrinking!). So far they have found that people who see older versions, more sad if you choose to save 6.75% of salary, on average, versus 5.2%.
Now put these findings into action:
Write it down
While you wait for this slider to a hit on the internet, making a low-tech exercise. Imagine the future of retirement you want - house by the lake? annual trips to Italy? sleep without worries? - In as much detail as possible. Then write down how you feel about that future. "Not only think, but the act of writing that helps you focus your thoughts and act," said Alessandro Previtero Ivey School of the University of Western Ontario.
Think Grandpa or Nana
"The grandfather of her sex with whom you most closely identified with a proxy can be great for your own future," says Ersner-Hershfield. Call it the mind can lead people to budget better and save more, researchers at Northwestern found.
In fact, "the mind creates neural patterns similar to those created when you think about a stranger," says Northwestern University researcher Ersner-Hershfield Hal. This disconnect means that you're reluctant to trade rewards overnight rewards - the greatest obstacle to saving for retirement.
Behavioral scientists wondered: could create a better image of his old self help you better focus on their long-term goals? Researchers from Stanford University, which recently tested the question.
They put two groups of university students in virtual reality helmet and interact with them had real size versions of themselves. (Each student shares a bedroom with your avatar, which reflects a person's movements.)
A group of students found themselves at their current age, the other old saw transformed to appear 70 years old. Then the researchers asked the students how to save for retirement. Those in the latter group, said it would save twice as much on average as the others.
Experts are now building online tools to help you make such views. Example: Ersner-Hershfield and his colleagues are testing software that changes your photo as you move a slider to select different levels of savings.
If you choose a low savings rate, your current photo will be happy (I can spend more now), but the oldest will look sad (my nest egg is shrinking!). So far they have found that people who see older versions, more sad if you choose to save 6.75% of salary, on average, versus 5.2%.
Now put these findings into action:
Write it down
While you wait for this slider to a hit on the internet, making a low-tech exercise. Imagine the future of retirement you want - house by the lake? annual trips to Italy? sleep without worries? - In as much detail as possible. Then write down how you feel about that future. "Not only think, but the act of writing that helps you focus your thoughts and act," said Alessandro Previtero Ivey School of the University of Western Ontario.
Think Grandpa or Nana
"The grandfather of her sex with whom you most closely identified with a proxy can be great for your own future," says Ersner-Hershfield. Call it the mind can lead people to budget better and save more, researchers at Northwestern found.
Thursday, August 19, 2010
Things You Shouldn't Be Paying For
So much money and energy is wasted on things we could get for free. If you're into new things, and collecting shiny things, this is not for you. But if you want less clutter in your life and want to keep more of your money, then check out these 15 things you should not be paying.
Basic Computer Software - Thinking of buying a new computer? Think twice before you fork over funds for a lot of extra software. There are some alternatives to name brand software programs. The most notable is OpenOffice, the open source alternative to the other guys. It is completely free and the files can be exported in formats compatible.
Your credit report - You do not have to pay for your credit report. You can subscribe to a service free credit monitoring online to get a quick look at your credit report. You just need to remember to cancel the service before the end of free trial. Or you could do a better, visit www.annualcreditreport.com, the only truly free place to see all three of your credit reports for free once a year.
Cell Phone - The service plan can be expensive, but the phone itself does not have to cost a thing. Most major carriers will give you a free phone, even a free phone smart, with a two-year contract.
Debt Reduction Help - Speaking of credit cards, if you're over your head with the help of credit card, there are many free sources you can turn for help with your debt. Nobody will be able to magically wipe away their debts, but there is help out there will set you up on a plan of debt reduction that you can handle. Start with a visit to the National Foundation for Credit Counseling.
Books - There's a nice place in your town who is renting books for free: the library. Remember that place? Stop by and place your favorite book in the reserve. And if you do not want to leave, www.paperbackswap.com visit and find your books there (shipping extra small).
Water - In addition to the account monthly service, there is no reason to pay $ 1 per bottle of water you drink. Bottled water is so last decade, anyway. We're on top, and in touch, filters and reusable water bottles. It's cheaper for you and better for the environment.
Credit Cards - With so many credit cards that are available today, it is easy to avoid a credit card with an annual fee. Unless you're dead set on a special bonus, which brings a payment card, skip the card annual fee and the money from the same pocket.
Basic Tax Preparation - If your tax situation is not so complicated, then you should probably be preparing your own tax return using one of many online services free. It is now common for e-filing to be free, so, with many services. You will not need a stamp.
The News - Leave a blogger to try to kill the traditional printing. I'm not anti-newspaper. I just do not find them more practical. Spend the day 0.50 cents and receive on-line news. And for you coupon clippers dedicated, you can get more coupons from Sunday now also online.
DVD Rental - Did you know you can rent DVDs from local RedBox for $ 1 a night? And better yet, if you use a coupon codes www.insideredbox.com you can avoid the expense of U.S. $ 1. DVD rental free! Most libraries now have free DVD rentals as well.
Exercise - Skip the expensive gym associations. Visit your local park for a walk or run. From basic push-up programs and sit in your living room. Rent a DVD training library. There are many training programs free, you can download online.
Budget Tools - There are many budgeting tools (both online and desktop) that offer the service free. Do not ask me how they do it, but who cares. If you're looking to reign in some of its expenses, the good news is that you can do it for free.
Pets - This is a controversy, I know. But there are probably many pets down at your local animal shelter who could use love as well as the types of pure breed. There may be a small fee payable under shots and basic care, but you will get your pet home without paying a mini-fortune.
Shipping - If you like to shop online, you probably use coupons for a percentage off your purchase. Take your skills to the next level and look for coupons or codes that offer free shipping promotions. If in doubt, visit a site like www.freeshipping.org.
Current Account - Is not it nice when a bank takes your money, lend it to make money, and then has the audacity to charge for this service? What a joke. Verification should be free. If yours is not free, then switch to one of many banks that offers a checking account for free. And the same can be said for ATM fees, fees for cash and checks.
Basic Computer Software - Thinking of buying a new computer? Think twice before you fork over funds for a lot of extra software. There are some alternatives to name brand software programs. The most notable is OpenOffice, the open source alternative to the other guys. It is completely free and the files can be exported in formats compatible.
Your credit report - You do not have to pay for your credit report. You can subscribe to a service free credit monitoring online to get a quick look at your credit report. You just need to remember to cancel the service before the end of free trial. Or you could do a better, visit www.annualcreditreport.com, the only truly free place to see all three of your credit reports for free once a year.
Cell Phone - The service plan can be expensive, but the phone itself does not have to cost a thing. Most major carriers will give you a free phone, even a free phone smart, with a two-year contract.
Debt Reduction Help - Speaking of credit cards, if you're over your head with the help of credit card, there are many free sources you can turn for help with your debt. Nobody will be able to magically wipe away their debts, but there is help out there will set you up on a plan of debt reduction that you can handle. Start with a visit to the National Foundation for Credit Counseling.
Books - There's a nice place in your town who is renting books for free: the library. Remember that place? Stop by and place your favorite book in the reserve. And if you do not want to leave, www.paperbackswap.com visit and find your books there (shipping extra small).
Water - In addition to the account monthly service, there is no reason to pay $ 1 per bottle of water you drink. Bottled water is so last decade, anyway. We're on top, and in touch, filters and reusable water bottles. It's cheaper for you and better for the environment.
Credit Cards - With so many credit cards that are available today, it is easy to avoid a credit card with an annual fee. Unless you're dead set on a special bonus, which brings a payment card, skip the card annual fee and the money from the same pocket.
Basic Tax Preparation - If your tax situation is not so complicated, then you should probably be preparing your own tax return using one of many online services free. It is now common for e-filing to be free, so, with many services. You will not need a stamp.
The News - Leave a blogger to try to kill the traditional printing. I'm not anti-newspaper. I just do not find them more practical. Spend the day 0.50 cents and receive on-line news. And for you coupon clippers dedicated, you can get more coupons from Sunday now also online.
DVD Rental - Did you know you can rent DVDs from local RedBox for $ 1 a night? And better yet, if you use a coupon codes www.insideredbox.com you can avoid the expense of U.S. $ 1. DVD rental free! Most libraries now have free DVD rentals as well.
Exercise - Skip the expensive gym associations. Visit your local park for a walk or run. From basic push-up programs and sit in your living room. Rent a DVD training library. There are many training programs free, you can download online.
Budget Tools - There are many budgeting tools (both online and desktop) that offer the service free. Do not ask me how they do it, but who cares. If you're looking to reign in some of its expenses, the good news is that you can do it for free.
Pets - This is a controversy, I know. But there are probably many pets down at your local animal shelter who could use love as well as the types of pure breed. There may be a small fee payable under shots and basic care, but you will get your pet home without paying a mini-fortune.
Shipping - If you like to shop online, you probably use coupons for a percentage off your purchase. Take your skills to the next level and look for coupons or codes that offer free shipping promotions. If in doubt, visit a site like www.freeshipping.org.
Current Account - Is not it nice when a bank takes your money, lend it to make money, and then has the audacity to charge for this service? What a joke. Verification should be free. If yours is not free, then switch to one of many banks that offers a checking account for free. And the same can be said for ATM fees, fees for cash and checks.
Thursday, April 8, 2010
Are you making these 4 credit card mistakes?
Everyone makes mistakes, it is our nature. Sometimes because we do not know any better, and many times even though we do what we do.
Many of us have made some pretty big flubs with plastic and therefore it is always good advice to get some useful reminders of the big credit card so we can avoid past mistakes again.
Believe me, you can definitely get out of credit card debt and start working in the right direction with their personal finances, avoiding some of these credit card mistakes:
1. Not paying attention to due dates
This recently happened to me. I have my e-mail notification of the statement, records that in the back of my mind I had to pay that bill and, unfortunately, went to work and never bothered to pull the declaration of the back of my mind until two days after the bill was due.
I know what you're thinking - just automate the payment of bills! Yes, you should do, but I like to look at what is in the declaration and make sure everything is correct. This forces me to do so.
Making a late payment if only for a few days can accrue charges ridiculous that only compound their debt. Those charges can also upset to have an impact on your credit report. Be aware of the debt payments and pay on time is key.
What I do is to give American Express a call and see what they can do for me. Since we do not have a balance normally pay on time and have been a long time, loyal customers I hope they'll waive the charges for me.
2. Not paying your bill in full each month
This is where it all begins right? You're a willing victim crazy cycle. You buy something that can not afford and think: "I get paid in two weeks I am going to put in credit card and as I get the bill they will pay" and then something else appears.
Emergencies happen or find a trinket that you want to buy and you put in your credit card as well. At the end of the month you get a strong bill. What do you do? If you only pay what you can and after that the balance of the card that accumulates in insane amounts of interest, you're asking for trouble and perpetuate the cycle!
Just think, with a little discipline and some self-control that could have prevented the unnecessary expenses and used the money to open a Roth IRA or a background of some other type of investment account.
3. Not realizing that they have credit card problems
Well, this sounds silly, why not recognize that you have credit card problems? Well, it is actually quite easy. I spent most of my college years and shortly after living the high life without taking into account the thousands of dollars that was up!
I did not even realize there was a problem of credit card. I just discovered this was a normal part of life and once I made more money, then I would pay that debt! No big deal right?
Soon I realized that I had to make some drastic changes! Get real with yourself and ask if you have any problems spending.
4. Do not negotiate with credit card companies
It baffles me that more people do not call their credit card companies to negotiate with them. You can negotiate things like interest rates, late fees or payment plans. If nothing else, it does not hurt to give them a call and find out what you can do for you.
The person who never asks, never receives. Of course, now there is no guarantee that the credit card company will do nothing, but would not it be nice to know if they were willing to do anything?
Many of us have made some pretty big flubs with plastic and therefore it is always good advice to get some useful reminders of the big credit card so we can avoid past mistakes again.
Believe me, you can definitely get out of credit card debt and start working in the right direction with their personal finances, avoiding some of these credit card mistakes:
1. Not paying attention to due dates
This recently happened to me. I have my e-mail notification of the statement, records that in the back of my mind I had to pay that bill and, unfortunately, went to work and never bothered to pull the declaration of the back of my mind until two days after the bill was due.
I know what you're thinking - just automate the payment of bills! Yes, you should do, but I like to look at what is in the declaration and make sure everything is correct. This forces me to do so.
Making a late payment if only for a few days can accrue charges ridiculous that only compound their debt. Those charges can also upset to have an impact on your credit report. Be aware of the debt payments and pay on time is key.
What I do is to give American Express a call and see what they can do for me. Since we do not have a balance normally pay on time and have been a long time, loyal customers I hope they'll waive the charges for me.
2. Not paying your bill in full each month
This is where it all begins right? You're a willing victim crazy cycle. You buy something that can not afford and think: "I get paid in two weeks I am going to put in credit card and as I get the bill they will pay" and then something else appears.
Emergencies happen or find a trinket that you want to buy and you put in your credit card as well. At the end of the month you get a strong bill. What do you do? If you only pay what you can and after that the balance of the card that accumulates in insane amounts of interest, you're asking for trouble and perpetuate the cycle!
Just think, with a little discipline and some self-control that could have prevented the unnecessary expenses and used the money to open a Roth IRA or a background of some other type of investment account.
3. Not realizing that they have credit card problems
Well, this sounds silly, why not recognize that you have credit card problems? Well, it is actually quite easy. I spent most of my college years and shortly after living the high life without taking into account the thousands of dollars that was up!
I did not even realize there was a problem of credit card. I just discovered this was a normal part of life and once I made more money, then I would pay that debt! No big deal right?
Soon I realized that I had to make some drastic changes! Get real with yourself and ask if you have any problems spending.
4. Do not negotiate with credit card companies
It baffles me that more people do not call their credit card companies to negotiate with them. You can negotiate things like interest rates, late fees or payment plans. If nothing else, it does not hurt to give them a call and find out what you can do for you.
The person who never asks, never receives. Of course, now there is no guarantee that the credit card company will do nothing, but would not it be nice to know if they were willing to do anything?
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