Sunday, 10 February 2013

Saving With Annuities

When it comes to planning for retirement, there are a number of financial products. One that has become increasingly popular are annuities, which are a form of guaranteed income that act as purchase insurance.

One aspect that many find appealing about annuities is they aren't subject to conditions such as fluctuations of the economy, or to a certain point anyways. There are fixed and variable annuities to look into. While the interest rate can change, the principal is safe.

While an annuity is going through its growth period, there are not taxes involved. And they're often more liquid that other investments like CDs or treasury bonds.

Budgeting Basics

It can seem like a lofty goal for anyone that's never created a budget, but the truth is that anyone can do it.

Creating a budget is one of the smartest things you can do to help yourself with future financial planning.

There's a few simple rules to follow so that you can steer clear of any financial stress, and things are not as complicated as you might expect to getting off on the right track.

It starts with writing things down. Creating a log or plan of how your expenses work so you can keep track makes all the difference. Think of things as incoming and outgoing. There's your monthly income, and then there are all the bills and expenses that need to be covered.

Everything from credit cards, bills, gas, rent/mortgage, should be written down so you can take it all in to see where you are financially. Once you know where you stand, you can get an idea of spending habits and what is available to invest.

An important step to all this is managing your expenses, and keeping your documents up to date. There's all kinds of software available to do this, or you can track it in a spreadsheet. Maintaining records to help keep you on track will be a big part to determining your success.

Friday, 4 January 2013

The Mortgage Vacuum

Each month, my mortgage takes a sizable part of my income. I doubt that's unique, but wish that the interest wasn't so large. They say it can take at least 5 years of mortgage payments to pay off the interest, something I find more than a little discouraging.

Am I alone? Speaking with some girlfriends over lunch this week, we were all feeling the pinch. Between bills, putting away for retirement, investments, annuities, and similar, the proverbial cookie jar was low on stock. Being a sing 30 something working professional, I bought a condo about 2 years ago as an investment for the future. I figured you (mostly) can't go wrong with real estate.

Sometimes I still question owning versus renting. I've seen several arguments for either, and both sides make a compelling case. Lately I've been thinking of refinancing my mortgage as I think I can get locked in at a much better rate than I currently hold. When I first started to consider this, one question that stood out was when is the best time to refinance? It turns out that knowing your banks fiscal year end is key to getting the best terms so they can finish the year strong.