Retirement as a concept is not very old. It can largely be traced back to the creation of Social Security in 1935. At this time Social Security was used to guarantee a fixed basic income for older workers so that they would leave their jobs and create vacancies for younger workers.

Now that retirement is taken for granted, most people wonder if they are saving enough to take care of their needs when they stop working. Though there is a lot of dispute regarding the issue, many financial experts believe that you need approximately 70% of your pre-retirement income to allow you to continue living your same lifestyle after retirement.

The ability to live the same general lifestyle on 30% less money hinges on decreased expenses that come with retirement and an increase in age. According to a study by the U.S. Census Bureau from 2002, people between the ages of 45 and 54 spend approximately $15,000 on housing while people 75 and older spend only about $8,000. Also people between 45 and 54 spend more than $9,000 every year on transportation while those above 75 and older spend only about $3,000. This reflects a drop not only in the cost of buying a vehicle but also maintaining one - the money spent on gas and repairs – which often comes with not having to commute to work among other things.

Though retirement does not bring only savings, people between 45 and 54 spend $2,550 on healthcare a year while those above 75 spend $3,584 on average.

Significantly, this same study points out that income before taxes for a household kept by a 45 to 54 year old person is $64,974 while for people 75 and above it is only $23,890. The ability for many retirees to survive on a significantly reduced income points to other fundamental, or sometimes forced, changes in expenses.

As a person gets older there is a decrease in the number of dependents in the household which leads to a reduction in food costs and other household expenses. Also, with the kids moved out, maintaining a large house is not only an extra expense but also impractical. Many retirees downsize their homes and can use some of the excess proceeds to add to their savings.

The money that you spend on entertainment in retirement is difficult to predict or find reliable statistics on (though the Census Bureau does report on it – its methodology is too vague). Some people end up spending more because they have more time and the freedom to do what they please with it. The only difference might be that your definition of entertainment might undergo a transition. You might now be going to yoga classes instead of a concert – or you might go to more concerts and less yoga (now that the stress of work is gone)! But these are largely personal choices and difficult to speak generally on, but if you plan on traveling the world when you retire, save accordingly.

The only real answer to the question of how much you need to retire is “how ever much you plan on spending.” The answer depends on how you intend to spend your time as a retiree. Examining these important categories, you can see that generally retirement comes with some inherent savings related to not having to go to work any more as well as usually no longer have children in the house; however, there are those that retire and actually spend more money than before. How you plan on living during retirement is a uniquely personal choice – perhaps you are planning on taking advantage of the time to take the trips you’ve always wanted or maybe you are content to read the great novels you never had time for before. Both choices sound great but each comes with very different financial costs.

Whatever your vision of the perfect retirement is, start planning for it sooner rather than later - because you do not want to reach your golden years only to find that you do not have enough gold to live the years comfortably.

You need to keep a close eye on your credit score because it can affect your life in surprisingly diverse ways. Besides the obvious, making it difficult to get loan approval, it can even sometimes affect you getting a new job. Many prospective employers now screen job applicants using credit reports based on the idea that someone with good credit will make a more responsible employee.

The bottom line is that poor credit can cost you both money and opportunities.

Whether your credit is great and you want to keep it that way or you need to start rebuilding poor credit, here are some easy tips:

1. It is obvious but very, very important: make sure that you pay your bills on time. The most important factor in determining your credit score is how you pay your bills, meaning whether you pay them at all - and if you do pay them whether you pay them on time.
2. Order a copy of your credit report at least once a year and carefully go through the contents. Everyone is entitled to one free credit report each year from each of the three credit reporting agencies. Annualcreditreport.com, the official site run by the agencies, is the best way to access your credit report for free, though these reports are without an actual credit score (which can only be obtained for a fee). The important thing is having the credit report itself, not the score, because the report is what is used to generate your credit score. So if you find any errors report them immediately to the credit bureau that you got the report from.
3. Don’t make the error of opening a lot of accounts within a short span, that is to say that there should be some time gaps between the openings of two credit card accounts for instance. Suddenly making a lot of credit available to yourself is bad for your score because it gives you the room to generate lots of debt quickly. This becomes especially important if you have a short credit history.
4. Do not open credit accounts that you do not need. Try to avoid opening that store credit card just to save 10% on your first purchase.
5. Make sure that your balances are always low when compared to your available credit. For example, if your total credit limit is $10,000, then your balances should be below about 25% of your credit limit - that is, you should owe no more than $2,500 total in order to help improve your credit score.
6. Don’t close paid-off credit cards. That’s right; do not close paid-off credit card accounts. It may sound crazy, but instead keep the account open and just stop using it. The reason for this relates to the last point: you want to keep your balances below 35% of your available credit and closing an account could prevent this. Let’s look at an example. If you have two credit cards with $5,000 limits and owe $2,500 on one card and nothing on the other card you are using 25% of your available credit – a very good ratio. This is because you have $10,000 in available credit and are using $2,500, or 25%. Now, if you close the paid-off card, you suddenly have only $5,000 in available credit but still owe $2,500 – meaning you are now using 50% of your available credit. This means closing the paid-off credit card actually hurt your score.
7. Get installment credit. Installment credit – a car loan or personal loan – is a great way to build credit and compliments revolving credit, like credit cards, leading to a higher overall credit score and a more complete credit history.
   

If you are reading this now not worried about having poor credit but instead trying to build a credit history, here are some tips to establish yourself:

1. Have a family member make you an authorized user of his or her credit card. This adds an entry into your credit score and works for minors too. A warning though, make sure the credit card has a clean history or your first credit report entry will be a negative one.
2. Open a checking or saving account if you do not have one already. Lenders often view these as a sign of financial stability.
3. Apply for a student credit card because they are usually fairly easy to get – but be smart using it! (They are easy to get because they often have very high interest rates.)
4. Apply for a store credit card.

There are several tricks that credit card companies can use to hike fees and potentially lead customers into an endless cycle of debt. One such practice is known as universal defaults and enables companies to increase interest rates if a cardholder makes just one late payment to another credit card company or even pays a phone or utility bill late. This means that if your credit card payment arrives past due, you risk having interest rates on all of your other cards rise. The trouble is that nearly half of all US banks use universal defaults, enabling them to raise interest rates as high as 40%. Nationwide, banks collected a record $17.1 billion from such penalty fees in 2005, a 15% increase from 2003. Meanwhile, late-fee charges increased 160% over a 10-year period to an average of more than $33 per late payment in 2005. Clearly this is a problem that needs to be addressed, but sadly it may be a reality until lawmakers decide to change the laws.

Unpaid medical bills do not go on your credit report unless the hospital or doctor to whom you owe the money subscribes to at least one of the three major credit reporting agencies (Experian, Equifax or Trans Union) or the debt is turned over to a collection agency. Moreover, if you dispute the validity of the debt within 30 days of receiving a payment notice, a creditor or debt collector cannot place the account on your credit report without a notation that you are disputing the debt.

Once a medical bill is recorded on a credit report it still can be removed if you agreed to pay the debt and negotiated to have the account removed from your credit report. Be sure to get any such agreements in writing, however, as otherwise it will not be legally binding. Do not only rely on the debt collectors oral promise that the account will be removed!

Garnishing wages is one of the only ways that creditors can get access to funds owed to them by their customers. Federal laws regulate just how much of a persons wage can be garnished and outlines several other restrictions that are in place to ensure that people are still able to make a living. Below is the actual federal law regarding wage garnishing:

UNITED STATES CODE: TITLE 15, CHAPTER 41, SUBCHAPTER II

§ 1673. Restriction on garnishment

(a) Maximum allowable garnishment

Except as provided in subsection (b) of this section and in section 1675 of this title, the maximum part of the aggregate disposable earnings of an individual for any workweek which is subjected to garnishment may not exceed

(1) 25 per centum of his disposable earnings for that week, or
(2) the amount by which his disposable earnings for that week exceed thirty times the Federal minimum hourly wage prescribed by section 206 (a)(1) of title 29 in effect at the time the earnings are payable,
whichever is less. In the case of earnings for any pay period other than a week, the Secretary of Labor shall by regulation prescribe a multiple of the Federal minimum hourly wage equivalent in effect to that set forth in paragraph

(b) Exceptions

(1) The restrictions of subsection (a) of this section do not apply in the case of
(A) any order for the support of any person issued by a court of competent jurisdiction or in accordance with an administrative procedure, which is established by State law, which affords substantial due process, and which is subject to judicial review.
(B) any order of any court of the United States having jurisdiction over cases under chapter 13 of title 11.
(C) any debt due for any State or Federal tax.
(2) The maximum part of the aggregate disposable earnings of an individual for any workweek which is subject to garnishment to enforce any order for the support of any person shall not exceed
(A) where such individual is supporting his spouse or dependent child (other than a spouse or child with respect to whose support such order is used), 50 per centum of such individual's disposable earnings for that week; and
(B) where such individual is not supporting such a spouse or dependent child described in clause (A), 60 per centum of such individual's disposable earnings for that week;
except that, with respect to the disposable earnings of any individual for any workweek, the 50 per centum specified in clause (A) shall be deemed to be 55 per centum and the 60 per centum specified in clause (B) shall be deemed to be 65 per centum, if and to the extent that such earnings are subject to garnishment to enforce a support order with respect to a period which is prior to the twelve-week period which ends with the beginning of such workweek.

(c) Execution or enforcement of garnishment order or process prohibited

No court of the United States or any State, and no State (or officer or agency thereof), may make, execute, or enforce any order or process in violation of this section.

§ 1674. Restriction on discharge from employment by reason of garnishment

(a) Termination of employment

No employer may discharge any employee by reason of the fact that his earnings have been subjected to garnishment for any one indebtedness.

(b) Penalties

Whoever willfully violates subsection (a) of this section shall be fined not more than $1,000, or imprisoned not more than one year, or both.

§ 1675. Exemption for State-regulated garnishments

The Secretary of Labor may by regulation exempt from the provisions of section 1673 (a) and (b)(2) of this title garnishments issued under the laws of any State if he determines that the laws of that State provide restrictions on garnishment which are substantially similar to those provided in section 1673 (a) and (b)(2) of this title.

§ 1676. Enforcement by Secretary of Labor

The Secretary of Labor, acting through the Wage and Hour Division of the Department of Labor, shall enforce the provisions of this subchapter.

§ 1677. Effect on State laws

This subchapter does not annul, alter, or affect, or exempt any person from complying with, the laws of any State
(1) prohibiting garnishments or providing for more limited garnishment than are allowed under this subchapter, or
(2) prohibiting the discharge of any employee by reason of the fact that his earnings have been subjected to garnishment for more than one indebtedness.

While it may be tempting for college students to whip out a credit card and simply charge their expenses, experts warn that that kind of mentality could end up hitting students harder than they think. For all the benefits of building a credit history early in life, there are many more drawbacks for not meeting monthly payments on credit cards. Nationwide, elderly and younger people are facing increasing amounts of credit card debt because they don't understand how credit cards work or fail to correct their spending habits. According to www.creditcards.com, 83% of college undergraduates have at least one credit card with an outstanding balance of more than $2,300! Meanwhile, the combination of credit card debt and student loans can be crushing to students looking to find a career and build a life after college. How can this be avoided? Simple, just remember to spend less than you earn, diversify your investments, save regularly and often, and remember rule number one.

Soon Americans may be able to push back even the most basic forms of spending: parking meters. Wisconsin is testing the waters in the capitol city of Madison with new meters that will accept credit cards. The city said it would begin testing the new meters next month and leave them in operation for 90 days. Instead of a line of gray meters, the new system will use a single battery-powered box that controls up to 14 spaces. While each system costs $10,000, the city hopes to recoup the costs with collection and maintenance savings. The spaces will cost $1.25 per hour but the city could change the rates at different times of the day depending on demand. Some see this move as yet another move towards a cash-less society that further leverages itself with debt in order to cover even more of our daily lives.

Prepaid credit cards are a wonderful idea for children and for those struggling with debt.  Prepaid credit cards work just like a normal debit or credit card, but the limit on the card is what you initially place on the card before it is activated. The limit allows you only to spend what is on the card, and you cannot be charged with fees thereafter or with bill payments each month.  

However, there is a catch to prepaid credit cards.  Each time you initiate a new card, there is an activation fee that applies, usually between $5 and $10 to setup the account.  With that, you will also have to pay additional fees for each time you deposit money on the card.
 
Prepaid credit cards work just as well as any other credit card and can be used anywhere and anytime.  Prepaid credit cards work well for people that are dealing with poor credit and need to use a credit card for bill payments, credit applications, etc., but that have been denied for credit cards and other credit.  However, there have been issues with companies not allowing monthly bill payments with prepaid credit cards, such as automatic monthly bill payments, for fear that there may not be sufficient money in the account at the end of the month.  

Prepaid cards are a wise tool to use for children, teaching them how to balance and account for their own finances.  They also work great for people trying to get back on their feet while struggling with debt and credit issues.  

“Life takes Visa.”  We’ve all heard the slogan.  Yes, Visa is accepted virtually everywhere around the world.  And now, it’s common that Visa is also being accepted at your local church. Visa’s ad campaign has repositioned the organization from a credit card company to a major player in electronic payments, offering credit, debit, prepaid and commercial products. The company wants to be known for the ability that their cards and services are accepted anywhere and anytime all over the world.  Even at church.

Credit cards, in general, are becoming ever more popular with temples, synagogues, churches, and other places of worship. If you forget to bring your donation change or cash, don’t worry, you can probably use plastic. Over the last year, the ability to use credit cards to donate to places of worship has increased over 21% over the last year.

In addition to onsite kiosks, worshippers can set up automatic donations online, much like they do with car or utility payments, said Bill Dobbins, vice president of merchant relations at Visa. Charging your charity allows you to keep better track of payments, while streamlining record-keeping and cutting down on mailing costs for religious organizations.

Most people believe that “offshore” banking is illegal, and quite comparable to money laundering.  However, it is not illegal.  Offshore banking is only illegal when you do not inform tax authorities about your decision to bank offshore.  It is very important to discuss the idea before-hand with a qualified financial advisor. The problem is found when you do not report taxes on these offshore accounts, whether you forget or try to sneak it past the government.  The IRS believes that they lose an average of $70 billion a year to taxes lost to these tax havens abroad. Most offshore banks are domiciled in Panama, the islands of the Caribbean and the Bahamas. 

Offshore banking allows people to save tax legitimately by having interest paid on their savings before the deduction of tax.  The tax saving advantages of banking offshore are generally only available to a few people who are usually expatriates, non-residents in a high taxation country and with tax liability in a country where taxation is low or even non-existent. However, the asset protection benefits, personal privacy advantages, and the potential to access better account structures and services are available to the majority of us when we choose to bank offshore.

Many offshore jurisdictions are strongly regulated to protect investors and to prevent money laundering, which can grant those who bank offshore a greater degree of confidence and security. Many jurisdictions have strict guidelines that cover the maintenance of client privacy, which grant those seeking personal and asset protection the assurance that their identity and transactions will remain confidential. Offshore structures such as bank accounts and trusts are often used to protect your assets from potential unfair litigation.

There are many benefits to banking offshore. Most offshore banks allow you more flexibility and access. As well, offshore banks generally pay better interest rates and often have lower charges. It is common that offshore banks offer flexibility and the benefits necessary for those who regularly travel for work or pleasure; as for those who travel often, multiple currencies and easy transactions from all around the world are another benefit to doing offshore banking. 

However, there are some issues with offshore banking. It is important to know the risks of offshore banking, as it is possible that a situation may arise that your offshore bank may not meet international standards (such as those set by the Financial Action Task Force and the Organization for Economic Cooperation and Development) and your account can then be frozen and inaccessible. 

It is common that most offshore investors are fairly ordinary people - dentists from Chicago, manufacturers from Frankfurt and merchants from Tokyo - who have been advised by their accountants to funnel at least some of their assets offshore.  Offshore banking is infamous for housing accounts to drug dealers and terrorists.  The amounts of money to be invested within various countries is a limited amount, as you most likely will not be able to invest $3 billion into a Caribbean bank.  It is now becoming more common that most offshore banks will not take more than $5,000 in cash deposits and will generally require a third-party testimony, by an accountant or lawyer, as to the source of the deposit. 

Food is the third most costly aspect of our lives. However, when it comes to organic foods, the price tag is much higher. US shoppers who consistently choose healthy foods spend nearly 20 percent more on groceries. The study also said the higher price of these healthier choices can consume 35 to 40 percent of a low-income family's grocery budget. Organic foods are, by far, the most expensive of all groceries.  

Analysts claim that the demand for organics drive prices down over time. However, that is not the case so far. Even though organics sales are growing by about 20 percent a year, nearly10 times the rate of increase in total US food sales, these cleaner, greener products still carry a hefty premium.

Today, roughly three-quarters of conventional grocery stores carry natural and/or organic food, according to a 2002 Food Marketing Institute study. Restaurants across the country, from the high end to the greasy spoon, are plunking organic ingredients onto their menus. Still, organics represent only about 2 percent of the food industry, both in the U.S. and worldwide. And less than 10 percent of U.S. consumers buy organic items regularly.

If you are one of the go-hard organic goers, you already know that you have to account for the greater costs of your annual food bill. If you are only the occasional organic shopper, your bank thanks you for now. It is important to know the difference among foods when buying organic versus the non-organic. Ask your local grocer about the differences among meats, fish, fruits, and vegetables when they are or aren’t organic. Some foods aren’t different, although the price tags may represent a gap larger than the Grand Canyon. However, there are a large number of organic foods that truly present a much healthier means, and that may be worth the extra few dollars. 

We’ve all been caught fighting our consciences: whether to pay $9 for an alcoholic mixed drink, or to pay $5 for a coffee drink. The fact of the matter is, if you are to splurge on such beverages to go, such as a Starbucks coffee, a vending machine 20 ounce soda, or a night on the town with too many to count mix drinks, do it sparingly. The costs of splurging on such beverages to go can be costly, and these costs will quickly catch up to you. There is hope.

Plain and simple, the answer to saving yourself money is to supply yourself with the beverage of your choice at your own home.  Sure, you may be missing out on the ambience of the quaint little coffee house down the street or the music of the live band at the local pub, but it will pay off once you realize how much money you can save. There is no need to entirely cut-out spending money on buying beverages outside of your home, but just watch your spending carefully.  Instead of making a Starbucks stop every morning on the way to work, try making your own coffee at home – even if you choose to buy bagged Starbucks coffee, ground or whole bean.  

As for buying a 20 ounce soda from the work vending machine for $1.25, buy a 6, 12, or 24-pack of soda (cans or bottles) at the store and save around four times the amount of money you’d otherwise spend on buying a soda at work when you can just bring a can or bottle from home.  The same goes for juice.  Instead of buying an individual bottle of apple or orange juice, you can easily bottle your own or buy a larger quantity pack of individual bottled juices to take on the road with you. Items that you can buy at the store and use for the road at your convenience will save you a lot of money in comparison to buying one at a time while being put on the spot.

The same concept goes for alcohol. You can easily buy a bottle for a fraction more than the cost of buying just one drink out on the town. As this is not to prevent you from painting the town red occasionally, it is to suggest that it will be cheaper to throw a shindig at your place once and a while. As well, set a limit for the amount of drinks you wish to have and plan accordingly for the costs when you do decide to visit the bars; do not surpass your limit (financial or drink limit) throughout the night. Drinks can be costly, especially when the end of the night approaches and you have far exceeded your wallet’s restraints because you have not only bought more drinks than you need, but you have also bought the entire bar a round of drinks and shots.  

Think about the beverages at your home. Buying beverages, such as juice, soda, alcohol, and coffee at the store and utilizing at your own home and at your own convenience will save you a lot of money.  You can easily buy individual bottles in large quantity packs, or you can buy large single bottles in which to carry with you in a water bottle or another container, such as an on-the-go travel mug. This can be applied in any situation on the go: work, traveling on the road, flying, school, or sporting events. 

Life is expensive, plain and simple. Where does all of our money go?
 
1.    Housing
The largest life expense is housing.  Consumers spend an annual average of $12,320. That's roughly a third of average annual expenses.  We all need a place to sleep, and so our budget shows.  We sleep 1/3 of our lives away, why not pay 1/3 of our annual budget to housing then?
People in the West and Northeast spent the most on housing; $14,000 and $13,500, respectively. Midwesterners came in third, at about $12,000, and Southerners paid the least, clocking in at $11,000.

2.    Transportation
Transportation comes in at second place for the most expensive costs within our annual budget.  Transportation costs continuously rise each year.  In 2000, consumers spent about $7,500 a year, or almost 20% t of annual expenses just getting around. Those costs come almost exclusively from cars: 46 cents of every transportation dollar spent went to vehicle purchases, 17 cents to gasoline and motor oil and 31 cents to costs like auto insurance and repairs. Only 6% was claimed by public transportation.

3.    Food
Eating absorbs another 14% of consumers' total yearly expenses. In fact, this basic necessity is claiming a larger portion of the budget pie as dining out becomes increasingly popular among busy, dual-income families. Of the $5,150 or so spent on food, only less than 60% went to groceries eaten at home.

4.    Entertainment
Only about 5% of our annual budgets are spent on entertainment, with such expenses as vacations and movies. With the inclusion of dining out and alcohol, the budget jumps to about 11%.  This varies greatly by age, as the younger generations spend more on entertainment, coming close to spending 14% for those under 25.  It is also believed that senior citizens tend to also spend more, on such means of entertainment as vacations.