There has never been a better time to be a senior. Financial planning is crucial for seniors and those who are planning to retire within the next decade. It’s never too late to start planning your financial future and many senior citizens, as well as those on their way to becoming seniors, are doing just this. There are many aspects of creating a financial plan, and in the first part of this series we’ll be discussing the importance of determining your retirement goals.

As someone who has been around awhile you should already have some idea of what it is you enjoy in life. If you’re still trying to figure it out, don’t worry! I’m sure no one ever gets it figured out perfectly. The one thing you simply must determine, before sitting down to plan your finances, is the vision you have for your life, and the life of your family. The role of senior financial planning is to create a road map that will guide you to the substance of that vision.

You’ve worked your entire life, whether your time was spent at home with the kids or at the office. You have come to appreciate work, but maybe you’d like to work a little less and live a little more. The point I’m trying to make is; you need to determine exactly what your goals are and what it is you wish to accomplish.

Before I take on a client this is the first thing I discuss with them. Sometimes it’s nice to help people figure out what they want the rest of their life to be like, but I can only guide a person so far. If you do not determine what your goals are, if you have no vision, chances are you will not succeed with your financial plans. As the Bible says “without a vision the people fall away.”

How to Determine Your Retirement Goals

I advise doing this in an environment where you can relax. Make sure you have some paper and a pen/pencil handy.

To start with, list the 5 major areas of your life. Usually they consist of:

• Family & Relationships
• Health & Fitness
• Money & Income
• Hobbies & Recreation
• Spiritual & Mental

Everyone has at least 5 major areas in their lives, if not more. Try to be general when coming up with important areas, don’t list anything specific yet.

After you have your list created spend some time thinking of each area of your life. Reflect on the past and contemplate on the future. Write down how you want to spend the rest of your life in these areas. This is more than just writing a senior financial plan, this is deciding how you want to live and who you want to be.

There is a reason for doing this activity and it will make more sense as you move ahead, even though I’m sure most of you see the importance of this.

If you really think about it, what is the real reason a senior citizen would want to plan their finances?

The answer to that (in my opinion) is enjoyment. Sure you have the common necessities you need to pay for, but you’ve always had to plan on paying those things. The real question you need to ask yourself is; what do you want to do with the rest of your life? And then: How can I plan my finances in a way that will make this happen?

It’s true that the best things in life are free, but all of the other things are what add to it and make it much more worthwhile. For example, your family was free. It didn’t really cost you anything. Everything your parents spent on you (and everything you spent on your kids) was to add enjoyment, pleasure, and comfort into life. Your job is to decide exactly what that is from this point forward.

Here are some questions you can ask yourself to generate some ideas:

• What did I enjoy as a child that I still enjoy today?
• Do I enjoy work and should I continue working?
• Is there anything I enjoy so much that I’d consider starting or buying a small business?
• How do I want to spend the time I have left with my family (which activities do I want to do with them?) and what kind of money will I need?
• What hobbies do I have and what financial situation would I have to be in to continue them?

These are just some examples to get your mind thinking. Once you have written down everything you can think of we will begin sorting and assessing the financial implications of each one. During this step it is also advised that you write a general vision statement for your life. After all, we need a “motive” to get “motivated.” If you are going to create a senior financial plan that you’ll stick to, you need specific retirement goals.

In this article I will be talking about how to get college financial aid & how to make sure/negotiate the amount of aid given. Every undergraduate and graduate college student in the United Stated is eligible to receive financial assistance.

There are two main types of financial aid awarded; merit based and need based.  Merit based aid is usually awarded solely based on a student’s academic or athletic performance and is awarded by the school’s admission board.  Need based aid, on the other hand, is awarded based on a student’s financial need.  Need based aid is determined by the college’s financial aid office as per the EFC (Expected Family Contribution) of the FAFSA (Free Application for Federal Student Aid.

As someone who is currently enrolled in college I can tell you how frustrating the whole process can sometimes be.  The majority of students in my college applied for need based financial aid.  While most of the students I’ve talked to received some form of aid, there were a handful of students that received a considerable amount more.  It’s not always fair that a student from family A receives more than a student from family B, while B is in greater need.  This happens all of the time.  I’m not saying this to discourage you, but to warn you that it does happen in some cases.  It’s frustrating how this works.  It’s crucial that you take the time to learn how both need based and merit based aid works. Hopefully this article will give you some insight into how to get college financial aid.

Getting admitted to your college is the first part (obviously).  Once you have been admitted you will have greater control over the financial aid you receive.  One of the most important things you need to do is fill out the required financial aid applications, as early as possible.  If you do not fill out every required form by the deadline something could go wrong, and you could be in jeopardy of losing your aid. Also, most of the students I’ve spoken with who had received a large portion of aid filled out the forms early

After you fill out and send it the forms wait to receive your financial aid letter.  If the amount is not what you expected than consider stopping by the financial aid department. They will be able to explain how to get college financial aid & how to fill out the fafsa forms.

Explain your financial situation to them, and if you have any form of evidence (check stubs, tax returns, child support) bring it with you. This won’t work it every case but if you do it with persistence I’m sure you can get somewhere.  Of course every college is different.  If you cannot pay for college once admitted make sure you tell them this.

Just in case you were not aware, you can also apply for private grants and scholarships.  If you are either a minority or have a disability you are in a much better position to find a private grant/loan.

One other thing I want to say.  Just because you are in a financial crisis right now, does not mean you won’t get aid.

Yes, you can get a student loan with bad credit.  Most people naturally assume getting a student loan with bad credit is impossible, and too bad for them!  Once you get a loan you’ll be studying at the college/university of your choice in no time!

First I’d just like to point out one thing.  You should never let disadvantages keep you down, financial or otherwise.  You can accomplish anything you want to in life.  Read that last sentence again.

Money should not play a deciding factor in whether you go to college or not.  The U.S. understands this and has instituted many programs to help “would be” college students.  If this is your goal than reach out, squeeze it by the balls, and hold on!  Anything is possible.  People who achieve goals on a consistent basis are usually the ones who hold on to the vision while the majority give up, let go, and fail.  Anyway, back to how to get a student loan with back credit..

I’m assuming you either already have (or plan to) your G.E.D or High School Diploma.  I’m also assuming you know which college you want to attend.  The first thing you need to do is schedule an appointment with someone in either the financial aid department or the admissions office.  It is wise to call ahead of time to see if an appointment is required.  Some colleges will limit your visit to 10-15 minutes without an appointment, while others don’t take walk-ins at all.

During the meeting you will have a chance to ask questions.  The person you speak with should inform you of the kinds of financial aid that are available to students. Either he will refer you to the financial aid department or he will handle it himself.  You will be instructed to fill out several forms (FAFSA) being one of the most important ones.  During that meeting they will evaluate your specific financial needs and recommend a plan of action.  Make sure you bring either a notebook or a pen/paper with you – as there will be many important things you need to do/remember.

Most students usually receive financial aid in the form of grants.  Grants are money given to you by a specific entity (such as the federal government or non profit funds held by organizations) that you DO NOT have to pay back.  Grants usually only cover a small portion of your tuition, but for low costing community colleges they may cover everything.

During your meeting your counselor will probably suggest applying for one of the federal loan programs (such as a Stafford loan).  Government aid is well…backed by the government.  It’s because of this that you can get a student loan with bad credit.  You can have the worst credit on the planet and you can still get a loan.  Credit does not play a factor, on the contrary financial need does play one.

So, go meet with someone in your college now, and don’t delay!

Now, can you get a student loan with bad credit? Now is the time to try and find the answer out for yourself, go apply for some government backed loans!

If you’re reading this than chances are you’ve been hit on the head with an unexpected financial crisis and need money for emergency.  The first reaction the majority of people have to a financial crisis is panic.  Whether you just lost your job, are about to go through foreclosure, car repair – whatever it is – everything is going to be OK. If you are going to deal with this situation the first thing you need to do is get rid of stress, panic, and worry.

Stress and panic effect the brain in a profound way.  If you can’t think clearly than you can’t make the rational decisions that will help you get out of this mess.

Something you will want to do is go over your expenses and come up with a budget.  Prioritize your expenses and cut the expenses you can live with out.  There are certain things that take a higher priority.  The necessities you must place the highest priority on are food, housing (assuming you’re not facing foreclosure), transportation, utilities, etc.

Things like cable t.v., the internet, cell phones are all optional.  They may seem like a high priority, but if you are either facing bankruptcy or foreclosure its a small price to pay to save yourself.  The goal here is to cut every expense you can.

While you’re going over your expenses it would also be wise to go over your possessions and assets.  Is there anything you can either sell or downgrade to for emergency money?  If you drive a new car, consider selling it and buying a nice little second-hand one.  If you own any additional property than sell it!  If you can save yourself and get through this financial crisis without selling property or downgrading than by all means do it.  BUT IF YOU CANT” – you need to consider it.

Money for Emergency – Contingency Planning

Contingency Planning is one of the most interesting but overlooked part of one’s finances. When most people are asked about the amount they have set aside for emergencies, the answer varies from zero to 2 years of household expenditure, both of which are undesirable extremes.

Contingency planning, though it sounds simple, has a lot of complex issues attached to it.

• Managing Risk: To start with, proper risk management requires us to retain only that risk which we cannot pass on to some insurer. Risk can be in the shape of unforeseen events, some of which can be insured and some not. Death or disability (whether permanent or  temporary) of an earning family member is a contingency that can be insured at a nominal cost. Hospitalization of any of the family members is another that can be easily insured from any of the non life insurance providers in the country.
• Possibility of unemployment for short durations: The advent of endless possibilities of employment has also brought uncertainty along with it. The days of job security are over and it is wise to have at least 6 months of critical expenses in liquid form kept aside for a rainy day. This money for emergency can be kept in mutual fund schemes that provide all the desired liquidity and at the same time accrue the growth on a daily basis.
• Money for emergency also has to be kept aside for EMI’s, Insurance premiums and for any medical emergency when a no-cash hospitalization facility is not available and we need cash for treatment, which is reimbursed later by the health insurance company.
• The amount of contingency funds should go up with the number of dependents and go down with the number of working  hands. The joint family system is also a built-in safety and acts as a buffer for contingencies. The need for contingency planning is higher in the nuclear family system.

Once you have a clear mind sit down and look at the big picture.  What caused this financial disaster in the first place?  What options do I have available to me?  Do I have family or friends that can loan me money for the emergency?  Evaluate the financial situation and go over your options.  Try to keep worry at a minimum.  By looking down at the big picture you will gain better insight that will enable you to make better choices.

The key here is to find the root of the problem and to attack.  You need to create a battle plan. You may want to look into finding a not for profit financial counsellor.  I can’t recommend one here, but do your research and find one that is reputable.

So sit down, stop worrying, go over expenses & assets.  Cut & sell everything you don’t need – its worth it if it gets you through this financial crisis. Alternatively, you can try to find a loan at a decent rate, or go to a place that specializes in giving money for emergency – but these kinds of things are what got you in trouble in the first place possibly? Only you can answer that.

 

All it takes is one misstep to fall into a sinkhole of debt. Unfortunately, it may take several moves–some painful–to claw your way out. There are things you can do to begin the long journey back:

Admit your problem

It’s a cliché, but debt counselors say you can’t correct dangerous behavior unless you recognize that it is harmful. An easy way to tell if you’ve got a debt problem is if you don’t have enough money to pay all your monthly expenses plus your minimum credit card obligations.

Other warning signs include not knowing your credit card balances or how many cards you have, or if the number of cards in your wallet is in the double digits. Another signal is if you’ve started screening calls to avoid creditors. According to the book – How to Get Out of Debt, Stay Out of Debt & Live Prosperously, “You have a problem if your debt is causing you any discomfort or trouble.”

Calculate your spending

You need to determine where all of your money is going. So write down exactly what you spend every day–including lattes and the kids’ lunch money–for at least two months.

Set up a repayment account

With the money you save from cutting back on unnecessary expenditures, make automatic monthly deposits into a separate bank account. Do not use this money to pay your monthly bills. Use it to pay more than the minimum required on your credit cards and to fatten your emergency fund.

Prioritize debts

Before using your repayment fund, first sort out your good debt from your bad. The best debt includes tax-deductible, low-interest loans such as a mortgage. A low-interest car loan, though not deductible, is still good because it’s tied to a real asset.

Bad debt includes credit cards, which charge up to 25 percent annual interest or more. Use your repayment fund first to pay off the highest-interest debt. Some experts suggest paying off your smallest balances first, for a sense of progress.

Consider selling an asset

Your house or luxury car may be more than you can afford. Sell the car and choose something more modest. Use the proceeds to reduce debt. Once the cards are paid off, you can begin to save for a new model.

Be your own banker

Many 401(k)’s allow you to borrow against them. You’ll be repaying the loan with after-tax dollars. However, 401(k)’s typically charge loan rates much less than credit cards. And you’ll be paying yourself, rather than a bank. If you can’t afford to repay while making new contributions, don’t do it.

Negotiate with creditors

Be courteous, but suggest that you might transfer your balance to a competitor with a better rate. They may agree to lower your rate; it costs them more to find a new customer than to keep you.

Freeze your credit cards

Put your cards in a block of ice in the freezer. That way, the next time you get an impulse to buy on credit, you’ll have to wait for the cards to thaw, and you may lose your urge to splurge. And beware: Microwaving your cards will destroy the magnetic strip.

“The ability of Wall Street traders to see themselves in their success and their management in their failure would later be echoed, when their firms, which disdained the need for government regulation in good times, insisted on being rescued by government in bad times. Success was an individual achievement; failure was a social problem.”

In his book “The Big Short”, non-fiction author and financial journalist, Michael Lewis, uses the above lines to perfectly describe the situation which started to appear in the year 2007, and by the time it was the September of 2008, had reached a stage which rained doom on the financial markets and the economies around the world. Ten years ago, the world saw a financial crisis, which not only caused the housing and mortgage market to collapse in the US but also was the cause of a worldwide recession.

This disease which crippled the financial system had its roots running deep within the whole political and financial framework of the United States and also in how these two came together to ensure that the only people having their interests fulfilled were the few people in great positions of power.

When the deregulation of the financial sector started in the 1970s, no one could have seen the shape that it could take in the future. The first and the biggest step which took place in the formation of the big housing market bubble was the formation of something that is known in the financial community as ‘Derivatives’. The deregulation, coupled with the availability of new technology led to these creations. Hailed by bankers and its creators as the stabilizing factor of the markets, these actually made the whole scenario even more riskier as now the bankers and investors could bet for and against anything.

Up till the year 1997, Derivatives were a 50 trillion-dollar unregulated market. Any attempts of introducing regulatory measures were thwarted by the former wall street big players who were also now sitting at important positions within the Clinton administration or were nominated to big financial institutions.

By 2001, the financial sector in the US was more powerful and bigger than ever before and all different aspects of it had its few big players. There were Goldman Sachs, Lehmann Brothers, Merrill Lynch etc. as the big investment banks. S&P, Moody’s were the big rating agencies and players like AIG were the big names in the insurance sector. Also by this time, the formation of the biggest financial bubble in history started with something called the Securitization food chain. Here, instead of the traditional home mortgage system of a lender lending out a mortgage to a home buyer who would then pay it back in some agreed time, the lender now sold these mortgages to investment banks.

The investment banks would now combine these expensive mortgages with other forms of loans to create something called a Collateralized Debt Obligation(CDO), which was then sold to investors in the market as safe investments. During this, they would get the help of the rating agencies who would rate these CDOs as the best investment possible, which was ensured by stamping a AAA rating (highest possible rating). Through this whole procedure, everyone sought a means to make quick but huge profits. The lenders now kept offering even more and even riskier loans (subprime loans being the majority as it had the highest interest rate) without making sure than the borrower is even capable of paying it back, the investment banks borrowed huge sums of money in order to purchase these mortgages and sold even more CDOs and the rating agencies kept churning out AAA ratings while being compensated for all of them.

Now that anyone could get a home mortgage, the prices of houses skyrocketed. All these times, the amount of loans taken by the investment banks also skyrocketed. In financial terms, the Leverage Ratio (the ratio of a bank’s borrowed money to its own money) of the various firms were even higher, even going up to 33:1 in some cases. And during all of this the big CEOs and heads of the companies made millions of dollars, money which no government had the power to seize from them. Any attempt of any sort of regulation midway through this bubble were completely shut out and the government authorities stood mum even when many experts and authorities were warning them of the oncoming dangers.

Raghuram Rajan, the then Chief Economist of the International Monetary Fund presented a paper predicting the crisis and how the risks taken for these extreme short term gains were huge. He was ridiculed by the financial elites of the US and was subdued so that the IMF may not interfere in the way of the ongoing cash flow.

During the late 2007 and early 2008, the Securitization food chain imploded, and the lenders now had no more loans to give out as they had no money. The investment banks now had millions of dollars of real estate, CDOs and mortgages which now they could not sell, added to the huge amounts of debt they were in due to the borrowings. So, the crisis had already started, but the government were clueless of the extent of it. Many small investment and lending firms went bankrupt and the government took over them but there was no stopping it.

On September 15, 2008 Lehmann Brothers filed for bankruptcy in the largest filing the US had ever seen, which was when the bubble had burst completely and took the world economy with it. As the Federal government prepared the largest bailout in the history of finance, people lost their homes, jobs and all of their hard earned life savings.

Recession hit the world market as economies such as Singapore, China and some European markets took a great tumble. While AIG was being bailed out due to the huge losses it incurred compensating the insurance it sold for securities against CDOs, its CEO enjoyed saving the earning of a lifetime. Same was with every big gun in the industry, who after using all sorts of resources to influence the government and the academia, were now lying comfortable in their huge money piles whilst the common folk lost everything.

Now, 10 years later, the world has risen quite significantly from the falls of the crisis but the bruises are still blue and black. The Wall Street still has quite control of the financial sector and we can only hope that anywhere around the world, everyone is ready enough to tackle the small stuff so that the big disaster is averted.

About the Author: Ranjib Rudra is an undergraduate student at Manipal Institute of Technology, Manipal Academy of Higher Education, Manipal, India.

I’ve written in the past how we are teaching the kids about finances. They each have their own tithing, spending, and saving jars. But just because they know how to divide their money, doesn’t really mean they understand much about managing money. We try to teach lessons just during everyday occurrences and try to show our children that life is not about money, but money is a part of everyday life. Here are a few ways we are teaching them without really teaching them!

1. I have them check prices in the store. They like to look for sale signs, buy one get one free stickers, and especially the red target clearance stickers. I let them know what’s on the shopping list and they help to find the item and to compare the prices.

2. I talk about prices during shopping outings. If they see an item they like, I mention how much it costs and then compare it to something than can relate to (i.e. you would have to save all the money you get for your birthday to buy this!).

3. Playing board games that involve exchanges of money. Monopoly gives the kids a feel for buying and selling and in managing their money, even if it is only for play.

4. We let them in on our money conversations. The kids know that mom and dad take turns every week paying the bills. They hear our conversations about planned purchases. They see us give money to our Church and to other charity organizations.

I’ve written previously how we enjoy garage sales and hunting for bargains. A crucial part of getting deals is knowing how to haggle. It is a skill worth honing because in essence many financial transactions require some type of negotiation. Over the years, we’ve haggled prices on cars, homes, and medical bills to name just a few. The more skilled you are at haggling, the better you’ll fare at getting price reductions.

I grew up in a family of farmers so I learned the basics early – never pay full price and always haggle. It seems like nearly every purchase was negotiated and bargained for – farm equipment from the local tractor store, milk from an uncle’s dairy farm, vegetables from the farmer’s market. Whatever it was, I enjoyed watching my Dad go through his method for getting the best deal and I apply those now in my own negotiations:

1. First, I determine what I want and set a dollar value of how much I am willing to spend. This is a crucial step because it will come into play later when the negotiations are heating up. Sometimes I give myself a spending range; I aim for the lowest price but will accept a price any where in the range. If you are shopping at a garage sale, know what you are looking for and know how much you are willing to spend. This obviously will require some adjustment if you are just browsing for good deals and are not looking for a specific item. But the basics remain – always strive to pay less.

2. When I find something I want, I do not make a big deal of it. I don’t let my emotions show that I really want this item, even if it is something that I’ve been searching a long time for. A simple question gets the haggling started, “how much do you want for this?” This establishes a basis for the future negotiation of the price. Alternatively, if I am having a garage sale, my answer to this question is “make me an offer.”

3. Make a counter offer. Now the actual numbers are exchanged. Don’t rush this step. Give them time to respond. Become comfortable with silence.

4. If I really am unable to negotiate to an acceptable price, I just say “no thanks” and walk away. Sometimes they will lower their price and sometimes they won’t. This is where step 1 comes into play – I know the actual dollar amount I am willing to spend and if I can’t negotiate to that price, I walk away.

Before I became a frugal shopper, I didn’t even consider buying store brands. I stuck with the name brands – the ones I recognized and had always used. However, little by little I ventured into trying store brands and to my surprise I found that many were of the same quality as the more expensive brand names! Many times the store brands are packaged by the same processing plants where the name brands are produced but store brands are sold at a lesser cost because fancy packaging is not used. I found the best way to approach store brands is to try them little by little. Some products you will be very happy with and others you won’t like as much. Here are some store brands that work in our family:

1. Contact solution. We used to pay top dollar for the brand name contact solution. We’ve since switched to Target’s brand and are very happy with the product.

2. Hand lotion. We have several allergies in the family so we need to buy the hypoallergenic types of lotions. We’ve found that Target’s brand of hypoallergenic lotion works for us – and at a substantial discount too!

3. Pain relievers. Either Target or Walmart store brands of pain relievers work just as well as the name brands.

4. Oatmeal. I’ve found that store brand oatmeal tastes exactly the same as brand name and works just as well when baking oatmeal cookies!

5. Liquid hand soap. The large refills of the store brand soaps are a big money saver and work just as well as the name brand bottles.

6. Dental Floss. Target’s store brand of dental floss is comparable in quality to the higher priced name brands.

7. Saltine Crackers. We much prefer our store’s brand of crackers to the name brands.