Personal finance expert Lynette Khalfani-Cox, a.k.a. The Money Coach, says living within your means is the best thing you can do to be financially secure. But if it's so simple, why is it so hard?
For one thing, the economy isn't helping. Downsizing-the first of what Khalfani-Cox calls names as the 5 Ds-is all too common these days...especially if you're over 50. Divorce, Disease, Disability and Death of a breadwinner also can be devastating.
Some things are out of our control, acknowledged Khalfani-Cox during her talk at AARP's Life@50+ National Event & Expo. She says it's best to focus on things within our control. By taking just one step in the right direction we can begin to build a better financial future.
Are you ready to make today the first day of the rest of your financial life? These tips could help.
- In debt? Make a list of your creditors, and pick up the phone. Explain your circumstances and ask for a lower interest rate. The Money Coach says you have nothing to lose; 74% percent of the time, according to one survey, they'll say yes. While you're at it, ask for a different payment date if that would help. You won't know until you ask.
- Currently employed? First, count your blessings. If you got a tax refund last year, give yourself an instant raise by adjusting your tax withholdings so you get more in each paycheck.
- Have your affairs in order? Have an updated will, adequate insurance, and an advanced medical directive? "If you have time to watch Dancing with the Stars, you have time to do something about these things," says Khalfani-Cox.
- Ready to get serious about 'what if?' Do you have enough in savings for a $1,000 or so expense like a leaky roof? How about three months worth of living expenses? If not, put a percentage of your money into savings for a rainy day fund, and then begin an emergency fund.
Clearly, times are tough and people are hurting financially. Khalfani-Cox says that's even more reason to get our finances in order. While we're at it, she says we also need to have a little fun. (Whew...fun!) Her advice: develop a budget you can live with and set aside a little something so you can do what you enjoy. "A budget shouldn't feel like a straitjacket," she says.
For specific tips and tools to reduce debt and increase savings, check out the resources at www.aarp.org/money. Follow @AARPMoney on Twitter for more money and work session highlights from Life@50+.
Photo by Cat Eden via Flickr Creative Commons