save money for retirement

How to Save Money for Retirement

Retirement.

Something that we as a nation have lost track of. Our nation has become obsessed with instant gratification. How much do you need in your nest egg in order to retire comfortably? For everyone, it is not equal. Some people enjoy the simple life, and others like to spend lavishly. Whatever you want to do, later on, one thing is true: Money gives you financial freedom in order to do whatever you like. Here are some tips on how to save the money you need in order to make the most out of your golden years.

Save 10% of your income

Whatever you make, whatever your income bracket, it’s not too little to say that you can’t save 10% of it. This way, you will not feel the urge to touch it, and after your working years have passed, you can look back and see how much it has grown. Buy bonds with it or put it in a Money Market fund. Even if you don’t invest it, the money saved isn’t going anywhere, although investing it is probably the best idea in today’s society.

Also, if you feel that you can muster up the urge to live like a broke college student for a couple of more years, you can save 20%, even 25% of your income. Challenge yourself, but don’t suffocate yourself.

Try not to use Credit Cards

We as humans like to take the easy way out. This applies to credit cards. The idea that you are just swiping a plastic card for a couple of hundred dollars doesn’t seem that bad, but when the end of the month rolls around, you have a huge bill sitting in your mailbox and all you can do is pay the minimum payment. Things like this snowball EXTREMELY fast.

With credit card companies charging up to 20% interest on their money that you spend, it is never a good idea to use plastic unless you are buying something large like a refrigerator, or if you absolutely must. Pay everything with either cash or your checking account. This makes sure that you are in the clear, and you don’t have debts you “may or may not” be able to pay later on.

401(k), 401(yay)

Remember to contribute to your 401(k). Some companies match your deposits in your 401(k), which is basically free money. If every time you earned $10 someone gave you another $10, how is that an offer you can refuse? Although you will not be able to touch that money (you can, but remember the penalty is HEFTY), if your employer matches the amounts you put in, you are well on your way to retiring comfortably!

Put your raise to good use, not buy a new car

Besides, what’s wrong with your current car? Too often families try to upgrade their lifestyles all too quickly. A layoff or recession happens, and they somehow find their lives turned upside down as they sign a foreclosure and drown in debt. Don’t push your wallet too hard, because it will burst. If you get a raise at work, put that extra income toward a fund of some kind, whether it be a college for the kids or your own retirement. You’ve been living really well up until this point without that extra income, so why do you need it now?

IRA

Put your money into an IRA (Individual Retirement Account). This money like a 401(k), incurs penalties for withdrawing early, so do not touch it. Instead remind yourself that this money saved is money that will grow exponentially, money that could be put to good use as a necessity later. Another two words: Tax advantages. Money contributed to retirement is qualified for tax advantages by the government. Now, where are you going to see that?

Start Early

It’s no secret why compounding interest is called the “Eighth wonder of the world.” The money grows on itself at an alarming rate. It’s a bit like a turbocharged automobile. It is slow to startup in the beginning, but near the end the progress is amazing. Compound Interest takes your principle and earns you a percentage interest based on that principle. If you successively use the previous period’s principle added to the interest you earned in your previous period, that is considered your new principle. It grows based on time. That is why starting early is so important. Make time work for you, not against you.

One thing to remember: The average American spends about 18 years in retirement. If you want your retirement to be filled with joy; If you want your retirement to be filled with smiles with your family, never having to worry about money, then learn to put some of your money away and make it work for you. Nowadays, many people are working until they are 70+ years old. That’s a horrible way to live, but hey, that’s the choice they made in their youth. Be smart about how you use your income.


How Can You Apply For A Start-Up Loan?

How Can You Apply For A Start-Up Loan?

It is quite understandable that in order to start any new scale small business, capital plays a major role. This can be solved by taking loans from any financial institutions such as credit unions. So find out how you can apply for a start-up loan for your new business.

Be Aware Of The Reason And Amount Of The Loan

It is quite obvious that any small business owner will be aware of the reason for which he needs the loan along with the loan amount that is required. If it is a start-up business then it is not true.

Start-up owners might be in the procedure to determine the number of funds needed and why it is needed.

Whenever there is a loan taken from any bank by any business owner, it has become a debt to the business and to the owner as well.

So in order to reduce the risk factor, there should be proper research about the reason for taking a loan by preparing financial statements which actually helps to understand the requisite.

Pay A Visit To The Local SCORE As Well As The SBDC Offices

A start-up business owner always wishes to gain some advice as well as assistance from expert executives.

In order to open a start-up, the visibility of the idea and executing the same is the biggest challenge and that part is one of the crucial among all, with a help of an experienced person it can be reduced as they understand the requirements better than a newbie.

There are several organizations such as SCORE, a non-profit entity that has a volunteer group of retired business executives apart from that there are Small Business Development Centre which is an integral part of Small Business Administration that can help small business owners with the process of Small business loan application.

 Check Your Credit History And Score

When you are trying to take a big step before that you need to learn how to walk and that’s where your credit score comes into the picture. Whenever there’s a startup your credit history turned into your business history. So before you take a step forward it is always advisable to look into credit reports. Something around 700 or more than that would be great and it will definitely increase the chance of getting a loan with a very hazard.

 

Review Your Options For Borrowing

Large banks are mostly deal with bigger clients who got a brand name, a proper set up and Goodwill but for a startup above mentioned things are yet to be achieved hence it is always preferable to approach the commercial banks or a credit union and even if you are member of the local credit union, you can directly connect the loan officer and convince him with the business idea you have.

Even they turn you down there are several microfinance loans that can create a loan to the startup. You should opt for every possible option.

Create Your Business Plan

Whenever you are asking for lending money from any financial institutions, the reason should be as strong as they can’t put it down and it has to be crystal clear.

A good business plan is necessary because the competition in the market is very high so your idea has to be unique.

Before you get into this you must secure that your business plan has components such as financial statement, the value of the assets which are going to be used to secure the loan along with that a thorough market analysis of the market your business will serve.

Make A Presentation and Book the Appointment

No matter how good you are at what you are going to do, if you can’t persuade the loan officer then all the efforts will go into the vein.

So in order to avoid such incidents, you need to prepare a proper business plan and a presentation that will force the person to look at it again and will also help him in understanding your basic need for this start-up loan.

There are several things such as financial statements, charts, graphs, etc. but the part which actually plays a pivotal role in this is the executive summary.

Loan officers hold a notion about this summary, if it’s distinctive then will definitely put some interest in it. Make an appointment with the loan officer and ask them to provide you some time so that you can explain the idea to them properly.

The presentation needs to be compendious and methodical.

So if you are planning to start a new business, then you must be aware of start-up loans. If you are going to consider a start-up loan for financing your new business, then collect some knowledge of how you can apply for it. Follow the above-mentioned ways to get one.


Why Do Banks Deny Start-up Loans?

It is challenging for a new venture to get approved of a start-up loan from a bank or private loan provider for a business start-up.

New business loans are very risky loans that any bank or lender might face. So anyone will be not much sure of start-up loans.

Why Is Business Start-Up Risky?

If you wish to know why new business ventures or start-ups are risky for lenders, then have a look here. Lenders always expect borrowers to have:

  • Capital: Business assets that are utilized for creating products and services and that which can be changed into cash for making payments on the loans for business. Any new business usually will be having a few business assets.
  • Collateral: Cash for contributing to the new business. Any new business owner will be having very little collateral until he can make use of personal assets or there is a co-signer with some assets for pledging.
  • Capacity: A proper track record for showing that the business has the potential of generating sufficient money for repaying the loan.
  • Character: It is a good credit rating. A business owner with a good credit rating such as a business credit or a personal credit does not mean that he will be able to get the approval of a business loan. But if he has a poor rating it will be quickly turned away.

Reasons Why Banks Refuse Start-Up Loans

  • Absence Of Experience: Banks are seen to deny start-up loans to a person who has not a minimum working experience of 1 year in the profession.
  • Absence Of Management: Lenders do not feel comfortable with a new business start-up that has no powerful and expert management team for adding their assistance to let the business grow.
  • Absence Of Customer-Base: It is one of those circumstances, you will not get a loan approval until you have any customer, but you can also not start the business and get the customers without getting a loan. If you can make them believe that you are having some potential customer backup it can create a good impression on any lender.

 

For instance, mentioned are some typical replies from banks to a young man who was looking out for a start-loan to begin his professional practice.

Banks will simply say that they do not offer any loans to any start-ups. You can move to other banks. But it will take time for finding the perfect one.

A bank will be giving you a certain amount ($60,000) that is the limit for SBA express start-up loans.

So before talking to a bank, contact the SBA. Learn about their criteria. Few banks are ready to trade in with the additional paperwork as well as the hassle of the SBA loans. You can contact SBA and get the tentative approval for reducing the objections that the bank put.

 

Does Personal Credit Have Any Impact On Start-Up Loan’s Approval?

A new business will never have a business credit of its own. So the bank needs to have a look at the credit of that person who owns the start-up. Banks are seen to frequently say no to start-up loan appeal as the borrower’s personal credit includes problems. For instance:

  • The problem can be as small as a negative rating on a borrower’s credit report. But it will be all that the bank will be considering and denying your start-up loan.
  • A low credit rating will affect your ability of obtaining a start-up loan. Nowadays, any credit score below 800 will be questioned. So you must know your credit score and work for raising it.

Can You Get Your Start-Up Loan Sanctioned?

A great way of getting a start-up loan sanctioned is by crafting the plan of your business carefully for answering each and every question that a loan provider may ask along with those objections that can get raised.

  • Show may you plan for contributing capital to your business. What will you be contributing to your business on your own? What are you already having?
  • Show from where you will be bringing your collateral as well as credit report of you along with the co-signer if present.
  • Show the management that guides you, the advisors as well as executives you need to guide your business fast to profitability.
  • Add a spreadsheet to show when the business will be having a great cash flow and be sure that you will spending less than you will be bringing in.
  • Show the experience you have with any similar business or that you have expert management team beside you.

 

So if you are thinking of starting up a new business, look out for a loan for funding. Start-ups loans are of great help if its application is approved. Apply for funds from a private loan provider and get the loan approved for your start-up.


Personal Finance Tips For Young Adults

Stop living paycheck to paycheck and take control of your finances. Young people need all the financial help they can get to succeed in the modern world. It is incredibly important that you get all the good advice.

Spending less than you earn every month, keep the money in your wallet to a minimum. Even as you start saving, another first is to start educating yourself about every aspect of personal finance.


Carolyn Rhea

Hi,I am Carolyn Rhea, author of NIME 2016. Money management tips can help you and your family feel more financially secure.