A Diamond in the Rough
As we approach March, people have had time to reassess their New Year’s resolutions. They have an idea if they are meeting goals or need to revise them. Those that smartly budgeted may have some extra income and want to spend that. However, purchasing products when they are not a necessity, often results in spending unnecessary money.
Resist Buying New Electronics
People are enticed by new products, especially when it comes to electronics. However, you may be doing yourself a disservice if you buy the latest model of anything. While new releases, like an iPhone, often offer product enhancements, it is likely an unnecessary purchase. Before purchasing a new model, think wisely if you can make do with an older version. Additionally, keep in mind that manufacturers often reduce the cost of older products when they are getting ready to lease a new one. That money saved may go toward paying for emergencies or future money trends.
A Car is Not an Investment
Just like asking yourself if you need the latest smartphone, think about if you need a new car. A vehicle is not an investment because the value depreciates once you have driven off the lot. Each year, the value continues to go down. For some, a car is a necessity, especially in cities that do not offer large transit systems. Therefore, a car should be thought of in that manner. Alternatives include buying a used car, leasing one or paying cash upfront. Additionally, gas prices fluctuate throughout the year. This is a factor to consider when purchasing a vehicle. Any money saved here may go to an emergency fund or investments.
Do Not Count on Social Security to Offset Spending Habits
No matter your age, it a good idea to keep track of spendable income and calendar times to review your finances to ensure you are meeting goals. While this step is important for everyone, the large population of baby boomers may see the more immediate need as they have hit or soon will reach the age of 67. This is the age that the Social Security Administration (SSA) has set for people seeking full benefits.
Younger generations should also monitor the potential to receive social security income. By 2033, the Social Security Administration expects to have a shortage of funds. Therefore, do not see social security benefits as a guaranteed way to provide in the future or offset spending habits.
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