You've found a job, started a family and are living comfortably from month to month. What's next? If saving money comes to mind, you're on the right track.
"Time is of the essence," says Certified Financial Planner Ted Snow, founding principal of Snow Financial Group in Addison, Texas. "The earlier you start, the less you'll have to take out of your pocket to save, and the more opportunities you'll have in terms of compounding and doubling your money."
Ready to get started? Follow these six strategies to incorporate long-term savings into your budget.
Know what you wantThe most critical part of a long-term savings plan is to understand what you're truly saving for, says Certified Financial Planner Jude Boudreaux, director of financial planning at Bellingrath Wealth Management in New Orleans.
Do you want to buy a beach home in Florida? Send your offspring to college? Save for a sumptuous retirement?
"The clearer the picture of the long-term goal, the easier it is to make daily decisions that truly affect your success," he says.
Get into the right mindsetOnce you know what you want, it's time to set aside money for it. But shifting funds into a long-term account can be tough, especially if it means investing money you regularly spend at the coffee shop, drugstore or restaurants.
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If setting aside money normally spent on entertainment leaves you feeling deprived, try changing your attitude.
"By saying 'no' right now, you're giving yourself a 'yes' toward something bigger and better in the future," says Boudreaux.
An attitudinal adjustment may be more easily achieved for short-term goals. Case in point: Say you want to take a trip every year that will cost $5,000. Put aside $100 a week and you can make the trip a reality. This might mean eating at a restaurant one or two fewer times a week. By saying "no" to eating out, however, you're saying "yes" to a big annual trip. See the difference?
The same mindset goes for your long-term goals.
Use Bankrate's simple savings calculator to see your savings grow.
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Understand the power of compound interestSetting aside money early on and watching it grow can be a powerful motivator.
To envision the potential of compound interest, consider the rule of 72, suggests Snow. Take the number 72 and divide it by the projected rate of return you expect to receive each year from an investment. This will reveal the estimated number of years it will take for that amount of money to double.
For example, say you invest $8,000 in a mutual fund with an average return rate of 8 percent. It will take approximately 9 years (72 divided by 8) for that amount to turn into $16,000. The earlier you start, the more time your investments have to multiply.
Thursday, March 11, 2010
Wednesday, January 13, 2010
Renters' market: Prices fall 3%, vacancies up 8%
NEW YORK (CNNMoney.com) -- There haven't been this many vacant rental apartments for at least 30 years, according to a new industry report.
The national apartment vacancy rate rose to 8% in the last three months of 2009, according to Reis Inc., a commercial real estate information provider. That is the highest level Reis has ever reported.
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The vacancy rate barely inched up from the third quarter -- just 7.9% to 8% -- but it rose significantly from a year ago, when it stood at 6.7%. Even more dramatic, vacancies spiked 45% from the third quarter of 2006, when they had bottomed out at 5.5%.
The main culprit is, of course, the recession, according to Reis economist Ryan Severino. Not only do people lose their jobs during downturns, many others are afraid of being laid off. And they all feel pressure to reduce their housing costs.
"Household formation rates slow down during recessions," said Severino. "They may move in with their families or rent larger apartments and partner up with friends. They partner with others much more then they do during more prosperous times."
And that, of course, frees up many rental units.
Vacancies up, rents down
All those extra apartments gave renters more negotiating room with landlords. The national average effective rent -- what landlords actually charge, not what they ask for -- fell 3% from the end of 2008 and 0.7% from the previous quarter.
Occupancy rates did climb during the quarter, with nearly 10,000 more apartments being rented than had been three months earlier, according to the report. But vacancy rates still managed to climb because 28,000 newly constructed units hit the market. A total of 120,000 new apartments came online during 2009, the most since 2003.
It's unclear why so many units were added during a time of deep economic turmoil, but some of the big rental buildings were undoubtedly planned and under development before the recession hit, according to Severino. And it would have made no economic sense to withhold them from the market. Some rent is better than no rent.
Other apartments, however, could have been planned as condominium developments and only converted to rentals after the condo market crashed. These homes are what economists like to call fungible, easily converted from one commodity into another.
The number of rental units that started out as condos is "very hard to pin down," said Severino, but there were undoubtedly some, especially in really hard hit condo markets such as southern Florida.
The national apartment vacancy rate rose to 8% in the last three months of 2009, according to Reis Inc., a commercial real estate information provider. That is the highest level Reis has ever reported.
Facebook Digg Twitter Buzz Up! Email Print Comment on this story
The vacancy rate barely inched up from the third quarter -- just 7.9% to 8% -- but it rose significantly from a year ago, when it stood at 6.7%. Even more dramatic, vacancies spiked 45% from the third quarter of 2006, when they had bottomed out at 5.5%.
The main culprit is, of course, the recession, according to Reis economist Ryan Severino. Not only do people lose their jobs during downturns, many others are afraid of being laid off. And they all feel pressure to reduce their housing costs.
"Household formation rates slow down during recessions," said Severino. "They may move in with their families or rent larger apartments and partner up with friends. They partner with others much more then they do during more prosperous times."
And that, of course, frees up many rental units.
Vacancies up, rents down
All those extra apartments gave renters more negotiating room with landlords. The national average effective rent -- what landlords actually charge, not what they ask for -- fell 3% from the end of 2008 and 0.7% from the previous quarter.
Occupancy rates did climb during the quarter, with nearly 10,000 more apartments being rented than had been three months earlier, according to the report. But vacancy rates still managed to climb because 28,000 newly constructed units hit the market. A total of 120,000 new apartments came online during 2009, the most since 2003.
It's unclear why so many units were added during a time of deep economic turmoil, but some of the big rental buildings were undoubtedly planned and under development before the recession hit, according to Severino. And it would have made no economic sense to withhold them from the market. Some rent is better than no rent.
Other apartments, however, could have been planned as condominium developments and only converted to rentals after the condo market crashed. These homes are what economists like to call fungible, easily converted from one commodity into another.
The number of rental units that started out as condos is "very hard to pin down," said Severino, but there were undoubtedly some, especially in really hard hit condo markets such as southern Florida.
Monday, November 30, 2009
Less smoking helps push cancer deaths down in Europe
Cancer killed fewer Europeans in the first half of this decade, largely thanks to a decrease in smoking. A new study finds that while death rates from cancer varied between men and women and among countries, they generally improved in all major European nations.
The study, published Monday in the Annals of Oncology, found that in the 27 European Union countries, overall cancer mortality declined 9% in men and 8% in women in the period 2000-2004 compared with 1990-1994. That translates to the cancer death rate falling from 185.2 deaths per 100,000 men to 168, and from 104.8 to 96.9 for women. Middle-age people showed the largest drop.
The study, published Monday in the Annals of Oncology, found that in the 27 European Union countries, overall cancer mortality declined 9% in men and 8% in women in the period 2000-2004 compared with 1990-1994. That translates to the cancer death rate falling from 185.2 deaths per 100,000 men to 168, and from 104.8 to 96.9 for women. Middle-age people showed the largest drop.
Monday, November 23, 2009
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