Nov 21 2017

Do you save or do you borrow?

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This blog uses affiliate links and maintains financial relationships with various partners. This is a guest post.


When it comes to personal finance, you can be categorized in one of two categories: Saving or borrowing. Which category do you think you fall into? Do you tend to save money when you can? Are you saving for retirement? Maybe you prefer using your credit card to cash? Living off credit implies you’re borrowing against any future earnings. Unless you’re paying off your credit card in full each month, you’re living off money you don’t have. Many studies have shown that most people tend to fall into the borrowing category and a large percentage of these people are struggling to make the monthly payments on time (or at all). Saving requires a paradigm shift. Here are a few things to consider:


How do you start?


Now, when it comes to saving, there is only one rule: Never spend more than you earn, which isn’t always as easy or straightforward as it sounds. It can be hard, but the most important factor is changing your view on personal finances. How much you start with doesn’t matter, you just need to start. You need to develop the habit of saving so set a budget each month and stick to it.


Once you’ve started saving, it is time to consider investments. Many people believe that investments are for the wealthy, but if you’re saving comfortably then it may be time to think about investments. Over time, investments can help you increase your earnings. If you come into some extra income (like a bonus or an increase) then consider using a portion of it to invest in a unit trust (a mutual fund) instead of improving your standard of living. You can even go a step further by committing to investing monthly via a debit order. Using this option allows you to set an annual increase, which gradually increases your contribution.


Start as early as possible, but really it is never too late. Any delay now means greater sacrifices down the line so it really does help to start early.


Five tips to shift from borrowing to saving:


Here are a few tips to help you with that paradigm shift. Changing a mindset can be very hard, but following these tips can help make it a little easier:


  • Start early! Compound interest can net you huge returns, but it requires time to work. To benefit you need to start as early as possible.
  • Start reducing/eliminating debt and don’t create any new debt.
  • Save before you spend.
  • If you can’t pay for it with cash (or debit card) then don’t buy it.
  • Fix your annual contribution increase and avoid negotiating with yourself.
  • Sign up to a regular financial newsletter to keep updated with the latest investment news and trends.


Sacrifice is never easy and for many it will feel like a sacrifice. It will be hard, but this commitment leads to great future returns. Make sure you are well informed to increase your chances of success. Define your goals and think about the resources and time you need to achieve them. If you feel overwhelmed then consider consulting a good independent financial advisor to help you make sense of it all.


Posted under Personal Finance | Comments Off on Do you save or do you borrow?
Oct 20 2017

National Save for Retirement Week

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Carrying forward a post I stuck on Facebook:


Someone somewhere declared this “National Save for Retirement Week.” Ok, it’s as good of a time as any to evaluate your progress.

Vanguard has some helpful ideas here:

In my mind, there are 4 main factors to consider when saving for retirement:

1. How much money you’re investing. (Employer-sponsored plans, including any potential match; IRAs, regular taxable investment accounts when the first two options have been exhausted).

2. Which investment options you’ve selected. Each fund has a purpose and is designed to meet particular goals. Make sure they are YOUR goals and are appropriate for your situation.

3. Asset allocation. Are you dumping it all into one target-date fund where the asset allocation happens automatically? Or are you handling the asset allocation and rebalancing yourself?

4. FEES. Do not overlook fees. High fees will eat into your returns, costing thousands over time. Some employer-sponsored plans might have a higher fee, say 1-6% or more.

There might or might not be much you can do there, but pay attention. You can control the fees associated with your IRA, as you’re the one in charge. My target-date retirement fund at Vanguard has a .16% expense ratio, for example. Some Admiral funds at Vanguard have even lower fees, .04% is an example — VTSAX Vanguard Total Stock Market Index Fund Admiral Shares. Nice.

Here is an investment fee comparison calculator so you can see the difference. I like this article on NerdWallet showcasing the impact in an example portfolio.

It can feel overwhelming, but this is your life. This is your money. You can handle this.

Posted under Personal Finance | Comments Off on National Save for Retirement Week

Hey! I'm Kacie, wife and mother of 3. I write about my family's finance: how we save money, improve our spending, and plan for the future.

I hope I can inspire and encourage you to improve your situation. See disclosure.

I'm adopting a much slower-paced posting schedule, and treating this as a hobby blog now.

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