Finance Errors – Counting on Social Security

While many people believe that a plush and easy retirement awaits them in the future because they are paying for social security and their retirement now, you should not be so certain about this. While social security is a viable way that many of the elderly of the past have had a decent retirement, it is far from the only way, and more uncertain than other methods. This becomes even more prevalent when you consider that soon the trust fund developed has been scheduled to run out.

John Labunski

John Labunski

That is correct. It is believed by some financial experts that by the year 2037, the social security common wealth fund will dry up before a substantial amount of the workforce even comes close to retiring. This means that when the time comes to retire, the average payout will only be about three-quarters of what it once was, as people will only be getting the same amount that they were putting in. This means your financial future now more than ever is in your own hands.

If you rely on social security to provide you with a comfortable means for retirement, you may be setting yourself up for disappointment. This however, is no reason to panic. In fact, many people do not need to live off of social security to have a successful retirement. Social security has often just been a base living rate anyway, and those who take proper steps now can plan for a more financially sound retirement.

John Labunski is a finance expert that encourages people to come up with their own retirement strategies and budgets.


Improving Finance – Debt Control

In finance, many people hear the word debt and start running for the hills. While debt isn’t always encouraged, it can actually be a good thing from time to time. That is because most debt is made as an investment of sorts.

John Labunski

John Labunski

The most important thing to do to improve your financial situation is to understand and be able to control the amount of debt you have. Too much debt and too little can both be detrimental to your financial situation. This is because with too little debt, you aren’t making any plays or taking any risks to improve.

Many debts come from things like student loans, which help you get a good education and in turn a good career. Debts can also be accumulated by receiving loans to open a business or buy a vehicle. These are necessary expenses that will help improve your financial situation in the long run.

The trouble with debt and finance is not that you should avoid debt all together, but you should find a good medium. This medium should have just enough risk to have an average growth rate and reward, without you worrying about being buried in debt. A common mistake people make in financing is overinvesting. Spending five or six years in college to earn a four year degree for instance. Things like this can make it much harder in the long run to dig yourself out of your hill of debt. That is why you need to find balance.

John Labunski is a finance expert that encourages people to find a happy medium of debt that allows career growth.

Saving Money – Avoid Spending Traps

Finance is one of the most difficult fields for the average person to master, especially when it comes to their own finances. This is because often we are not good judges of our own situation, as obvious bias can exist. The majority of people are in a state of financial ruin, which seems ridiculous because the world is populated by generally smart people. Well the problem is that there are equally intelligent people who are trying to take your money while you are trying to save it. This happens all of the time in the form of marketing, advertising, and special promotions, all designed by an elite team to part you with your hard-earned cash. It is these kinds of spending traps that encourage you to spend money with the illusion of saving it.

John Labunski

John Labunski

One great example of a classing spending trap is the rewards incentive that is offered by most credit card companies. Remember that these companies have one goal, to make as much money as possible, something that they can’t achieve by giving it away. The same thing applies to you and your finances. While rewards for spending sounds like a good idea, because you are getting money to spend money, you are always spending far more money than you are saving. Reward cards also usually carry hidden costs like a higher interest rate. So while it may seem like you are saving money, in reality you are actually losing money in a cleverly devised spending trap.

John Labunski is a finance expert who notes that you need to be wary about spending traps and marketing schemes.

Saving Money – Housing

For many, finance can be a very tricky field. In fact, most people end up in debt, or living above their means. While it is ideal to save a minimum of 25% of your income, most people are incapable of doing better than 10%. Now remember that this is a percentage, meaning that it has nothing to do with how much you make, strictly with how good you are at budgeting and saving. Now while it can be difficult to master your finances, it is far from impossible. Remember a good common finance rule, that you ideally should save one dollar for every three that you earn. One of the most common things that prevent people from maintaining this ratio, is that they pay far too much for their housing costs.

John Labunski

John Labunski

Traditionally, most financial advisors and experts usually say the rule of thumb for housing costs is to spend only a third of your income on it. For a lot of people however, this is far too much money, especially when you consider things like car and student loan payments, child support, and business expenses. While each person’s individual budget and housing needs differ, it is more realistic that you should only be spending about 25% of your income on housing expenses if possible.

If you are having trouble spending less than 30% plus of your income on housing, start looking for ways to save. This could include cutting down on electricity costs, being more conservative with food, or simply seeking more affordable housing.

John Labunski is a finance expert who often comments how housing costs can be budget killers.