Do you sometimes wonder how you are going to make ends meet when the time comes to retire? Have you given up hope of ever retiring? Do you worry whether there will any money available for you upon your retirement from social security, medicare and/or medicaid?

These are very important questions. Unfortunately, there are many people who don’t even get to the point of asking these questions until they are on the verge of retiring. Studies show that 61% of all workers haven’t even tried to calculate how much savings they will need in order to live comfortably in retirement. The key to financial health is retirement planning. The earlier you begin to plan and take action, the better off you will be and the less you have to set aside to insure healthy finances in retirement.

Let me try to give you some tips. The first step to develop a solid financial plan is to set aside enough money into a savings account to cover 3-6 months’ worth of income in case of unexpected emergencies. This “emergency” fund will ensure that you have money to cover unexpected expenses while still allowing you to continue to build your financial future. Once you calculate how much you need to set aside (remember, 3-6 months’ worth of take-home income), you should establish a goal for saving toward this emergency fund. Pay your “emergency” fund faithfully just like a utility bill or rent until you have reached your goal. This does not mean you need to save $300-400 per month, but save something every month, even if it is $25 or $50 per month.

The following are some other tips which should help you reach your retirement goals as well as develop healthy spending and saving habits.

1) Utilize any retirement savings plans offered by your employer (even if the employer won’t match your contributions). These contributions are “pre-tax.” This means that putting away $50 out of your paycheck does not mean your net pay will be $50 less. In fact, it might only be $35-40 less. If your employer does not offer any type of retirement savings plans (like 401(k), 403(b), or 457 plans), you should still put money away into an IRA. Consider signing up for automatic transfers from your paycheck into an IRA.

As your income increases over time, you should increase the amount or percentage of your income you are putting into your IRA or retirement plans. If you adopt this plan your savings and income have the potential to grow together over the years and outpace inflation.

2) Set spending limits and stick to your limits. It is far too easy to “charge” it when you don’t have the money in your pocket to afford a particular purchase. You have to resist that temptation! Take time to calculate a reasonable “spending allowance” for a week. At the beginning of the week, withdraw your “allowance” and limit your spending to your allowance. This will help you set priorities and budget your money.

3) Flexible spending accounts (FSAs). Many employers offer flexible spending accounts into which you can deposit pre-tax earnings for medical and dependent-care expenses. These funds can help parents save tax dollars when paying for childcare or medical expenses. Again, like in the 401(k) scenario, you can put $50 into the account and it doesn’t cost you $50 off your paycheck. The only potential pitfall is that you must spend the money by the end of the year or you lose it. You have to keep receipts to show you spent the money on the required childcare or medical expense to get the money. Therefore, make sure you are only saving what you know you spend.

4) Bill yourself. Whenever you pay off a major expense, like a credit card or a car, consider continuing those payments by making deposits into your own savings account. Eliminating your debt increases your net worth and by continuing to build your savings you can increase your assets and eliminate your reliance on credit. For example, if you are paying $400 per month for a car on top of your living expenses. Once your car is paid off, instead of spending the $400, put it into a bank account. This way you can begin saving for your next car and can have a bigger down payment and better financing terms.

5) Utilize piggy banks for all that loose change. Over the course of a year, loose change can add up! Pay your expenses with dollar bills and deposit all your change at the end of the day into a piggy bank. If you are able, consider depositing any $1 or $5 bills you have at the end of the day. If this is done faithfully throughout the year, you will likely have more than a thousand dollars in your piggy bank at the end of the year!

6) Allocate lump sum cash payments into three parts. When you receive your tax refund, inheritance, or bonuses, break up these things into three parts. Set aside 1/3 of the money for long-term savings goals (retirement), set aside another 1/3 for short-term savings goals (your next car purchase, furniture purchase, etc..) and the last 1/3 you can use to reward yourself! This way you can still splurge, but you can also have the satisfaction of continuing to meet your savings goals.

7) Have fun! Make a list of fun and inexpensive things you like to do. When you feel the urge to spend money, do the fun and inexpensive things you’ve put on your list instead. Go to a museum, take a drive through the countryside, go for a hike, go to the zoo, etc… Think about your list and stick to it whenever you feel like going on a shopping spree for useless items. If you can successfully eliminate spending money on unnecessary items, you will be much closer to attaining your savings goals.

I know what you’re thinking. All of this is nice, but I can’t afford it. Consider this. The results of the Retirement Confidence Survey indicates that those people who thought about their retirement and made a plan changed their financial habits. Saving a mere $20 per week will amount to $1,040 by the end of the year and with only a 5% annual return will result to well over $50,000 over 25 years!

Saving doesn’t have to be difficult, but it does require you to think about these issues, make a plan, and follow-through on the plan. With a little bit of time and effort, your goals will become a reality.

Payday lenders offer tempting short-term loans for a fee, usually due on a payday. They can also be called: cash advances, check advances, check advance loans, post-dated check loans or deferred-deposit check loans. The premise is simple; lenders offer cash loans to working individuals who secure their loan with a post-dated check including a fee for the loan. On payday, the borrower can either pay the full loan back or roll it over into another loan for an additional fee.

At first glance, payday loans may seem appealing, especially around this time of year when families often need additional money for the holiday season. While payday loans may seem like the answer to a holiday budget crunch, they usually end up causing even more financial distress, and are often the beginning of a vicious and very expensive cycle that can prove almost impossible to escape. Many borrowers don’t foresee how fast interest and fees on these loans add up. Most people considering a payday loan are on a tight budget and are already living paycheck-to-paycheck and cannot afford to pay the entire loan back out of their next check. Payday lenders anticipate this and usually offer the borrower a chance to roll the loan over for another two weeks until the next payday, for a fee of course. The cycle of rollovers can quickly build up, especially if individuals start borrowing from several different payday lenders, and can lead to an endless cycle of debt. When someone is living from paycheck-topaycheck, a payday loan may force them into debt consolidation counseling or even require them to seek good bankruptcy lawyers.

The fees and interest rates on payday loans can be astronomical. It is common to see interest rates between 300% - 1500%. Compare this to typical interest rates on cash advances on a credit card, usually between 20% - 35%. Lenders are required to provide individuals with a full disclosure of the APR on the loan and must also provide a written loan agreement. It is very important to carefully read the loan agreement and understand what the interest rate on the loans will be. If you know you can’t pay the full amount back, consider how much you would be paying if you have to roll the loan over several times. Make sure you read that last column on the loan disclosure statement. The last column shows the total amount you will pay before this debt is paid off. You might be surprised and hopefully, it will make you think twice before taking a payday loan.

In my opinion, payday loans should be avoided at all costs. Proper budgeting and establishing an emergency fund are the long-term answers to avoid the need for a short-term loan, but we all know that this is easier said than done, and the only thing that can be expected is unexpected expenses. Alternatives include: borrowing from family members, credit unions, banks, employers, or credit card cash advances. These loans are likely to be at a significantly lower interest rate and contain more favorable terms for the borrower.

Putting off the purchase until you save enough money would help you avoid all interest rates and fees. A payday loan may seem like an easy solution to the holiday cash crunch, but avoiding them and considering other alternatives could keep you out of bankruptcy!

I read an article today on Marketwatch.com that inspired me to write this blog. The article was discussing how increased legal fees because of the new reform legislation may drive more people to try to file cases on their own. The article was a lot more neutral in giving advice about whether to use bankruptcy attorneys or not than I’m going to be. It is now more important than ever to spend the money on good bankruptcy lawyers to help you through your bankruptcy.

First of all, despite the increase in attorney fees that the article points out is anywhere from 10% - 75% depending on where you live, the price you pay for good representation is well worth it. Despite the increase in cost, bankruptcy cases are still a bargain in comparison with the cost of continuing to maintain your payments on debts you have no hope of paying off.

Your creditors have a seemingly endless group of high-priced attorneys working on their behalf to try to find ways to overcome your bankruptcy filing. Many tactics creditor’s attorneys employ because the tactics work when dealing with an uninformed, inexperienced, and unrepresented debtor simply won’t be employed by the creditor if you have legal counsel.

Third, as the article points out, bankruptcy can be much more expensive than an attorney fee if you don’t do the paperwork properly. If you fail to file all the required paperwork within certain deadlines your case could be dismissed. While it is possible to file another case, you will have to pay filing fees over again. Not only that, but improper filings may cause you irreversible hardships. You risk losing your car or house that would not have been lost had you hired an attorney to ensure the paperwork gives you the protection you need. Also, if you have to file over again because the paperwork was not proper the first time, the bankruptcy law isn’t as friendly with each subsequent filing. The automatic stay in a subsequent case may be limited in duration and there are other steps that need to be completed to insure the stay prevents creditors from taking action against you.

Finally, while some contend that the paperwork is “like filling out a tax form or a social security application” (Steve Elias, founding editor of Nolo, publisher of legal self-help guides), I would argue that completing paperwork is a minor portion of why you are hiring an attorney. Even if you are savvy enough to complete the paperwork properly, you still should have legal representation.

Good legal representation involves: advising you about the best bankruptcy options for your situation (a petition preparer can not give you this advice and you may not know all the specifics about all of your options; advising you how to protect as much of your property as possible, serving as your representative in dealing with your creditors; there are many inquiries creditors can make of debtors that would not violate the automatic stay, so if you represent yourself, you may still get phone calls from creditors asking you for information; serving as your representative in dealing with your trustee, protecting you from potential illegal collection actions by your creditors (your attorney knows what to do and say in dealing with a creditor who may be trying to take advantage of someone who isn’t represented); filing the proper motions for relief from all sorts of potential issues; and advising you about the law in the event there is a dispute as to dischargeability or dismissal of the case, among other things.

Even most self-help publications advise debtors to hire attorneys and get good legal advice. Again, the risks of doing the case yourself and the hidden costs that could result from one misstep almost never outweigh the value you will get from obtaining good legal representation in your bankruptcy case. Remember, in most Chapter 7 cases anywhere in the country, your cost will be less than $2,000. If you think about how much money you are paying per month on your minimum payments to your creditors or how much money a creditor could garnish from your paycheck in the event the creditor obtains a judgment, the legal expenses pale in comparison.