The Basics To Attend Financial Sustainability



Sustainability is a common term in environmental issues, but lately it becomes more of a personal finance term too. That’s because financial decisions should be sustained over the long term. Your finances need be able to support you and your family over an extended period. Financial sustainability means having plans and flexibility. You need to have plans B, C and D. In this post, you can learn some proven tips that will be able you to see your money stay around as long as you do.


Save Before You Invest

It’s a good idea to save enough money equivalent to your expenses for at least nine months before even thinking about investing. While planning for your savings strategy, make sure you put money to your retirement funds, especially if your employer still offers a 401 (k) match. Once you already have an emergency fund, don’t stop there. An excellent goal is to save at least 10% of your earnings each month or as you can afford. By the time you retire, you can use your savings to continue living comfortably.

Maintain Good Credit History

Paying your bill on time leaves an impression to banks and issuers that you’re a risk worth taking. A late payment on credit cards or mortgages will damage your credit score and overall credit health. Banks and issuers will likely look into your payment history when evaluating your credit risk. You’ll get a notion of responsible and reliable borrower if you have a long-standing history of on-time payments. Otherwise, a poor history suggests you may not repay debts and too costly to let you borrow money. A credit report is similar to an adult report card.


Spend for Retirement

A very easy rule to follow for saving is that you spend less than you earn. That might not be as simple if you’re having a problem keeping up with bills. A good spending plan would do the trick. Some people call this a budget, but since we’re referring retirement as something to buy, the term spending plan is more appropriate. Consider a budget not as a means to the end of buying a large television but a budget that will sustain over many decades and prepare you financially once you’re deep into retirement.

Savings Plans Are Good If You Can Get Them

If you’re working for a company that offers a traditional retirement plan, such as a 401 (k) plan, it’s an excellent idea to put in your money until the company stops matching your contribution. You may not make good gains some years on the funds within the 401 (k), but at least you’ll have a peace of mind knowing that you have the company match that doubled your contribution. A high-interest rate will come out of that. Your money may not be doubled by the time you’re entitled to take it out, but it’s going to be a lot higher than what you could typically make on any other investments.

Make the Most of Income Sources Other than Savings

Your decision about when to start taking Social Security can either cut your retirement income or boost it. For married couples, they can claim spousal benefits to get a substantial increase in income. You need to factor your maintenance expense if your income comes from rental properties. There’s a significant advantage of smart planning that will help you over the long period.

Americans Retired Earlier Than Planned


Americans are more confident than ever about their chances of experiencing a comfortable retirement, but there’s a thing they are seriously delusional about: when they will finally call it quits.

couple_relax_on_beach_0According to the Employee Benefit Research Institute’s latest retirement confidence survey, there’s a significant gap between when workers expect to retire and when people actually retired or left the workforce. Half of retirees say their retirement came earlier than planned.

Out of 10 workers being surveyed, less than one say they expect to leave the workforce before the age of 60. However, 35% of retirees say they stopped working before the age of 60. Comparatively, only 28% managed to retire between the ages of 60 and 64 and only 9% made it to the traditional retirement age of 65. Even slimmer percentage those who made it until age 70 at a mere 6% when, in fact, more than a quarter of workers say they want to do.

It’s clear in the study that the majority of premature retirees did not leave work because that was their plan. Sixty percent of early retirees say they had to retire because of health problems or disability issues. Twenty-seven percent say their company closed or downsized, and 27% cited taking care of a spouse or family member.

When People Plan To Retire

expected retirement age

When People Actually Retired

actural retirement age

These stats aren’t consistent with the retirement narrative that came out in the years following the Great Recession. The general instruction for older workers whose savings were significantly affected by the financial crisis was to lower work longer and perform more with less. Almost 70% of workers say they want to keep making money after they retire by continuing to work part-time. However, in reality, only 23% of today’s retirees say they’re working for pay in retirement.

The expectation gap is quite alarming when considering the reason people are so eager on dragging out their working years. Although, nearly all retirees who are working in retirement say they do it because they enjoy doing so, more than 50% admitted they needed the extra money to make ends meet. Around 40% said their investments and savings had dropped steeply.

There are real financial consequences for workers who did not mind their retirement age enough. They may not save enough money to last them through their golden years.

The report says “Retirees who retire earlier than planned are more likely than those who retire when expected or later to say they are not confident about having enough money for a comfortable retirement,” or perhaps about paying for long-term care expenses, medical expenses, and basic expenses.

This year’s EBRI survey wasn’t all negative for retirees. Workers today are more confident about their chances of experiencing a comfortable retirement than they have in years.

Workers who are very confident about retirement up from 13% in 2013 to 22% in 2014, and almost as high as the rate among workers prior to the recession. Forty-eight percent of workers are taking proactive steps calculating the amount of money they need to save for retirement now for later use, up from 44 percent in 2014.

Google Wallet Offers More Secure Stash Money For Their Users


Google (GOOGL) will be making a major improvement to its mobile payment service, Google Wallet. Google user’s money will become a lot safer with the latest development. According to a Google spokesperson, the company’s will make all cash balances that stayed in Google Wallet FDIC-insured. Most users probably still don’t know it.


Currently, the money you stash in mobile payment apps, such as PayPal, Venmo, and Google Wallet is not FDIC-insured. Only funds held by banking institutions are protected by the Federal Deposit Insurance Corporation up to $250,000. History has proven time and again that banks closed when depositors least expected it to happen. So, the FDIC-insured fund provides some extra peace of mind to consumers.

Unlike banks, the new money transfer services fall under the same category of the likes of payday lenders and prepaid debit cards, which are all considered non-banking institutions. As a nonbank, they aren’t required by law to be federally insured.

Consumers don’t normally park their money in these places. They are using them as tools to transfer funds from one entity or person to another. But customers still use them to stash their cash in some situations. For example, customers of Google Wallet who send or receive cash from other Google users can choose to keep funds, which is called Wallet Balance.

As of this writing, under the user agreement stated in Google Wallet, balances are not FDIC-insured. But, a Google spokesperson confirmed in a statement recently that its current policy has changed. Google will hold Wallet balances that are FDIC-insured in multiple banking institutions, which means if the company fails, user’s funds will be protected. The spokesperson did not say any further details or say when the update would be implemented.


Neither PayPal nor Venmo, which are both eBay (EBAY) products, offers FDIC insurance for users who keep cash in their accounts. A spokesperson for both companies says they don’t make public how they store stash funds of their users.

If you use their primary purpose, which is to transfer money simply from one point to another, you shouldn’t have to worry. If the cash you’re sending is tied to a credit card or bank account, your funds are safe. PayPal offers zero liability protection for users, meaning they are covered for fraudulent account activity.

For example, your friend is chipping in $200 for her share of a group outing or tour. Rather than transferring the amount you received from your friend directly from Venmo to your back account, you decided to just leave that number there. You might prefer to have a little cash on hand in case you need quick transfers. But that money sleeping in your Venmo account isn’t insured.

The same for PayPal. You may use your PayPal account to pay your online purchase. If, in any case, you want to return the item and the company refunds you, the cash you use for payment won’t go back to your bank account. Instead, it will go back to your PayPal account, which isn’t FDIC-insured. You may just decide to leave that money in PayPal and use it the next time you shop online. The amount is not federally insured.

This was not the case for PayPal for many years. The company used to store user’s unused money in various banks that were FDIC-insured. It stopped the practice in 2012 as California state law made it more expensive for the company to do so.

In worst case scenario, if these non-banking institutions fail and file for bankruptcy, their users would become their creditors. If the users want to get their money back, they will need to go through a bankruptcy court just like everyone else to get their money back. With FDIC insurance, the customers will just wait a few days for the payment from the government.