Budgeting and Saving

Do you want seven figures in the bank when you retire?  Focus on budgeting and saving now – it doesn’t take much to start.

How do I start?  Think about and track how you spend your money until it becomes a habit.  Write down the money coming in (income) and the money going out (expenses) over a specific period.  Figure out what your necessary expenses will be, including food, clothing, housing, car, gas, car insurance, and health insurance.  Budget for unexpected or emergency expenses, as well as future needs such as gifts or new tires. The goal should always be to increase income and decrease expenses.

What kind of accounts should I open? Get a checking account and a savings account, and make sure to research which banks or credit unions offer no-fee accounts.  Most banks have mobile banking apps that make it easy to track your balance and expenses, and they let you do transactions online.  Find out what the overdraft fees are for your account. Open a 401k or 457 retirement account as soon as possible, and invest small amounts early.  You can increase your investments over time as your income grows. Start now so that your retirement account builds steady interest. This will allow you to invest aggressively early and be more conservative as interest grows on larger amounts.

Contracts

What is a contract?  A written contract provides proof of what was agreed on between two or more parties, and it helps to prevent future misunderstandings or disputes by making the agreement clear from the beginning.  A written contract gives parties security and peace of mind by having the terms of the agreement down on paper without being changed.  It also reduces the risk of a dispute about payments, responsibilities, and timeframes that the service to be performed under the contract.  A written contract sets how disputes will be resolved and specifies how either party can end the contract before the work is completed.

What should I know about contracts?  Make sure you fully understand a contract before you sign it, and don’t be afraid to seek help if you need it.  Your signature is the most common way to indicate that you have read and agreed to a contract. As contracts continue to move into paperless electronic formats, a “signature” can now mean an electronic signature.  As long as there is a mark that adequately records the intent of the parties involved in a contract, it’s considered a valid signature. 

Warranties

What is a warranty? A warranty is part of a contract that specifies the quality and dependability of the product or service you are purchasing.  The warranty tells you what you can expect from the product, what you must do if you have a problem, what the seller will do in return, and how long the warranty is in effect. Always check to see if the item you are purchasing is covered by warranties and find out exactly what the warranties include and exclude.  A good warranty can save you money and frustration if the items you buy needs to be repaired or replaced with the warranty period. If an item is sold “as is,” it is not covered by a warranty, and you are purchasing the item at your own risk. If you have consumer protection related questions, check out the Kentucky Attorney General’s office at http://ag.ky.gov/.