The study examined the spending habits, savings and investments, and planned retirement dates of 1,387 households that took part in the 1995 Survey of Consumer Finances.  The survey is conducted every three years by the Federal Reserve and the U.S. Department of the Treasury.  The researchers found that 48 percent of Americans between the ages of 35 and 70 would not be financially prepared to spend as much after retirement as they did before. 

The researchers found that respondents' current spending, not including savings and investments, and the age they plan to retire had the most effect on whether they could keep up their standard of living after retirement.  The study was published in the journal Financial Counseling and Planning. 

"There is tremendous range in when people want to retire, from age 50 or even younger, to never," said Sherman Hanna, professor of consumer finances in the College of Human Ecology at ohio State.  Hanna coauthored the study with assistant professor Catherine Phillips Montalto and doctoral student Yoonkyung Yuh.  People who plan to retire early need to save and invest more, because they have fewer years to do it and because they'll have a longer period of time in retirement. 

In this study, 35 percent of respondents said they would like to retire at age 61 or younger; of them, only 44 percent would be able to spend as much during retirement as when they were working.  On the other hand, 55 percent said they would like to retire between the ages of 62 and 65; of those, 54 percent would have enough retirement resources.  Some respondents, 10 percent, said they planned to retire at age 66 or later.  Of them, 68 percent would have adequate retirement resources. 

Current level of spending also was significant.  In the survey, 51 percent of respondents said they spent as much or more than their income in the previous year; of them, only one-fourth would be able to keep up their standard of living after retirement.  But three-fourths of the 49 percent who spent less than their income the previous year would have enough resources for retirement. 

"One of the promising things about these results is that these are two factors (retirement age and spending habits) that people can easily change," Hanna said.  The study can be accessed at the journal's website, http://www.afcpe.org. 
 
by:  Martha Filipic, Technical Editor, Ohio State University Extension 

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A year-long financial education home study program can help anyone who could use a hand in increasing savings and reducing debt. 

"Money 2000+," offered by many county Extension offices, includes a start-up packet, a subscription to a monthly financial management newsletter, advance notice of any special financial management workshops in your area, and an optional computerized analysis that shows you the best ways to repay your consumer debt.  You can set financial goals and improve your financial fitness by doing the financial exercises and study in the privacy of your own home. 

With "Money 2000+<" you'll learn sound financial management practices such as how to make a spending plan that will work for you; how to keep useful financial records; how you might invest some of your savings for additional earning; and how to improve your financial standing by paying off creditors.  Currently, 62 counties in Ohio offer the program, as do Extension offices in 30 other states.  In Ohio, the program costs $10 per year to enroll.  Contact your county Extension office for information.  If your Ohio office does not offer the program, contact Money 2000+ coordinator, 262 Campbell Hall, 1787 Neil Avenue, Columbus, Ohio, 43210 

 by:  Joyce Coures, Family and Consumer Sciences Agent, Ohio State University Extension, Butler County 

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Actually, there are ways to cut down in every expense category.  Be creative. 

If the fabric doesn't rot first, I'll save some money on gifts this year by finally making up those shoe bags.  If you don't sew, you must have some other talent to call upon.  Or you can give a service, like babysitting, running errands, or washing someone's hair. 

Another way to get back on budget is to quit entertaining.  It's a lot cheaper to deliver a pie or casserole to a friend than to have them over for the whole shebang.  And beside, they might invite you to stay and eat with them!  Another alternative is to invite your friends for a weekend lunch or breakfast.  Tomato soup and tuna salad or waffles can go a long way. 

Save wear and tear on the car by declaring a "no-drive" day.  The kids might whine, "You mean we have to stay here with the family for a whole day?!"  The answer:  "Yes." 

Another idea:  Announce a "fix-up" day.  Everyone in the family can fix something.  It might just be the day to teach kids how to mend socks, rewire a lamp, or touch up scratched furniture. 

Or, proclaim a "consignment store collection" day.  Kids can gather up and clean toys they have outgrown.  Men usually have a collection of ties or gadgets they never use.  Women can go through the family's outgrown clothes.  Maternity clothes usually sell well, and just think:  You'll save yourself at least $200,000 by not raising another child. 

When I was small, we traded eggs for milk with the neighbors.  What talent or possession do you have that you could trade with a neighbor?  I'll trade a piano lesson for cooked food any day! 

The biggest money trap is suffering from an addiction - any addiction.  Speaking of which, I spent some time babysitting my dear sister's Beanie Babies, and learned that she believes the underwater world is not complete without Goldie the goldfish, Seamore the seal, Bubbles the fish, Inky the octopus, Jolly the walrus, and Patti the platypus.  Move up to the surface and her beanie world gets more and more crowded:  Gracie the swan, Speedy the turtle, Legs the frog and Quakers the duck are joined by land-lovers Bones the dog, Whisper the deer, Peanuts the elephant, Lucky the ladybug, Ziggy the zebra, Inch the worm, Tobasco the bull, and a whole family of bears.  To my sister, her collection is an investment better than the stock market.  I hope she is right, but to me it looks like a $650 pot of bean soup.  I'm sending her some recipes! 

by:  Joyce Coures, Family and Consumer Sciences Agent, Ohio State University Extension, Butler County 
 
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Impulsive purchases can quickly erode a check cashed to cover daily living costs like bus fare, gas, lunches, or coffee.  Money frequently slips through our fingers without notice. 

If this happens to you, track your spending for a month to see where it's going.  Sometimes habits or patterns emerge that will surprise you. 

Do stops for gasoline include the purchase of a soda or candy bar?  Is a fast food breakfast part of your morning routine?  Spending just 80 cents for coffee or snacks each working day slowly amounts to nearly $200 a year, enough to replace the VCR if it breaks down, or to pay that deductible to make repairs from a fender-bender. 

Keeping a spending log may help reveal seemingly inexpensive habits that add up to a significant total.  It's one way to become both penny- and dollar-wise! 

by:  Diane Johnson, Family and Consumer Sciences Agent, Ohio State University Extension, Darke County 

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