Everyone wants to protect their family, both physically and financially. However, not many of us know how to do it--especially financially. Most people think that you only need to protect your family physically and spend enough time with them. However, securing your family’s financial future is just as essential. Investing your money and opening a savings account is not enough. The future is uncertain and unpredictable; anything can happen. Below are six smart ways to protect your family financially:
Pay off your debts
With growing dreams and aspirations, debts and loans have also become part of our lives. Whether it’s a car loan, a mortgage, credit card loan, personal loan, or a durable consumer loan, most people need to take a loan to realize their business and personal financial goals. While loans can sometimes be helpful, especially in wealth building and asset acquisition--not all loans are suitable for your financial health. And avoid debt consolidation companies at all costs--what they promise and what you get are often two completely separate realities. Loan mismanagement can affect your economic well-being and cause you immense stress. The best way to take care of your family’s financial future is to avoid unnecessary loans and pay off all your current debt.
Acquire some financial management skills
Being a responsible borrower is not enough. You also have to learn a few things about managing your finances. There are no absolutes in today’s world, and anything could happen to your accumulated wealth, savings, and investments. It’s therefore essential that you learn the tricks of managing money--starting with living within your means, removing unnecessary expenses, and creating a household budget. You should also consider how much you will save and invest while keeping your money safe. Learning the art of money management will not only lower your stress levels; it’s also the best way to protect your family’s future.
Consider taking an income protection plan
Today, no job is secure unless you're working for the government. To ensure you are not out of a job, take some classes, and invest in yourself. Acquire new skills and keep upgrading your current skills. Come up with a proper investment strategy to ensure your financial future in case you lose your job. Today, income protection plans can help you in case you lose your job. Invest in a good protection plan or insurance, depending on your future requirements and needs.
Take life insurance
No one knows what the future holds. While you may be earning more than enough money to take care of your family today, what happens if you are no longer there? Will your savings be enough to get your children through school? Life insurance is the best protection if something happens to you, especially if you’re the breadwinner. If you just became employed or prefer keeping your security and savings separately, you should consider a term insurance plan for comprehensive protection. The best thing about this insurance is that it’s more affordable and a little cheaper. In fact, you can use a term life insurance calculator to estimate how much you would need pay per month. Apart from life insurance, ensure you also take health insurance for everyone under your roof so that you’re not strained in case someone falls ill.
Start a college fund for your children
A college fund will help you take your children through school without incurring unnecessary debt. A college education is not only beneficial for your child’s potential future earnings; it’s also useful for their personal growth. With college's living and tuition expenses rising every year, it’s essential to choose the best college savings plan for your children and start as early as when they are born. Your deposits can be modest. Most parents are comfortable setting aside 25-100 dollars from every paycheck to their children’s college fund.
Teach your children about money
If you do not teach your children about money early, someone out there in the world will, and it’s going to be an expensive and painful lesson. Give them a head-start as soon as kindergarten. You can use a piggy bank to teach them about savings and how money grows when saved. As they grow older, you can now become a little aggressive and start giving them a commission for chores done. Show them opportunity cost and teach them how to make financially-sound decisions. When your child becomes a teenager, teach them the importance of sharing with others, being content with what you have, and how to manage debts. Please give them the credit card lesson early and let them understand about good and bad debt.
Financially taking care of your family is not easy. However, if you follow the above tips, you will be closer to ensuring that your family’s financial future is well-taken care of. Regularly track your financial milestones and review your goals with time.
Do you have a business idea? Do you look forward to establishing a family-owned business? You may ask yourself such questions at some point. Since you want to ensure that your business idea materializes, you may have to consult some professionals before launching the family-owned business.
During the planning stage, you should gather some information, carry out some research, and make sure that your idea is implementable. As you collect data, there are some professionals whom you should consult. For instance, you may need a bank loan. In such an instance, you are supposed to liaise with a banker.
Some of the professionals that you are supposed to consult as you start the family-owned company includes:
An Attorney
As you start a business, there are some laws that you need to abide by. In this case, it is wise to seek the legal counsel of a professional attorney. The lawyer will offer advice depending on the type of company that you want to establish.
The lawyer will handle all the legal paperwork as they ensure your business structure meets the limited liability and your goals. Some lawyers work extensively with small business owners. This type of specialist will take care of you and will keep your interests in mind. Try to find someone like that to have in your legal corner; navigating the legalities of owning a business can put you into the underdog position, and not all attorneys will go the extra mile to help you succeed.
Trusted Advisor and Accountant
As you start a business venture, you should seek some advice from a trusted financial advisor and accountant. There are business owners that normally assume the accountant can also help to handle taxes.
As your business endeavors grow, the accountant may also act as a trusted advisor. They will help you to make sense of the cash flow, financial statements, and also ensure that you can think strategically once some opportunities come forth. Also, they can help you to overcome different challenges. As you manage to secure more clients, you may ask yourself about the right period to acquire new pieces of machinery and also hire more staff. Well, as a trusted advisor, the accountant will help you to make better decisions. In the process, your business will run more smoothly.
A Business Mentor or Coach
It is good to solicit some advice from a mentor who has been in the business world. Regardless of whether you are establishing your second business venture, it is advisable to liaise with a professional who can offer independent business advice.
You are supposed to liaise with a person who knows there is something to lose. They should also be conversant with the basics of the specific industry you have ventured into. The business venture should also be independent such that the vision should be implementable. Some business ideas are not viable in any manner.
The business coach should be in a position to offer some advice for many years to come. The main focus is not only on planning the business. They are supposed to provide guidance as the business grows too. Suppose you are not in a position to hire a mentor. In that case, you can liaise with some experienced investors, and they will offer some insight into how to overcome different challenges that come about once in awhile in the business world.
A Banker
As an entrepreneur, you may have some capital to establish your business. In some instances, you may need more money to expand your business. In this case, you may apply for a traditional bank loan. If you plan to borrow money, you should liaise with a banker since they can assist you in handling the application process. You should consult with your mentor, and they can recommend a trusted banker. Some of your business colleagues can also offer recommendations.
For starters, you will have to ensure you have a business checking account. Make sure you have learned about what different credit unions and banks can offer your business. Having a good relationship with the bank can come in handy as you apply for a loan.
As you start a business, you should make sure you have access to different pieces of information. Liaise with the professionals who have been listed in this article, and you will manage to establish the family-owned business successfully.
If your life has gotten off track, take control now to restore stability, prosperity, and security. There are many things you can do to address any problems that have surfaced and to create the lifestyle you want that can be enjoyed for years to come. All it takes is a commitment to explore options like the following to get your life back on track and the road to success.
Finances
Start by organizing a monthly budget of your income and expenses. Pay all your regular bills first, including housing, food, transportation, and insurance. Save a consistent amount each month for emergencies or future needs. If you must keep the funds fluid, look for a high-yield savings account to earn at least a minimal amount of interest. Set aside income for occasional expenses like home repairs, car maintenance, and flexible purchases, such as clothes or entertainment. Give yourself a little spending money for leisure or recreational activities. Balancing your budget and paying your bills on time will lead to a higher credit score. This will strengthen your financial profile for future loans or credit card applications. Avoid opening too many charge accounts, as you may be tempted to spend more than you earn and end up in serious debt.
Time
Be more time conscious and manage your days and hours just as prudently as you manage your money. Organize your professional schedule to avoid being late and to keep up with your workload. Maintain a personal schedule to include the most important activities in daily life, such as family responsibilities and related events. Check your calendar daily and weekly for previews of what is coming so you can plan ahead and be prepared. Take note of significant amounts of "down time" that might be wasted hours and fill some of them with meaningful activities like taking a class, planting a garden, or starting an exercise routine. Use free time for fun and interesting activities that may be productive, too.
Health
Take care of your physical and mental health. Without it, nothing else in life will truly matter. Address any chronic conditions or underlying health problems by seeking a medical exam and possible treatment. For example, if you are battling alcohol or drug addiction, you could be eligible to enroll in outpatient therapy at a local drug rehabilitation center instead of being admitted as an inpatient. Schedule twice-a-year dental checkups and an annual medical exam. A doctor can help you curb risky habits like using tobacco or losing weight. Contact a professional counselor about mental health issues like anxiety, OCD, stress management, or bipolar symptoms. Optimize your health because it impacts everything else you do. Take time to relax and enjoy nature or spend time with a beloved pet.
Relationships
Evaluate your personal relationships to determine their role in your life. Let go of one-sided friendships where you do most of the work by staying in touch or paying for shared activities. If you experience frequent arguments with someone, consider whether it might be best to end things and go your separate ways. Nurture the most important relationships in your life, whether in your family of origin or in a marital family. Enjoy fun times with people who share the same interests. Choose a long-term partner who will build you up and support your interests, and be willing to do the same for that person. A loving relationship contributes to good health and a positive outlook.
Give Back
One of the most valuable and satisfying things you can do to keep your life in order is to help others. In becoming aware of other people's struggles, you can learn to put your own circumstances in a realistic perspective. Donating money or goods to charity or volunteering for worthwhile causes increases the release of positive endorphins in the body that make you feel good about helping someone in need. Services like these come with a tax deduction, so you gain a financial perk as well.
Every part of our lives fits together to form a composite image of who we are and what we must do to succeed. Take stock of your goals and behaviors to make changes that will help you to regain order in your life. Proactive steps like these can pave the way to happiness and success.
Looking to become financially established? Money problems have become a common issue for many people. Also, it happens in every income bracket. Alternatively, you must understand what areas to focus on to build financial security and generational wealth. That is to say, personal finance is 80% behavior, and only 20% head knowledge. Meaning, it’s key to understand the principles, however, it’s more important to understand how to use the principles. Use the following 5 tips to finally find a breakthrough to gain financial security and live with financial freedom.
The following post comes to us from Mia. Mia is the founder of Money-Minded Millennial, a personal finance blog that teaches readers how to save and earn more money while consciously designing their ideal life. Visit https://moneymindedmillennial.com/ to get inspired and join the growing tribe of people seeking Financial Independence.
I’ve never really gotten much joy from driving. I don’t like having to sit still for long periods of time, and I also don’t like the feeling of being dependent on a vehicle to get me places.
Aside from that, I’m also a terrible driver. Every car I’ve ever driven has at least one ding or scratch on it.
When it came time for me to go to college, I chose a school in Boston because the public transportation system would make it so that I’d never have to own a car.
That worked out fine, until my husband and I moved to Miami, a largely car-dominated city. It took me a couple months to find a job here, and by the time I accepted an offer we had already signed a short-term lease at an apartment that was 30 minutes away from the office. Since my husband and I shared his car between the two of us, we took turns Ubering to work or coordinating to align our commutes, which got very stressful very fast.
We could’ve bought an extra car for my use, but given the reasons I listed at the beginning of this article, we decided to stick with sharing his car. When our lease came to an end, we made it a priority to find an apartment that was within walking distance of my job.
This small change was one of the best decisions I’ve ever made and convinced me that it’s possible to be a one-car household. Whether your car lease is almost up and you’re thinking of not renewing, or you have an extra car that sits in the garage, these next benefits may give you the push you need to switch to the car-less life.
Cost
Saving money is probably the most obvious benefit of not owning a car. But just how much money does it save you every month to reject car ownership? Here’s an approximate breakdown:
Car payment: $472
Your biggest car expense is most likely the cost of the car itself. According to the 2019 State of the Automotive Finance Market by Experian, the average monthly payment is $554 for a new vehicle and $391 for a used one. Taking the average car payment amount for new and used vehicles, the average monthly car payment is about $472.
Gas: $200
According to the U.S. Census Bureau, the average travel time to work is 26 minutes. Taking into account traffic and a mix of highways and slower roads, we can assume an average commuting speed of 40 miles per hour. Traveling for 26 minutes at 40 mph leads us to an average round-trip commute of about 35 miles.
The cost of gas depends on the fuel efficiency of your car. On average though, the cost of gas is 15 cents per mile.
Driving 35 miles per day and spending 15 cents per mile means the average cost of gas just on commuting is $5.25 per day, or $157.50 per month.
Of course, cars aren’t used just for commuting. In a given week, you may use your car to drive to the store, attend events, and maybe take longer-distance road trips. Taking all of this driving into account, you’re probably spending close to $200 per month in gas.
Insurance: $44
According to insure.com, the average annual cost of car insurance in the U.S. is $526, or approximately $44 per month.
Maintenance: $99
The cost of maintaining your car would depend a lot on whether the car was new or used, the mileage, etc. However, according to AAA, the average cost of repairs, maintenance and tires for a new car is $99 per month.
Total monthly cost of car ownership: $815
The cost of owning a car depends on a variety of factors, including where you live, your commute, and the type of car you drive. However, variables aside, the average cost of car ownership is about $815 per month.
Even if your car is paid off, which according to Experian Automotive takes about 4-5 years, you can still count on spending $343 per month just on recurring expenses.
Of course, it wouldn’t hurt to have an extra $815 in the bank each month. Aside from the savings, there’s the opportunity cost of not being able to invest that extra cash. If you invest those savings into a low-cost index fund such as Vanguard, your money would compound and make the car that much more of a financial burden.
Health
Do you have trouble getting motivated to work out? Having a workout built into your daily routine means you can’t avoid it.
My first year in Miami I walked to work. My second year I switched jobs and biked. Then my office moved, and I was lucky enough to have access to public transportation. All three commute situations necessitated that I exercised in some way to get to work. I found that I arrived at the office and returned home feeling more energized than if I had been sitting in a car instead.
Not only does walking/biking to work benefit my physical health, but my mental health as well. Having two 15-minute trips of fresh air per day and listening to music or podcasts lets me slow down and take a breather from all of the stress of work and home life.
On the flip side, being sedentary is one of the worst things for your health. Especially if your commute is 30 minutes or more, everything from your weight, heart health, and posture suffer from extended periods of sitting in a car. Plus, road rage doesn’t help your stress levels.
If you make the switch to a car-less life, you will be investing in your long-term physical and mental health.
Environment
Coronavirus gave us insight into how the environment can benefit from a slowed economy. Scientists report an unprecedented 17% decrease in carbon emissions, partly due to the reduction of cars on the road.
Eliminating just one car from the road contributes to the cumulative effect on the health of our planet and its inhabitants.
Alternative Transportation
You may be reading this thinking: ok, all these reasons make a great case for not owning a car. But what are my alternatives?
Luckily, there are lots of ways to get from point A to point B without needing to own a car. The options are:
Public transportation
Biking
Walking
Electric bike
Electric scooter
Roller-blading
Hover boar
Lyft
Uber
Car rental (for longer trips)
While everyone’s situation is different, there are ways to reduce the number of cars in your household or reject car ownership completely. Maybe you’re changing houses and can consider moving somewhere that’s more public transportation accessible. Or maybe you’re in between jobs and can choose a job that’s closer to where you live. Another option is to carpool with a coworker, so you can both save money and the headache of driving every day, as well as reduce your carbon footprint.
Your car might seem like something that’s impossible to live without, but if you consider small changes you can make to either reduce the number of cars you have or the amount of time you use your car, your wallet and health will thank you.
Online lenders have had a massive breakthrough in the last couple of years. Millions of people around the world started using their services due to the advantages that they have over the banks. Up until recently, banks were considered the most legitimate lender, but the problem was that the number of approved loans has been significantly down in the last decade.
Ever since the 2008 financial crisis stunned the world, banks have been far stricter with handing out loans. They do more detailed background checks, approval times take a bit too long, and as we mentioned above, the rates are lower than what they used to be. But, online lenders managed to overcome all of these disadvantages.
They have fast approval times and the approval rates are very high, around 75%. The process of applying takes just a minute; all you do is fill out an online form and give basic information. We wanted to take a closer look at these loans and provide you with a list of the 3 most common online loans.
Wedding Loans
All of us know that weddings cost a lot, which is why many people decide to apply for loans to organize them. They cannot rely on the banks since the chances of them being denied are high, so naturally, they contact online lenders. The best part about online wedding loans is that they are available to people with a bad credit score.
During this period, couples usually have a lot of expenses to pay and that is why their credit score keeps declining, which is not strange. Wedding loans for bad credit can help you with regular payments and have similar or lower interest rates than credit card loans.
After all, weddings are one of the best events of our lifetime, and we must do everything in our power to make it memorable for us and the guests.
Small Personal Loans
Whenever thinking of renovating your home or you need fast money to invest in your business, small personal loans from online lenders are a perfect choice. Considering the fact that the amounts are low, interest rates might be higher than usual, but the best part is that small personal loans are transferred to your account very fast.
We mentioned earlier that online lenders are extremely efficient when it comes to applying and getting accepted for a loan, which is why small personal loans take a week to be transferred to your account.
Car Loans
Finally, car loans are the last mention on our list of most popular online loans. There are a few things that you need to consider when thinking of applying for a car loan. You need to decide whether you want a brand new or a used car. There are some pros and cons in both cases. Used cars are much cheaper than new cars, but they are more prone to break down.
On the flip side, new cars are far more expensive, but the chances of them breaking down are low. Even if a malfunction occurs, new cars usually have warranties that will cover your costs. But, finding a decent used car that will serve you well is also likely to happen. The price of the car determines the loan and the interest rates depend on the monthly payments.
Online lenders have become very popular because they are far more flexible and more caring than banks. Some people believe that in the next few years online lenders will likely be the number 1 option for personal loans and will overcome the cons that the banks have.
The following is a guest post by Manna Chikwe. Manna is a b2b content writer, copywriter and ghostblogger. Enjoy!
I heard about robo advisors in 2016 and it was my first time hearing it alongside about 70 people in a business forum. It was pretty much a new term for all of us present. But robo advisors have been in the investment world since 2006, though enhanced versions were introduced in 2008 after the financial crisis. It has since then been popular among investors looking for easier ways to manage their portfolio.
In simple terms, a robo-advisor is a digital platform that offers automated investment services based on algorithms. It collects data from you about your monetary situation and investment goals through an online questionnaire. It then makes use of these statistics to decide which type of portfolio and asset allocation is best for you.
Robo advisors today use passive investment strategies based on Modern Portfolio Theory and the Efficient Market Hypothesis. They create an income investing portfolio that is right for you based on your risk tolerance. With robo advisors, you don’t have to bother about how frequently you should rebalance your portfolio as it automates this process. It also takes care of your tax-loss harvesting, stock level tax harvesting, risk parity and your retirement plans.
These software platforms are revolutionizing the way investments are carried on today. Before you make the decision of using a robo advisor, there are important pros and cons you should know.
PROS OF ROBO ADVISORS
Low investment requirements
Many people still think that investing must be with huge chunks of cash. However, with robo advisors, you no longer need a lot of money to begin investing. You can get started with little amount depending on the particular robo advisor you intend to use.
Some robo advisors like You Invest by J.P Morgan let you start investing with as little as $1 while Bettermont, one of the highly-rated robo advisors allows a 0$ minimum requirement. Meanwhile, on average, a traditional advisor will require you have up to $5000 minimum to begin investing. This makes using a robo advisor entirely good news especially when you are starting out with little networth.
Little experience required
You don’t need to be an expert investor to get started with a robo advisor. These platforms typically save you the stress of bothering about value investing, Phil Town Rule #1 system, or any other investment strategy out there. All you need is the readiness to invest and the ability to fill out a questionnaire online.
Yeah, it’s that simple.
Then all you have to do is sit back and watch the software automatically choose an investment project for you and manage it efficiently. It also constantly tracks your investments to rebalance them with your target allocation. Rob advisors also educate you on how to make the best decisions for your investment goals.
Low fees
One of the big benefits of robo advisors is their fees are lower than what you will be paying a human financial advisor. Robo advisors make investment more affordable. The fees charged by robo advisors are lower because they usually invest in index funds and ETFs. Most robo advisors charge around 0.25% to 0.50% of your assets under management. Some robo advisor software like Ally and M1 charge completely nothing to manage small portfolios. Human financial advisors on the other hand charge an average of 1% – 2% for ongoing portfolio management or a flat fee of $1,500 – $2,500.
Logical thinking
Robo advisors use logical analytical research based on powerful algorithms to organize investment processes. They are an algorithm-based software and unlike human advisors; they don’t make investment mistakes because they freaked out at the fall in prices or simply investing from a hunch.
Robo advisors manage your portfolio based on logical deciphering of macroeconomic factors, company performance data and financial news.
Easy Accessibility
With a robo advisor, you no longer need to schedule meetings with your financial advisor or spend plenty of time waiting to fill out paperwork. Your investment software is always available to you on our device to do all of these unless you don’t have an internet connection.
Also, the software provides you with all your transactions accurately down to the smallest detail anytime you want it. They don’t overlook certain information or inadvertently give you incorrect information.
It’s not only about robots
You may not be too comfortable with the thought of having all your investment being organized by software. I mean, not all of us have that total confidence in computers. But you don’t have to worry. A robo advisor is not just all about a tech tool handling your money.
They work with human professionals to provide investment services. Think of it from the common-sense perspective. Definitely there must be bunch of professionals over large screens monitoring investments to ensure that they don’t get too exposed to certain markets or anything goes wrong. With robo advisors, there’s more than just supervising through large screens.
Most robo advisors offer human access. In fact, some of the key advisory firms have teamed up with robo advisors to give professional advice to users. Robo advisor software like Betterment and LearnVest have Fidelity Investments professionals offer advice on their platform. These experts answer your questions regarding understanding your portfolio, making investments, and achieving your financial goals.
CONS OF ROBO ADVISOR
Low human interaction
Inasmuch as robo advisors simplify the investment process, some people actually prefer total human oversight and interaction on their investment. Having a human expert oversee your investment still have huge benefits especially for big investments. There are also the possibilities of money related problems that only an inclusive human interaction could solve.
No Financial Planning Services
Robo advisors generally manage your investment but don’t provide financial planning except for very few of them like LearnVest. So in most cases, you will need a traditional advisor to guide you on best practices for your investment, especially for long term purposes.
Limited investment portfolio
If your target is to have a broader portfolio, then a robo advisor may not be right for you. They usually invest in mutual funds and ETF’s. Another downfall is that you cannot even choose the mutual funds or ETFs to invest in. Also, purchasing individual stocks or bonds are out of the option for you. However, indexing strategy has been proven to be better way to invest than picking stocks.
No best for long term goals
Robo advisors are best for short term investing and may not serve your long term goals. Mostly, the investment software structures your asset allocation in line with goals achievable within a short period of time.
If your goals stretch over a long period of time, it will be better to involve a traditional advisor to help you with the best investing strategies.
ARE ROBO ADVISORS BEST FOR INVESTMENT MANAGEMENT?
While the decision depends on your objectives, robo advisors are however indeed a great investment option. They offer numerous benefits as these software platforms keep integrating features that meet the needs of investors.
The human interaction and assistance which most of them offer is a great way of getting the most of both man and machine in investment. To choose a robo advisor, the most important thing to know is to make a choice that suits your financial goals so as to maximize your benefits from your investments.
The following is a guest post by Bella Wanana. Bella is a dreamer and writer who is passionate about personal finance. You can follow her here to be a witness of her eclectic life. Enjoy!
Employers, employers, employers. They are what most of us depend on for a livelihood, and they are the places where we spend more than 40% of our waking lives in. These companies, ranging from a small 10-people startup to a multi-million-employee conglomerate, are non-living entities that collectively breathe and produce and impact every single aspect of our lives.
Of course, as entities powered by human beings, employers cannot neglect to take care of the very source of their energy – the employees themselves. Your employer may offer benefits that you, a regular employee, can take advantage of to help with your savings and life goals. Below are a few common tips and tricks that I have used in my personal life.
Take advantage of your company’s employee matching program for retirement funds
Although in the last few years, more and more employers have switched from defined benefit retirement plans (DB), which provides a stable source of income to their employees upon retirement, to defined contribution retirement plans (DC), which only guarantee the amount contributed but not the returns, most companies still match a certain percentage of your contribution to the company-sponsored retirement fund. The exact percentage differs by employer, but, regardless of the number, make sure that you contribute as much as you can, ideally the full amount. Granted that there may be cases, such as having to cover for an emergency medical bill, or you are focusing on building your emergency fund, that you prefer to have access to the money that would otherwise go towards your retirement income, you should switch back as soon as you reach these short-term goals. While it is true that there are restrictions for accessing the funds – typically you can’t access the funds till you are at least 55 or 60, but this is 100% guaranteed return at a rate of 50% (if you contribute $1 and the employer contributes 50 cents), or more. Not even Warren Buffet, who is believed to be the best investor in the world, could claim to consistently succeed at this rate.
Take advantage of automatic deductions with your pay checks
Many employers take automatic deductions, most commonly for your income taxes and company-sponsored insurance premiums, directly from your pay checks. Additionally, if you elect to participate in the company-sponsored retirement program (which you really should as I mentioned above), your contribution to the fund is also automatically deducted from your pay checks. But you can go one step further: employers could also automatically deduct from your pay checks your contributions to your own savings accounts, such as your 401(k)/Registered Retirement Savings Plan (RRSP). Although your company most likely won’t provide the same matching benefit on your individual accounts, this technique can help you save money, because you won’t even be able to see the money showing up in your bank account to begin with. You will be much less likely to suffer from separation anxiety from your money, will get accustomed to a lifestyle using only the money you have access to, and the money locked away will grow to become a nice nest egg for you to enjoy down the road.
One important thing to note is that before you set up the automatic transfer to your 401(k)/RRSP, you should do some calculation to make sure that you won’t be at the risk of over-contributing over the full year. This is especially true if you have switched jobs mid-year, or have multiple jobs, or have 401(k)/RRSP accounts with multiple financial institutions, as it may be challenging for an outsider other than you to keep track of everything for you.
Maximize usage of your employer’s insurance benefits
First and foremost, celebrate the fact that your employer actually offers insurance benefits for you! After that, please make sure that you familiarize yourself with all the benefits that your company offers. I know that reading the pamphlets can be a really pain sometimes, but there could be many hidden gems in them. Oftentimes, in addition to the standard drugs and dental benefits, your employer can also offer benefits on, for example, registered massage therapy. Instead of going to an expensive restaurant for a fancy dinner, why not use some of your insurance benefits for a deep tissue massage (please make the point to call ahead and confirm that it will be reimbursable) at a nice spa? That’s a nice way for some self-pampering for sure. You can even team up with your significant other and enjoy a couple’s massage – that’d be a nice date night without having to shoulder 100% of the cost yourselves.
If you are fortunately healthy enough to not need all the services provided in your insurance benefits, and you are not interested in paramedical services even for relaxation purposes, you could potentially redirect a portion of the benefits towards a taxable health spending account. Depending on your company’s policy, this account may be used for general health-oriented activities, such as fitness classes, gym memberships, or even golf memberships. Note that these count as taxable benefits so you’d still have to pay income tax (let’s say 30%), but for the fitness enthusiasts out there, who doesn’t want to join a fitness class at a steep 70% discount?
Take advantage of your company’s perk book
In addition to the relatively standard benefits such as retirement matching and supplemental health and dental insurance, many companies also offer additional discounts in partnership with external organizations. Your company can usually negotiate a much better deal with the external partners than what you can do by yourself, simply because your company represents a much bigger pool of potential clients. You could get discounts on auto insurance, mortgages, shows, or even concerts. My company even offers discounts for fresh flowers, which was a very pleasant surprise when I was researching for gifts for Mother’s Day! Make sure you familiarize yourself with these unique discounts your company offers, and take advantage of them whenever possible.
Make sure that you reimburse all your business expenses
Spending money on behalf of your company could be a pretty regular part of your day-to-day, depending on your position. Most likely, your employer will require you to use a corporate credit card for company’s expenses, but sometimes, you may have to use your personal ones. Regardless of the cards you use, make sure that you spend within your company’s policies, collect all the receipts, and submit the reimbursement requests before the deadline you company outlines. These are expenses that should not come out of your pockets, so don’t let them!
When you submit your receipts, the company will generally require that you provide at least some description. One good strategy I find useful is to make a quick note on your receipts as soon as you get them. When I first started working, I made the mistake of throwing all receipts into one drawer and only clearing them out all at once at the end of the month. But by the end of the month, I had already forgotten exactly why I spent the money, so it was a huge hassle going back to hundreds of emails to try to sort them out. Don’t be like the inexperienced me, and take a quick note while your memory is still fresh.
I hope the tips above are helpful for you. Let’s take advantage of the perks employers provide to enhance our own lives.
Recently, I shared my reflections on 5 years of tax return filing with TaxAct. I am a big fan of their online platform but am tired of their dramatic increases in pricing in recent years. Their current pricing is $110 for federal and $55 per state (self-employed option). It's time for me to find something new!
On any given day when I'm at home, it's not uncommon to see at least 5 grey Amazon vans delivering packages around the neighborhood. Sometimes, I'll even see them delivering packages to one house after another around the cul-de-sac, almost like a Jeff Bezos Santa Clause.
Of course, our family is no exception. We've been happy Amazon Prime members for about 4 years now. I'd estimate that we do 90% of our non-grocery shopping through Amazon. We also get a lot of value / entertainment out of watching Amazon Prime video.
This got me thinking - is everyone like us with our frequent Amazon buying, and how much do people usually spend in a given year on the platform?
