Archives for 2013

Would You Rather Talk About Your Wallet Or Your Weight?

There are certain topics that make us uncomfortable. Weight and money are two of those subjects.

So, when it comes down to it, would you rather tell people your real weight? Or discuss your income?

According to the latest COUNTRY Financial Security Index survey, most Americans would rather talk about their weight.

talk-about-wallet-or-weight-

An Aversion to Talking about Income

The survey points out that 68% and 58% of women would rather talk about their weight than their wallets. Even though men are clearly more comfortable talking about their weight than women are, women still really don't want to talk about their incomes.

But why do we have this aversion for talking about money? Well, it's not considered polite. A lot of that has to do with the way that we often accord status to those who make more money. The more you have, the more likely you are to command respect.

I'm often reluctant to talk about my income because I live in an area where I make more than 80% of the people around me. It makes me uncomfortable to talk about money. Others are uncomfortable because they don't want to reveal how little they feel they make.

In either case, for some people there's an aversion to talk about income, and when the subject comes up, many people are likely to lie. I tell my family and others that we “make enough” or that “we're doing fine.” I hedge and move on. Others, though, lie about their income. I know someone who makes a very nice income, and he tells others that he makes less than he does. He doesn't want others to realize his net worth, much less his income.

Others, though, lie to make it appear as though they make more money than they do. The COUNTRY Financial survey points out that 10% of people have bought things they can't afford in order to look as though they are more affluent. If money = power/importance/influence, than we all want to appear as though we're “keeping up” — even if in some cases all it means is that we're keeping up with debt.

Should We Be More Open with Our Finances?

One of the things that shocked me about my husband when we married was how open he was about our money situation. We had debt, and we didn't make very much, and he talked about it. It's true that I've been more open about my past finances now that they're in my past, but the talk about financial specifics still makes me uncomfortable. I just didn't grow up with those types of discussions, and I grew up thinking it rude to ask others about their money.

But maybe we need to be more open with our finances. If you knew that your neighbor's awesome new car came at the cost of a huge amount of debt and the sacrifice of a vacation for the next three years, would you still be envious? Too often, we just assume that we're “behind” when we see what others have. But what if we're not.

What do you think? Are you uncomfortable talking about money? Why?

5 Ways to Combat Rising Health Care Costs

By Miranda Marquit 2 Comments

Yesterday, I received a pleasant surprise when I went to pick up a prescription. I've been paying around $100 a month for this particular prescription, since it hasn't been covered. Ever. No matter my plan.

But thanks to the PPACA, it is now covered. I had to ask the pharmacist if there was a mistake.

While there are a lot of strong feelings surrounding the health care reform law, the reality is that it did lower my cost in this one area. Will my premiums go up? Probably. But they go up every year — and have been going up every year before PPACA. I haven't noticed a big difference since the implementation of the new health care law began taking effect.

What's certain is that, whether it's the fault of the PPACA or a combination of other factors, health care costs are going to keep rising. Here are 5 ways to combat those rising health care costs:

1. Take Care of Your Health

The best thing you can do to keep your costs under control is to take care of your health. Conditions like heart disease, obesity, Type II diabetes, and other chronic conditions are related to your health habits. You reduce your chances of these conditions — and the costs that come with them, resulting in higher premiums — by adjusting your diet and exercise habits.

While your premiums will always rise, they'll rise at a slower rate the healthier you are, and the fewer health services you need.

2. Choose a High-Deductible Plan

A high-deductible plan can help you reduce your health care costs if you have few needs in that direction. Remember, though, that with a high-deductible plan you have to pay more out of pocket. You'll need to run the numbers to see if this works for you. My family of three has very few health care needs, so we have a high-deductible. We have yet to meet our deductible, but we still pay less each year, even with the out of pocket spending, since our premiums are much lower than what they used to be. You need an emergency fund that can handle the deductible if you go this route.

3. Make Use of a HSA

Your Health Savings Account (HSA) can be a great tool. If you have a high-deductible plan, you can contribute to a HSA. Not only do you get a tax deduction (I maxed my deduction out in 2012), but the money in the HSA also grows tax-free when used for qualified health care expenses. This can be a great way to offset some of the rising costs of health care.

Likewise, you can use a Flexible Savings Account (FSA) for the tax deduction. It's a good way to save up for health care costs, but remember that the FSA is “use it or lose it” each year, while a HSA rolls over year to year.

4. Ask for a Discount

You can save on hospital bills by asking for a discount, as well as receive other discounts. Some hospitals will lower your bill if you demonstrate financial hardship. Others can provide you with an affordable payment plan. We don't have dental insurance, but, since we pay with cash upfront, our dentist gives us a discount. We've also received discounts on eye care and visits to specialists.

5. Join a Discount Program

This is not insurance, but it can be helpful in certain instances. Join a discount program for prescriptions or other care, and you pay a small fee each month, but receive discounts that can make a difference in your out of pocket costs. Just make sure you run the numbers, and verify that the items you want covered are part of the program.

Road Trip! 3 Ways to Save Money and Have Fun

By Miranda Marquit 1 Comment

One of my favorite ways to travel is via the road trip. Depending on your situation, a road trip can be cheaper than flying. And if you really plan it right, you can have fun and save money in the bargain.

1. Your Car

If your car has been well-maintained, it will get better gas mileage. This can save you the longer your trip is. On top of that, you are less susceptible to breakdowns in the middle of nowhere. I once had a $435 tow bill because my car broke down in the middle of nowhere. Keep your car properly maintained, and you'll always be ready for a road trip.

Also, consider taking the most fuel-efficient car possible. When we go on a trip as an entire family, we take the Prius. It costs us a lot less in gas. However, sometimes (like when my son and I are camping), it makes more sense to take the Subaru, even though the gas mileage isn't as good. Consider your needs, and the size of your family, and decide what would work best for you when it comes to saving on a vacation.

2. Accommodations

road trip savings Next, you have to figure out where you will stay — and how you will pay for it. I'm on the mailing lists at some of my favorite destinations. One of the realities is that my son and I are likely to spend a night or two in Las Vegas during spring break because it's conveniently located on the way to our destinations. I receive deals all the time for rates as low as $21 a night in Strip hotels (like Excalibur, which my son loves). Even if I get “fancy”, I can usually find something for $60 or $70 a night.

Another option is to camp. I live in the west, so there are usually plenty of low-cost campsites along the way. As long as we're not particular about bathing, it's possible to camp and save money on accommodations.

Finally, there are always rewards programs. We belong to a couple different rewards programs, and we have managed to earn a few free nights, just by doing what we normally do. Add in savvy credit card use, and you can earn points much faster. My parents used this strategy very well to get free night stays on trips.

3. Food

How are you going to save on food while on a road trip? Personally, I don't get too fussed about this; I love eating out, and trying local “cuisine” is one of my favorite things to do. But if you want to avoid spending money on restaurants, you can head further into town and hit the grocery store. Better yet, fill a cooler with condiments and sandwich fixins and you are set no matter where you are. This was how my parents fed us on road trips. They often changed the ice out at the hotel, or with the help of an inexpensive bag of ice at the gas station.

Another strategy is to go during lunch, and make your own meals for dinner. Lunch is usually cheaper, especially for a larger family. Eat lunch at the restaurant, and then cook dinner in your hotel room microwave, or bring a small grill or hibachi with you (make sure you'll be able to prepare food outside).

What are your favorite tips for saving money on a road trip?

Live Like No One Else

By Contributor 1 Comment

There is a saying Dave Ramsey likes to use: “Live like no one else, so later you can live like no one else.” The general idea behind this statement is tips on how to live correctly right now so that you can have the most fun later on life. While there are people who prefer the live in the moment type of thing, there are others who want a secure and successful future, and those are the people who would want to know how to effectively live like no one else so that they can ultimately live like no one else later in life.

Start Saving Now

You may have heard the phrase, “Work Now, Play Later.” If you are looking to live like no one else in the future, this is something you are going to need to follow. While it does require time and effort, along with plenty of work, you can start saving now to secure your future and ensure that your future looks promising, exciting, and full of fun. There are so many ways that you can begin saving right now. Opening up a savings account right now would also be a good idea. You can regularly contribute money to your savings from your paycheck and avoid touching your savings. The account will continue to accumulate with money for your future. Even if you can only put $10 or $20 into the account each week, this amount of money will add up. You should also start holding onto your change, allowing it to add up, and then depositing into your account as well.

Eliminate Unnecessary Spending

There is a fine line between wants and needs when it comes down to spending. There are certain things that you obviously need, such as housing, food and water, and hygiene products. However, there are other things that you do not really need and you can do without, which include brand new shows and clothes, expensive makeup, brand name bags, and fast food. You can save a lot of your money by making cuts and holding onto your money instead of spending on things that you do not truly need and may not even really use.

Cut Coupons and Follow Frugal Tips

Cutting coupons can drastically reduce the amount of money that you do end up spending on your necessities, including your groceries and bathroom supplies. You can find coupons in your local newspapers and also on different online websites that are specifically designed for the purpose of providing people with coupons to save money. There are also lots of frugal living tips that you can follow to start saving your own money. For example, some people are making their own dish soap and laundry detergent. While these products are necessities, if you can make your own with a few household ingredients at less than half the price you would pay for a bottle of dish soap or laundry detergent, it would be a good idea to give it a try.

If you want to live like no one else in the future, meaning living without worry and having plenty of finances to take care of things that you need and want, it is important to start saving now. The more you are able to cut back on and save right now, the better you will be able to live in the future.

Tax Issues to Consider During Retirement

By Miranda Marquit Leave a Comment

When most of us plan for retirement, we think ahead to how we will generate the income needed to sustain our desired lifestyle. We add up costs, and try to determine if we are saving enough each month for a nest egg that meets our needs.

However, many of us forget that it's important to consider the cost of taxes. Your tax situation can have a big impact on whether or not you ultimately reach your retirement goals.

Here are some of the tax situations that can affect your tax bracket, and affect your overall wealth:

Distributions = Taxable Income

Unless you have a Roth account, your retirement account withdrawals count as taxable income. Depending on how much you withdraw each year, you could see an increase in what you owe. Your distributions could put you in a higher tax bracket.
Tax Issues In Retirement
If you have relatively modest retirement needs, then this usually isn't a huge problem. Modest living can mean that you end up in a lower tax bracket during retirement. However, if you are still meeting debt obligations, and if you are pursuing expensive hobbies or travel, you might need to withdraw more money in order to meet your requirements. This means higher taxes, especially if you continue to work during retirement on top of withdrawing money from your account.

Required Minimum Distributions

Maybe you don't necessarily need to withdraw a lot of money from your retirement account. Once you reach the age of 70 1/2, though, what you require during retirement might not matter so much. You have to take required minimum distributions (RMDs) from every retirement account except a Roth IRA.

These RMDs are figured based on your life expectancy and the size of your nest egg. If you don't take the required amount each year, you are hit with penalties. However, taking the RMDs can lead to putting you in a higher tax bracket.

Rolling Your Retirement Account To A Roth IRA

Almost all of these tax issues can be solved by rolling your qualified retirement account over to a Roth IRA. You don't pay income tax on your Roth IRA withdrawals, and you aren't forced to take RMDs with a Roth IRA.

However, rolling over your retirement account comes with its own tax consequences. While anyone, at any income level, can roll over a qualified account, there are still tax hits. First of all, if you have your money in a deferred account, you haven't paid taxes on your contributions, so you will have to remedy that situation. The IRS will consider the amount you roll over as income, and you will be taxed at your marginal rate.

You can roll all of the money over at once, and pay the taxes to get it over with, or you can roll over a portion of your retirement account a little at a time to spread out the tax impact. Before making the decision, consult a knowledgeable financial professional about the tax implications. You should work out a plan that helps you minimize your taxes in retirement.

What Do You Think About Telecommuting?

By Miranda Marquit 4 Comments

Recently, Marissa Mayer, Yahoo's CEO, instituted a new plan to bring telecommuters back into the office. Following suit, Best Buy just announced that it, too, will rein in telecommuting.

In recent years, technology has given rise to more flexibility in the workplace. The ability to work from home — at least some of the time — has led to something of a revolution. More companies offer the telecommuting option, and the flexible hours option, as perks to workers who want to be able to plan their lives around what works for them.

However, this move for Yahoo seems to be paving the way for a bit of a throwback. Job seekers might find that companies aren't as willing to accommodate them, especially if this move manages to re-energize Yahoo and help the company.

How Much Abuse Goes On With Telecommuting?

What Do You Think About Telecommuting? The big question that many are asking is whether or not there has been abuse with telecommuting. While there are some studies that indicate telecommuting can increase productivity, the fact remains that some workers are going to abuse the privilege.

For some, working from home is an ideal solution. I like working from home, and I have found that I am much more productive here at home than I ever was in an office. But there are some differences. For one, I am self-employed now, so it's up to me to make sure that I get my “paycheck.” In the office, I was working for someone else, and sometimes just did the minimum required for my minimal pay.

How much abuse actually goes on with telecommuting is hard to measure since there isn't someone there to see what is happening. Yahoo claims that there was some abuse happening with the policy, and some Yahoo employees seem to back up that view. Bringing more employees back into the office, under the eye of managers, seems like a solution in cases of abuse.

Does It Matter If You Get Your Work Done?

In my case, it doesn't really matter when I do my work, as long as I get it done (by the deadline). With many companies, the situation is similar. As long as telecommuters are getting their work done on time, does it really matter if they spend half the day in their pajamas, surfing the web? Does it matter that they are working on side businesses at home?

Where you fall on this subject might depend on what you think about how workers are paid. Those who are paid a salary, and expected to just fulfill project requirements, might get away with a little more. But what about hourly telecommuters who charge for their time — although they might be doing something else with it?

It's a sticky situation that can't really be resolved without adding software to personal computers that some might think an invasion of privacy. But what you do on company time still matters, even if you aren't on company property.

Personally, I think telecommuting can be a great thing. Providing a flexible schedule where workers can telecommute one to three days a week could allow workers to still come into the office for “team building” while still having the ability to work from home as needed.

What do you think? Is telecommuting a good idea?

Main Menu