by Andrea Carson | May 24, 2023 | Finances
One of the great benefits of online banking is automatic bill paying. Your bills are paid automatically on a preset date each month. A checking account or credit card can be used as a payment source. If you struggle to pay your bills on time or can’t find the time to deal with your finances, automatic bill paying is one possible solution.
It’s comforting to know your bills will be handled each month with a minimal amount of effort on your part.
Automatic bill paying has several advantages:
- Your credit score might improve. Many people find that their credit scores improve after a few months of paying bills automatically. Late payments should be a thing of the past, provided you adequately fund your checking account. Late payments are a primary cause of lowered credit scores.
- You’ll save money. Paying your bills on time means a few late charges. It also reduces money spent on checks, envelopes, and stamps. How many times have you been unable to find a stamp at home?
- Automatic bill paying saves time. You won’t need to sit down and make time for bill-paying activities. Though it’s not an excuse to put your bills out of your mind completely, you’ll spend less time and energy worrying about paying them.
- It benefits the environment: no more paper bills, checks, or envelopes. You’ll have less impact on the environment and save a few trees. The mail carrier won’t burn gas to deliver your payments, either.
- Identity theft continues to be a significant issue nationwide. While taking care of business online isn’t foolproof, far more effort is needed to keep your financial information safe. Sending snail mail with your account and credit card numbers available to credit thieves is always a risk. There’s a lower risk of identity theft.
There are many advantages to paying your bills automatically. Unfortunately, there are a few disadvantages, too. Consider both before making a final decision.
Consider the disadvantages of automatic bill paying:
- It can be challenging to stop payments. Automatic payments set up with your bank are usually easy to control. However, automatic payments set up with a credit card or with the merchant can take a lot of work to stop. Be sure to investigate the process for ceasing payments. In many cases, written notification is required.
- Excessive credit card debt. If you’re using a credit card as your auto payment vehicle, you can quickly rack up a lot of debt. Keep your eye on your balance and pay it in full each month.
- The costs can be higher. Most automatic bill paying services are free or very inexpensive. However, some do charge high fees. Some merchants also charge high fees if you want to pay your bills automatically. Be sure the costs are reasonable.
- A need for more awareness. Do you know how much your bills are each month? Can you ensure you have enough money to cover the bill? When your bills are paid automatically, you may lose awareness. Review your bills and your bank account balance regularly.
There are a few disadvantages to auto bill paying, but the benefits outweigh the risks for most. Time and money savings are significant advantages over paying your bills manually.
Maintaining awareness of your bills and the balance of your payment vehicle is crucial. Spend a couple of minutes each week monitoring the situation.
Automatic bill paying can save time and money and improve your credit score. Consider adding this helpful tool to your financial tool belt.
by Andrea Carson | May 10, 2023 | SAVE MONEY
Getting a job offer is always an exciting time. Whether you’re getting your first job, a promotion, or changing careers, there’s a lot to be happy about. But it’s always wise to consider the financial aspect of any decision; starting a new job is no exception.
Before You Accept the Job
- Negotiate your pay. It never hurts to ask for a little more money. Respectfully asking for more money doesn’t cause any harm. Remember that any salary increase you can get now will only compound your future raises.
- Negotiating is the highest-paying activity you’re likely to take part in. Consider that a minute or two could result in thousands of dollars in additional income for many years. When did you last make that much money for a couple of minutes of work?
- Ask about the benefits. Typically, you’ll be told the general aspects of the company benefits. Be bold and ask for details. For example, some medical insurance plans are much more expensive than others. A job with a slightly lower salary might be much better when you have all the details.
After You Start Your New Job
- Deal with your previous 401(k). Roll the money into an IRA or your new 401(k). Resist the temptation to withdraw the funds; the tax penalties are significant. Ask your new human resources department about your options and make an intelligent choice.
- Keep your lifestyle in check. Just because you get a raise doesn’t mean you have to buy a more expensive house or car. You can save a lot of money if you can maintain your spending level for even one year. If you do increase your lifestyle, then be sure to bank at least part of your raise.
- Getting a raise is an excellent opportunity to save money or aggressively pay down your debt.
- Start paying yourself first. Set up your bank account with automatic savings of part of your increased income so you start saving money immediately. It will be easier to start saving now than later because you won’t miss money you’ve never seen.
- Ensure you’re withholding enough for taxes. It’s not financially wise to get a huge refund every year. On the other hand, it can be economically and psychologically challenging to pay more tax time. Be confident your withholding is enough to guarantee a small refund each year.
- Make benefit choices wisely. Set up your life, health, and disability insurance and other benefits intelligently for your own unique needs. Your life insurance needs will vary depending on your family situation. For example, the most expensive medical plan might not be the option you want if you’re young and in perfect health.
- Have your paycheck deposited into an interest-earning account. Interest rates are so low right now that it might not matter much, but depositing your paycheck into an account that pays interest makes sense. You can always transfer what you need into your checking account later.
Being financially healthy is the result of making wise decisions consistently. A job opportunity is a time for celebration; ensure you’re making positive financial moves to take your best advantage of this occasion.
by Andrea Carson | May 3, 2023 | Credit Cards, Uncategorized
Credit cards come with several hidden benefits. Are you aware of some of the perks of using your card? Credit card companies offer multiple bonuses to help you get the most out of your card.
Check the terms of your credit cards for these benefits:
- Roadside assistance. Did you know credit cards often offer roadside assistance similar to AAA?
- This perk varies considerably based on your credit card provider. Companies either offer free service or a paid service. You must carefully check the policies as you sign up for this perk.
- If you’re stranded and need help, roadside assistance can rescue you.
- Longer warranties. Your credit card may extend your warranties. Did you purchase an appliance or electronic device with your favorite credit card?
- Protection from cancellations. Did you miss your concert or play? Credit card companies can refund the money you spend on tickets. However, you have to use the card to make the initial purchase.
- Even if it’s your fault you missed an event, you might still get a refund. Some carriers only provide this service, so check your card before you claim this benefit.
- Exclusive access while you travel. The fancy airport lounges can be yours if you have the right card.
- Credit cards can offer you the chance to stay in the best airport lounges and hotels at no extra charge. These exclusive offers vary greatly based on your card, but many will grant you special access. Enjoy a unique cocktail or appetizer while you wait for your next flight.
- Extra help while you travel. The lounges are just one travel benefit. If you have an emergency while you’re traveling, credit cards can help you. They offer services such as insurance to help you if your luggage disappears or your phone is lost.
- Companies can offer assistance in several ways. They may replace the luggage or send you money so you can replace it yourself. They may also help you track down the bags.
- Replacing stolen items. Was an item you purchased stolen?
- If one of your purchases is stolen, credit cards can help you. You can report it to them if you paid for the item with a credit card. This will vary by provider, so check your card.
- Items that can be replaced vary from electronics to furniture. However, only some things are covered. For example, stolen food is covered by only some cards.
- Help return items. The sweater you purchased is too pink, and the shoes are too tight. Your credit card can help you return these items.
- If the person or business refuses to return the items, the credit card will refund it anyway. This is done within 90 days of the purchase.
- You must save the receipt and tags to ensure everything is covered.
- Credit cards limit how much money can be refunded, so costly items are usually not covered. In addition, some things like food may not be a category that falls into the help section.
Credit card perks are often hidden in the fine print. However, you can benefit significantly by being aware of these benefits.
by Andrea Carson | Apr 26, 2023 | SAVE MONEY
Children can benefit from financial education at an early age. Researchers share it’s crucial to start primary finance education by age 3. A study from the University of Cambridge, “Habit Formation and Learning in Young Children,” found that money habits are formed by age 7.
Children pick up money habits quickly, so giving them the right direction is crucial.
- Start with basic currency literacy. A study from Yale University found that children can recognize and remember coins by age 3.
- Educate your children about the different coins and dollar bills.
- Consider teaching them about foreign currencies during vacations. This will expand their minds and help them learn more about the countries you’re visiting.
- Create money jars. Money jars are a fun and easy way to educate your child.
- You can create three types of money jars for spending, saving, and giving, covering the fundamental lessons of understanding how to use money.
- Teach your children the three jars and why they’re essential.
- Use the jars to separate money after birthday gifts or allowance payments. Children will learn how to save for the future.
- Use the giving jar for charities. Children will learn about giving and understand how they can help others with their money. They can donate the funds to local animal shelters or food pantries.
- Use coupons. Coupons can provide an essential lesson on saving.
- Cut coupons with your children’s help and leave them in charge of handling the papers at the store.
- According to the Children’s Financial Network, kids as young as five can benefit from learning how to use coupons in a store. They will see how to save money and make wiser shopping decisions.
- Set a money goal. Children can set a money goal to purchase a favorite toy or other item.
- Money goals are an easy way to teach children financial patience. They also provide a lesson on how to save money.
- Setting realistic goals is essential, so children will be motivated to stay on a savings plan. If the toy they want is expensive, reaching their goals can take a while. Will they stay interested? Picking smaller and less costly targets is better.
- Go shopping. Let your children use their spend jars at the store to make purchases.
- How will your children spend their money? Will they use their entire jars at one store or spread them out over many shopping trips? Shopping provides an easy lesson setting.
- An outing to the local toy store also lets you discuss comparison shopping. Point out different prices on similar items and teach your children about finding inexpensive options.
- Evaluating the results of the shopping trip will help them understand their choices. How will they restock their spend jars?
- Use yard sales. Yard sales offer another way to educate children about finances.
- Yard sales can help you clean out your children’s rooms and teach them about money at the same time.
- Ask your children if they want to participate in the yard sale by selling their old toys or clothes. Help them select items they no longer use and find reasonable prices. They can use the experience to refill their money jars.
- Older children can help sell items at the sale. They can keep track of change and watch customers. This is also a valuable opportunity to learn about price negotiations with customers.
Finance education can begin before your children are in school. They need to understand basic money rules and form the proper habits.
by Andrea Carson | Apr 19, 2023 | Retirement
You’re aware that it’s essential to save for your retirement. For most of us, 100% employer-funded pensions are long gone, and Social Security is only designed to offset a portion of your pre-retirement income.
Most financial advisors recommend that workers save enough to cover 75 to 85 percent of their annual pre-retirement income. With stagnant incomes and rising expenses such as healthcare, food, and housing, it’s challenging for most of us to save for retirement!
Luckily, you can boost your retirement savings, regardless of your age or how strained your existing budget might be.
Use these steps to increase your retirement savings and secure your financial future:
- Save now. Start now if you still need to contribute to a 401(k) or another employer-defined retirement plan
- Start small if traditional contributions of 10% of your income are too much to handle. Try saving just 1 to 2 percent of your gross income. Boost your savings each year by increasing your contribution rate to match the amount of your annual raise.
- You have a 100% instant return on your investment when your employer matches a percentage of your 401(k) contribution. When you enroll in your employer’s plan, contribute at least the minimum to qualify for any match your employer offers.
- Open a traditional or Roth IRA if your employer doesn’t offer a 401(k) plan. Traditional IRAs can help you lower your annual tax bill, free up hundreds of additional dollars to increase your retirement savings. Resist the urge to spend your savings!
- Work longer and retire later. Delaying retirement will boost the amount of your social security benefits and give your savings extra time to grow.
- Early retirees see a permanent reduction of 20% of their estimated benefits. By delaying retirement, you’ll draw a more considerable benefit from Social Security and shorten the length of time that you’ll need to draw upon your retirement savings.
- As you approach retirement age, look for ways to create additional income streams separate from your primary occupation, such as freelancing or starting a small business. Increasing your revenue streams frees up more funds that you can use to bolster your retirement savings.
- Get out of debt before you retire. Debt payments often comprise a large portion of most budgets. Debt also eats up funds that you could use for retirement savings.
- Create a realistic, workable budget that eliminates your debt over a specific time frame.
- Aim to be out of debt before you retire so that you need to save less for your retirement.
- As you decrease your debt, the challenge is to remain disciplined rather than going into debt again or wasting your retirement savings on other expenses.
- Downsize before retirement. As you create a budget, take a hard look at how much your home is costing you. Is it time to consider downsizing to a smaller place with lower costs?
- Many of us relocate during retirement for a warmer climate or to be closer to children and grandchildren. Consider selecting a smaller home with lower costs for operation and upkeep if you move.
- You can downsize more than just your home. Sell off unused items and use the proceeds to boost your retirement savings.
Finding ways to save money for your later years can be difficult and time-consuming. However, following these tips makes increasing the money you save for retirement easier.
