As history has shown, a bank account isn’t always the best way to build a nest egg. Inflation and sub-par banking practices have forced many to adopt other mediums of finance such as cryptocurrencies. Many, however, still believe that their bank account is a secure medium for saving. To maximize the benefits of maintaining a bank account, several methodologies (albeit unconventional) must be adopted. Continue reading
Everyone loves to travel but not everyone can afford the luxury of time or the monetary costs of journeying through “unchartered” lands. With increasing competition in the travel industry, travel has become more affordable. With a few hours of desktop research, a few calls, and some good old budgeting, one can get ready for that next trip to Dubai. Continue reading
We all know that we should be saving for retirement. Whether you have a 401k, a pension, or an IRA, retirement accounts give individuals great tax breaks to help them prepare for their golden years. It is often reported that people misjudge how much they will need in retirement. The rule of thumb for a long time has been you need your retirement income to supplement 80% of your income when you were working; however, this number is different for everyone based on a number of factors. One thing is certain. Maxing out your retirement accounts never hurts. For 2017, the IRA contribution limits stayed the same as they were in 2016. You could contribute up to $5,500 towards your IRA, and if you were 50 or older you can contribute an additional $1,000 bringing your total yearly contribution limit to $6,500. The 2018 Roth IRA contribution limits won’t be released until October of this year, but we can speculate what they might be.
Each year, the Internal Revenue Service (IRS) sets the income and contribution limits for IRA’s. The last year that the IRS raise the contribution limit was for the tax year of 2013. The contribution amounts for traditional and Roth IRA’s are the same each year. They are evaluated and raised based on inflation. The IRS will raise contribution limits in increments of $500. This means that the next time they are raised, people under the age of 50 will be able to contribute a maximum of $6,000 a year to their IRA, while people over the age of 50 will be able to most likely contribute $7,000 a year. In order for this raise in contribution limits to take place, inflation would need to be around 9% over a period of time for this to occur.
9% of $5,500 = $495
This would be near the $500 increment level the IRS would like to see to raise the contribution limits.
Since the last time the IRS raised contribution limits in 2013, inflation has risen by about 6.5% based on data tables. This means that another 2.5% increase in inflation would be needed for the IRS to raise the contribution limits for traditional and Roth IRA’s. With all of this being said, the most likely scenario is that 2018 Roth IRA contribution limits will remain unchanged. A more likely scenario would be a raise in the contribution limits for 2019.
Despite the fact that the 2018 Roth IRA contribution limits won’t change, the IRS will still probably change some limits. The limit they will change, and almost always do, is the income limits associated with eligibility for participation in IRA’s. For 2017, the IRS raised the income phase-out limit to $118,000 for single earners and $186,000 for married, joint filling earners, raises of $1,000 and $2,000 respectively.
There are still many months to wait until the IRS reveals their 2018 Roth IRA contribution limits. An increase in the limit would allow individuals to save an additional $500 a year in a tax-advantaged account. Although an increase is doubtful, we can still remain hopeful.
Budget Smart, Invest Wise
Spring is finally here, regardless of whether it feels like it outside or not. Around this time of year, many see it as their obligation to go through their homes and rid themselves of unnecessary items that clutter the place up. The idea that a clean and happy dwelling is a rebirth and a new start. Why not take this same approach to your finances?
At the start of every calendar year, I always suggest creating a new budget for the upcoming year. Mapping out your income and expenses presents saving opportunities and fiscal responsibility. We are now almost three months into the new year and expenses sometimes change. That is why I always do a financial spring cleaning. Below are my favorite three ways to do a financial spring cleaning:
Financial Spring Cleaning Tip 1: This first tip is directly related to a normal spring cleaning of the house people already do. Go through your closet and determine which clothes you don’t need anymore. Maybe you have shoes you don’t wear, pants you’ve outgrown, DVD’s you no longer watch because of a Netflix subscription. Or a lot of cravats and bow ties that are now out of style, or men’s bracelets that you aren’t using any more.
Gather up these items and donate them to a local shelter like The Salvation Army. Not only will you eliminate these useless items from your place, but you will be giving to those who could benefit from such items. The best part about all of this is most of the times you can receive a tax deduction for your donations. This can lead to a higher income tax return for the 2017 year.
Financial Spring Cleaning Tip 2: Clean out unnecessary clutter in your budget. For example, maybe at the beginning of the year you signed up for a gym membership you no longer use. Cancel it. Go through the various categories in your budget and see if they are relevant to the remainder of the year going forward. Perhaps you dedicated a portion of your budget to pay off debt, but now you no longer have that debt. Eliminate that category. Eliminating categories in your budget makes it simpler and much easier to read and track.
Financial Spring Cleaning Tip 3: Review the dollar allocations in your budget. Say at the beginning of the year you were eating out lunch every day, but now you realize the many health benefits and cost savings of bringing your lunch to work. See if you can slash $30-$50 a month off your food budget. Shop around for car insurance. Perhaps you find the same coverage with a different company for $15 less a month. Eliminating a little bit of money from a few categories adds up and helps boost your savings potential.
Financial spring cleaning allows you to revamp your finances for the remainder of the year. Even if you haven’t done a good job of sticking to your budget, it is never too late. A financial spring cleaning can allow you to set up your financial priorities for the remainder of the year and gives you a clear financial conscious heading into the spring and summer months.
When I was picking stocks, I saw my portfolio lose 15% of its value in one day. Simply put, I had too many of my eggs in one basket or too many of my investment dollars in one stock. I wasn’t diversified. Sure, I could hit it big with a stock, but I could also lose. I saw the amount of time I was spending on picking stocks and knew it could be put to better use if I let the professionals handle my money.
My portfolio was under diversified, but many people also suffer from too much diversification of their portfolio or diworsification. Diworsification occurs when you continually invest in the same asset class and keep your risk low but hurt your overall return potential. It would be the equivalent of investing in many different mutual funds that only contained U.S. stocks. If you want exposure to the U.S. domestic stock market that is great, I highly recommend it, but pick a fund that gives you just that and move on.
My investment strategy has come a long way from my earlier days when I was picking and choosing stocks. I thought just like many that I could pick homerun stocks that nobody else could. I did well on some and poorly on others. I would come home every day from work and watch Jim Cramer’s show Mad Money. I soon realized that the effort I was putting in wasn’t yielding the rewards I desired. I quickly shifted all my investments to a mutual fund. Being young, I knew I wanted a large exposure to stocks. What better stocks to invest in than the U.S. Stock Market? Warren Buffett has been noted to say that when he passes he wants the remainder of his fortune put into a low-cost index fund that mirrors the S&P 500. That’s right, just one fund. If he wanted his fortune to be spread across many funds that mirrored the S&P 500 he would be subject to diworsification. I decided to follow Warren’s advice.
While my investment dollars are placed into a single low-cost Index fund that mirrors the U.S. Stock Market, not everyone will agree with this position, and that is fine. Investment advice can be given to you from a hired professional or you can decide on your own. My knowledge came about through the reading of numerous books. If you want to invest in South America, there are funds for that. If you want exposure to corporate bonds, there are funds for that. If you think that the pharmaceutical sector is the next big thing, then by all means find a fund that suits you for that investment. There are many ways you can invest your hard-earned money, but try and keep to the One and Done Philosophy when investing in mutual funds to prevent diworsification: Pick one mutual fund that covers the class or sector you are wanting exposure to and leave it at that. Not only does it simplify your portfolio, but it keeps you diversified and away from diworsification.
Let’s be honest, many of us lack the time or the money to cook unique, cost-efficient meals today. Whether you are a couple or a family, it is sometimes easiest to just eat out. Eating out on a regular basis can get very expensive. I recently received a Blue Apron free trial. I was eager to try and cook my way through a new and adventurous meal, something I wouldn’t normally eat.
As this was a Blue Apron free trial, I had nothing to lose. I had three meals delivered right to my door. All of the packaging was recyclable, and it came with a couple of nice reusable freezer packs. Here is my experience:
Meal: Chipotle-Glazed Meatloaf
What I expected: Blue Apron said the prep time for this meal was just 10 minutes with the cooking time of the meal being between 35-45 minutes. The card (included in the picture) came with a quick description of the meal along with all of the ingredients for the meal. Each ingredient listed even came with a picture in case you weren’t sure. The flip side of the card came with step by step instructions on how to prepare the meal and also some pictures to assist you along the way. I laid out all of the ingredients on top of my counter along with the card and began.
The Good: You have all of the ingredients you need to create a unique dish. If you tried to go to the grocery store and buy all of the necessary items to create something similar, you would spend way more than $10/meal. All of the items looked fresh and appeared top notch. Everything from the beef, to the potatoes, to the garlic looked like it had been prepared just mere days before. Finally, Blue Apron also pairs each of the dishes with a wine.
The Bad: While the meal card said the prep time was just 10 minutes, this was not the case. It took me about double that time to prepare the meal. The only way someone could have done the prep in 10 minutes is if they were highly experienced in the kitchen or if they had prepared this meal before. The meal also lacked a side of vegetables. While this might seem quite minor in the details, some healthy vegetables to go along with this meal would have made it complete. I ended up cooking some green beans to go along with the meat and potatoes. You also needed some cooking experience to help guide you through. I don’t believe these meals are for the complete rookie. For instance, you had to mince garlic, slice potatoes, and needed a few kitchen accessories to complete the meal.
Ultimately my Blue Apron free trial was a success. I was able to create a delicious, unique meal all by myself. At just around $10/meal, it is also a great value because the same ingredients would cost much more if you purchased them at the store. Downsides would be that it requires some basic kitchen knowledge and elementary kitchen items. This meal service is great for a couple who enjoys cooking together and wants to spend some time create different dishes and bonding over the experience.
Are you interested in Blue Apron? Get $30 off your first week using this link.
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Have you ever purchased something online only to find out there was a price drop three days later? Frustrated, you don’t even bother contacting the retailer because it’s time-consuming.
What if there was an app that tracked all the possible price changes, missed coupons, and better-elsewhere deals online and contacted the retailer on your behalf to get your money back?
Now there is! Paribus.co, pronounced pair-uh-bus, is a one-of-a-kind money saving app that does the work of finding better deals, coupons, and price changes for you.
In this Paribus review, you’ll learn how it works, how much it costs to use, and if it’s worth your time to sign up.
How does it Work?
Not only does Paribus find price rewinds and coupon deals that you missed after purchasing a product, but it also does the work of submitting a claim on your behalf to get money back.
Paribus links to your email account and searches for retailer-specific communications like purchase receipts or order confirmations.
Once it finds your purchases, it then scours the web for deals like:
- Price drops.
- Better deals with other retailers that offer price-matching.
- Missed coupon codes and promo deals.
If it turns out you missed a better deal, Paribus contacts that retailer and submits a claim on your behalf. This means, no more searching, printing, or managing proof of purchase statements. Just link your credit or debit card to Paribus so you can get your money.
Once you sign up, Paribus works in the background looking for emails from participating retailers and searching the web for better deals on the things you’ve already purchased. They’ll let you know if they find something.
How Much Does Paribus Cost?
Paribus is free to sign up and you get 100% of every refund. They don’t collect a dime.
Who is Paribus For?
If most of your everyday purchases are online, signing up for Paribus is a no-brainer. You should be using this app to automate money saving rebates. However, the places you are able to receive a refund are limited to the company’s eligible retailers, which is subject to change.
If you don’t buy things very often or most of your purchases are made offline, Paribus won’t be able to get you any refunds, and it’s probably not worth your time.
Is Paribus Worth it?
If you shop online a lot, absolutely! The more you buy online with Paribus’s ever-growing list of participating retailers, the higher your chances are of getting more money back. On average, Paribus can get you back $3-5 a month depending on your shopping habits.
The only issue people have with this app is the amount of personal information you need to give Paribus to reap the benefits.
Paribus assures its customers that all information remains private and is protected by bank-grade security. And it only searches your email for retailer-specific communications, nothing else. If you’re still worried about linking Paribus to your personal email, you could create a separate email account just for online purchase emails and confirmations.
Note: In October 2016, Capital One acquired Paribus which gives it another layer of security authority.
Are you ready to find out if retailers owe you money? You could be getting money back for most of your online purchases.
Let us know what you think in the comments.
Christine C. Renee is a self-driven money blogger and freelance writer who likes to tackle the areas of money, productivity, and all things freelance. Her main focus as a freelance blogger is to help businesses create engaging content for their online audience. Find out if her energetic writing style is right for your business.
This post was sponsored by Paribus.
We are currently in the heart of wintertime. January and February are the coldest months in the United States. While many people despise cold weather, many can agree that the snow which comes with it can be a nice compliment. Although summertime seems to be the time when most families vacation, a ski trip during winter allows some families to break the mold. Saving for a vacation is only half the battle. While having the available funds to do something enjoyable is important, finding a good deal is also just as important. I recently planned a ski vacation and will share my six tips on how I saved and budgeted for the vacation.
Saving for a Vacation Tip 1:
If you are like me and enjoy traveling with family and friends, then it is important to have a “Travel” category in your budget. Setting aside $100 or $200 every month for travel allows the funds to add up and allows you to have a couple of enjoyable vacations every year.
Saving for a Vacation Tip 2:
Vacationing for many people means eating out every meal, which can get very expensive. Packing snacks ahead of time and a quick trip to the grocery store when you arrive can help limit your food costs.
Saving for a Vacation Tip 3:
Plan for transportation ahead of time. Booking a rental car before you arrive at the airport is often cheaper than waiting until you arrive at the destination to get one. Kayak.com is a great place to search for the best rental car rates.
Saving for a Vacation Tip 4:
If flying to a destination, use Google Flights to search for the best rates. Google Flights allows you to search many airlines at once and see the cheapest rates for the best dates.
Saving for a Vacation Tip 5:
When booking a ski vacation, book your lift tickets and ski or snowboard rentals online. Keystone Resort in Colorado offers online reservations to early bookers for a 20% discount. Additionally, you can rent your equipment cheaper online ahead of time as well. By booking my equipment through Christy Sports I was able to save an additional 20% versus the walk-in rate.
Saving for a Vacation Tip 6:
Lodging tends to be one of the more expensive parts of any vacation. Last year when I traveled to Hawaii, a night at a resort was close to $600 per night; however, a couple of friends and myself split a three bedroom Airbnb for less than $150 per night. Exploring your lodging options can help greatly reduce the cost of any vacation.
As you can see, saving for a vacation is a two-fold strategy. You first want to make sure you have the available funds. This is done by creating money in your budget. Secondly, you want to make sure you find the best deals out there. I have found that planning for a vacation ahead of time is one of the easiest ways to save on your trip. Meshing both of these aspects together can help create an enjoyable, budget-friendly trip for all.
Some have called compound interest the unofficial 8th wonder of the world. It is definitely wondered when it is applied to your financial life. The best part about compound interest is that it allows for the exponential growth of a portfolio. The concept is simple. When you earn interest/dividends/capital gains, you reinvest them into your portfolio instead of withdrawing the funds. The video shows just how powerful compound interest can be in increasing your wealth over time.
Budget Smart, Invest Wise
Reduce your taxes and increase your savings. Sounds almost a little too good to be true right?
It’s possible, it’s easy, and I just did it and so can you.
Today is the final day for you to file your taxes for this year. Did you pay more in taxes than you would have liked? Do you want to lower your tax bill for next year? If so, then here is how to do it:
Increase your 401k contribution to your company’s plan. What percentage of your salary are you contributing to your 401k currently? Bump it up. By increasing your pre-tax 401k contribution to your plan you are in effect reducing the amount of income you take home, thus reducing your tax burden.
I recently increased my pre-tax contribution percentage by 8% and found that I will save roughly $1700 this year on my taxes. It’s that simple. Increase your savings, reduce your tax burden. This offers 3 key benefits.
You lower the amount of taxes you will be paying for the year.
You increase the amount of savings you will have at retirement. The more you save now, the more you will have later.
Because you don’t see the additional money you put into your 401k plan on your paycheck, you won’t spend it, and most likely you won’t miss it.
Budget Smart, Invest Wise