Category Archives: Budgeting & Money

LIFE 101 FOR THE NEW MILLENNIUM: Unpacking & Understanding Car, Life, & Health Insurance

Advice, Budgeting & Money, , , , , , , , , , , , , ,
car life health insurance
Photo by KnG Đà Nẵng/K&G Studio

Insurance may seem like a waste to some new grads, but it definitely comes in handy when disaster strikes. In this post, I’ll focus on three types: life, car, & health.

1. Life insurance – Personally, I don’t have a life insurance policy since I don’t have a spouse or children and have registered with my local public medical center for a body donation. But those with a family will probably want to leave them some funds for funeral costs, bills, debt reduction, a child’s college fund, etc. If life insurance is not offered by your employer, you can start by checking with your parents as far as finding good agent.

2. Car insurance – Once you are no longer a dependent of or living with your parents, you must secure your own car insurance. The cost of your car insurance will depend on many factors including your gender, where you live, and what you drive. The fewer accidents you claimed on your previous insurance you’ve had will help keep your rate down. Men can usually expect to pay a higher rate.

You may be able to get somewhat of a discount if you use the same insurance company your family does or if you use the same insurance company for as many of your different insurance policies as you can. You should be able to reduce your premium by paying your policy bi-annually or annually vs. monthly. Again, check with family or friends for a recommendation, and shop around for the best rate with an idea of how much you’d like your deductible (the amount you’re responsible for before insurance kicks in) to be.

3. Health Insurance – At age 26, you must secure your own health insurance. Going without insurance is tempting fate, and your yearly tax return will eventually be impacted under the current healthcare law, effectively penalizing you for not carrying health insurance.

It’s always cheaper to take the health insurance offered by your employer than paying for your own independent policy, and www.healthcare.gov insurance is usually not available to those who’s employers offer coverage. So get into your employer’s health and dental plans as soon as you’re eligible.

Depending on the plans offered, you can choose how much coverage you have. Usually the higher your deductible, the more you’ll pay before insurance kicks in (in the way of yearly minimums that must be met), but this can lower your monthly premium (how much your employer deducts from your pay for insurance.)

80/20 is a standard coverage figure you’ll often see meaning 80% of an expense (like an ER visit or surgery) is covered by insurance and 20% by you. Some employers offer Flex Spending Accounts, so look into taking advantage of that as well if you expect frequent doctor or specialist visits and/or needs for prescriptions. A significant savings on prescription drugs is included which is very handy for drugs that have high out of pocket costs (the cost to those with no insurance.)

 

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Looking for a new job? Want to get the one you want faster? Check out my new book, Here Today, Hired Tomorrow.

LIFE 101 FOR THE NEW MILLENNIUM: One Word – Taxes

Advice, Budgeting & Money, , , , , , , , , ,
taxes, tax return, filing
Photo by William Billard

A NOTE ABOUT THIS SERIES: My recent posts on budgeting got me thinking about a very helpful article I was given after graduating from college. It covered several important real world topics that new graduates take on after finishing college. Since most of the topics involve money, and that ties so closely to work and earnings, I feel this series will be helpful and relevant. Further, one of the core audiences my book can help is recent grads. Please pass this article on to anyone you know that is or will soon be a recent graduate.

The first type of tax I’m sure you’re familiar with is sales tax. With few exceptions, we all pay it on things we buy. It varies by state (here in Tennessee, we have one of the highest sales tax rates.)

Unless you’ve started your own business (see this earlier post ), the only other tax you should have to be concerned with at this point is federal income tax—and state income tax if your state has one. These taxes must be filed every year before April 15th. This table will help you determine whether you’ve earned enough taxable income to be required to file Federal.

When you start a new job, one of the forms you’ll fill out is a W4. This allows you to determine how taxes are withheld from your earnings. If you do have dependents, claim them. Claiming more dependents holds out less tax from each paycheck. So, if you’re filing as Single and you would rather sway toward not owing tax and more toward getting a tax refund each year, don’t claim Single and 1 (yourself as a dependent) on your W4; just fill it out for Single and 0. When claiming dependents, be sure you’re not claiming a dependent whom someone else is also claiming.

Most of you will be able to take the standard deduction. The standard deduction is a dollar amount or threshold that will factor in to how much tax you owe—or the amount of money you’ll get back as a tax return. This figure can vary year to year.

Keep track of how much money you tithe and give to charities and such throughout the year since some organizations may not send out a year-end summary for you, or you may end up missing an e-statement in your Spam folder. Also keep up with mileage driven for volunteer work you do. If you don’t have enough of these type items to surpass the standard deduction figure, you’ll use it to figure your taxes. Here’s more information from the IRS on the standard deduction.

Most of you should be able to use a 1040EZ form to prepare your taxes. You’ll need a regular 1040 form if your taxes are more involved; here’s a good article to help you determine which to use. You should be able to get these forms at your local library; call first to check, and save yourself a trip.

If your taxes are fairly simple, you can probably file them yourself on a site like taxact.com or turbotax.com. If not, you can use a local tax establishment like Liberty Tax or H&R Block; however, a freelance/independent tax preparer usually costs less. Ask your parents or social network for help finding a recommended one. Look for a tax preparer, not a Tax Attorney.

When you begin to file your taxes, you’ll need a 1040 form, your W2 forms from any job you worked, any 1099 forms you receive (forms issued for contract work if you’ve earned, in most cases, more than $600 in a year), all investment (some are various types of 1099s) and charitable giving statements you receive, and the total mileage you drove for volunteer work.

As you (or your tax preparer) enter everything for your federal tax filing, you’ll be asked questions about things like whether you bought a car or home during the tax year (your answers may factor into your tax return as well.) Then at the end, you’ll find out either how much you owe (this amount must be paid to the IRS and postmarked by April 15th) or how much the IRS owes you (how much money you can expect to receive back from the government.) You can choose a hard check or direct deposit (faster) by which to receive this money. Then, make sure to file your state tax return as well if your state requires one. Keep a copy of your tax return form.

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GUEST BLOG: MOOLAH MONDAYS: Give It Away

Budgeting & Money, , , , , , , , , , , , , , ,
giving, charity, sharing
Photo by Jeri Daking

I hope you’ve enjoyed the Moolah Mondays series and benefited from hearing about the system and methods I use and recommend. In wrapping up, here are some thoughts about money and giving by a long time friend of mine and fellow author, Gabriel Aviles.

If you were one of the 111.5 million people who watched Super Bowl XLVIII between the Seattle Seahawks and the Denver Broncos you witnessed not only a big victory for Seattle, but also the half-time show featuring Bruno Mars and the Red Hot Chili Peppers. The Chili Peppers performed one of my all-time favorite songs, “Give It Away, “a celebration of living a life of generosity and love.

Along with the Red Hot Chili Peppers, it seems that many Americans love to give. In fact, according to the Giving Institute’s “Giving USA” 2014 report, charitable giving exceeded $335 billion in 2013, up from $316 billion 2012!

Of course, this is not the case with all of us. Many of us hold back. Yes, we have that built-in desire to help people. We want to give to great causes, but these nice thoughts don’t always translate into action.

The reasons for not giving are many. First of all, we don’t see how we could possibly afford giving when we’re barely paying our own bills. We fear that if we give, we won’t have enough to cover our own needs. Some of us may not give because we are stuck in analysis paralysis. With so many good causes out there, we can’t seem to decide where to give. Others of us who are barreling forward with eliminating debt, saving, investing, and building towards a financially secure future, can’t get our heads around giving. It seems counterintuitive to give when we are determined to “get our own house in order.”

Finally, there are others of us who look to those appearing more fortunate than us to do the giving. Why should we be the ones to sacrifice when there are others, in our estimation, that can really afford to give? While these concerns and ideas may have merit, let’s explore what the Bible says about generosity and giving.

The principle of giving, specifically of giving to the needy, is foundational to the Bible. In the Old Testament, giving to the poor was part of the “Feast of Weeks,” a celebration of the first fruits of the wheat harvest. Part of this important celebration included field owners leaving the edges of their field unharvested and allowing remaining useful parts (“gleanings”) to remain after harvesting so that the poor could take them.

In the New Testament, we also find the principle of giving to those in need. In Luke 3:11, John the Baptist tells a crowd to share their food and clothing with those who need them, while in Acts 20:35, Paul also reminds us to help the impoverished and adds that it is better to give than to receive. Finally, in Matthew 22:37–40, Jesus also reminds us to love our neighbor as ourselves. In other words, if we wouldn’t let ourselves go hungry, we shouldn’t let our neighbors go without either.

Sometimes we want to give but are discouraged by the fact that we can’t give much. Once again, we can turn to the Old Testament Jewish feasts (Deuteronomy 16:13–17.) During these three feasts, God asks the men to bring a gift in proportion to the way that God had blessed them. In other words, even though He expected more from those that had more to give, the expectation was that everyone should contribute!

While we don’t give to the poor to get back, the Bible tells us that if we give, God will help us when we are in trouble. Scripture states that God will protect us from our enemies; he will preserve our lives, and restore us to full health.

Solomon, the wisest man who ever lived (and King David’s son), also gives us insight into the rewards for those who give to the poor. In Proverbs 11:25, he tells us that “a generous person will prosper.” Chapter 19:17 also says that God will reward us for lending to the poor, while in the New Testament, Paul adds that the generous will be made “rich in every way,” (2 Corinthians 9:10). So think about yourself. When was the last time you gave of your time or money? What holds you back from giving?

– Gabriel Aviles, author of the forthcoming book Man Upstairs LifeHacks: Money – A 60-Minute Beginner’s Guide to Rethinking Your Personal Finances (due Spring 2015)
manupstairs.com (coming soon)
Connect with or email Gabriel at Twitter: gaaviles@comcast.net

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