Thursday, August 15, 2019

What to Do if your Job Doesn’t Offer a 401k

August 15, 2019 0
The importance of saving money for retirement cannot be overemphasized. You should save as much as possible and you should start saving as early as you can because this is the key to retiring when and how you want. Retirement goals are often accomplished by utilizing retirement savings accounts such as 401k’s.

A retirement savings account that your employer can offer you is 401k and it is one of the most popular forms of retirement savings and investment you can ever get. One of the major benefits of 402k is the tax exemption and another is that many employers will match your contributions.
The question is what are you going to do if your company does not offer 401k? The next thing is for you to look for other means of saving pending your retirement if your current job does not have many options available to you. Unfortunately, saving in a normal savings account isn’t typically going to cut it. In this article, we’ll discuss several other options you can consider to still grow and financially prepare for your retirement outside of employment benefits.

Start an IRA
A retirement investment account that you open as an individual outside of your employer is regarded as IRA. Additionally, you do not get some beneficial tax benefits with this type of account and there are 2 main types of IRA’s you can apply for:

  • Traditional IRA - With a traditional IRA, you don’t pay any taxes on the money you contribute. You will simply pay taxes on the money you withdraw during your retirement. The max you can contribute yearly is $6,000.
  • Roth IRA - With a Roth IRA, you pay taxes on your contributions today; but you don’t pay taxes on the money as it grows, and you don’t pay taxes on the money when you withdraw in retirement. The max you can contribute yearly is $6,000.
Seek other Investment Opportunities
Maxing out an IRA is still recommended even though you do not need to save via a retirement investment account alone. Once you are done with that, you can consider a brokerage account or normal taxable investment account. With this type of account, you will not see any special tax benefits, but you can supplement your retirement savings. Diversifying your stock portfolio can help, as well. Check with your employer to see if they have stock options available.

Look for Employment with Better Benefits
You will not be getting much benefit if you work for small companies or startups. Consider seeking employment with options that can help you when your need for retirement becomes a priority.

Self-Employment Opportunities 

You do not have the option of a 401k when you are self-employed. This does not mean that your retirement savings opportunities, it means that as a self-employed individual, you have more investment opportunities available to you. Below are some of these opportunities;
  • Solo 401k - A Solo 401k is where you act as the employer and the employee. You contribute up to 25% of earnings into the account as the employer, and the employee can add up to $19,000 annually to the account. The total limit for the year cannot exceed $56,000.
  • SEP IRA - A SEP IRA is very similar to a traditional IRA, except for you’ll be making contributions as the employer (you) and there are a lot fewer restrictions in place. For instance, you can contribute either $56,000 annually or 25% of your earnings - this is much higher than traditional IRA’s.

Wednesday, August 14, 2019

Grants Vs. Loans: What's The Difference?

August 14, 2019 0
Two popular ways to fund your college education expenses are grants and loans. They are both having big differences that you need to get acquainted with if you want to go through any of the two means to finance your college education. This article is to discuss the differences between grants and loans and the benefits of both of them.

Free money that can be awarded to students as a way of funding their education and are based on the meeting of certain criteria is known as grants. Some of the criteria include;

  • Being accepted for enrollment into a school as an undergraduate.
  • You are also expected to meet some financial qualifications and you will need to fill out a FAFSA form for that. 
  • You are expected to have a high school diploma or GED
  • Being a US citizen or a non-citizen who meets requirements
  • You also need to maintain a set GPA’s
  • Not being in default on any loans at the time of accepting and using a grant.

The Pell Grant is one of the most popular grants for students. There are other educational grants which include;

  • SMART Grant
  • Academic Competitiveness Grant
  • Federal Supplemental Educational Opportunity Grant (FSEOG)

One of the interesting and captivating aspect of grants is that they do not have to be refunded, however, the student that qualifies and uses the grant is expected to maintain a certain grade point levels and also the student should not exceed some financial levels for the grant to be valid.

Sums of money you can borrow for the purposes of attending college is known as loans; but unlike grants, loans will need to be refunded back with interest. A student loan can be combined sometimes to make up the difference in what is not covered by a scholarship or grant, or some students find their financial needs have to entirely subsist on loan. To apply for a student loan, you will be required to fill out a FAFSA form. Both Federal and Private institutions can give loans to individuals who apply for them. The different types of loan structures available are listed below;

  • Direct Subsidized Loans - With this loan structure, the government covers your interest while you are in school or in deferment.
  • Direct Plus Loans - Loans structured for students from the US Department of Education.
  • Direct Unsubsidized Loans - All interest accrued is the responsibility of the borrower and must be repaid.
  • Direct Consolidation Loans - The combination of multiple Federal loans.

Grant Pros and Cons

Pro: Because grants are not expected to be refunded, it is most preferable. This means students do not have to worry about making payments like they would do if it were a loan which incurs interest.
Con: The grant money received might not necessarily cover for every expense you need it for
Con: It can be difficult to qualify for and secure a grant.

Loan Pros and Cons
PRO: You will have more flexibility and opportunity available because you have more freedom of choice in how you use your loan in school.
CON: You have to repay the loan, sometimes repayments begin even while you are still in school.
CON: You will most likely have to repay your loan with interest.
PRO: Loans are much easier to secure than grants are.

It is advisable to prepare to utilize the two means of getting funds for your college education. When properly used, they can both be helpful. More information should be given to you when you apply to a college and are accepted on funding and what types of grants and loans available through the school to help you out with your funding. If you need more information or guidance on what to choose and how to proceed with decisions on your funding, don’t hesitate to speak to a guidance counselor in connection with the school who can give you some direction and help out with your choices.

Tuesday, August 13, 2019

8 Alternatives to Payday Loans

August 13, 2019 0
Everyone experiences times where loans are required regardless of your financial status or situation and these situations can sometimes be expedient. These situations can be as a result of emergencies or overwhelming debt among other things. It is essential that you choose the loan option that is least likely to negatively affect your current financial situation or severely impact your future goal when any of those needs arises.

An option regularly chosen by consumers who find themselves in a bind requiring urgent assistance is the payday loans. It is quite unfortunate that these types of loans are not always given with best interests in mind. In fact, this category of lending is often viewed as predatory and has a reputation for taking advantage of borrowers who can easily be faced with interest rates of up to 400%. Considering alternatives to payday loans is vital before making a decision. In this article, we’ll discuss some other options that may be available to you and why they may be more helpful in your situation.

Peer-to-peer lending
This form of lending has grown in popularity in recent times. Investors are allowed to fund loans fro borrowers using their personal finances in this type of loan. While you can secure pretty low-interest rates utilizing this loan format, it is mainly available to those that have higher credit scores.

Emergency Savings
This is the best time to draw on your emergency savings if available. You should typically use emergency savings to cover rent, healthcare, bills, groceries and other day-to-day expenses in the case of an emergency. However, situations vary; if you don't have emergency savings, and depending on the severity of the situation, you may also consider utilizing other savings accounts.

Pay Advance from Employers
This can be a good outlet for seeking assistance when you are hot with a financial emergency. It requires you having a good relationship with your employer. This emergency route is most beneficial because there is no need to pay back or worry about interest. It is simply you receiving your payment early with the expectation that you continue to work.

Negotiating Payment Plans
Most companies and even credit cards are willing to work out arrangements with you on payment of you are struggling. If you’re considering taking out a loan to facilitate paying your bills on time, try speaking with your creditors or utility companies first. Often, they can help you either delay when your payment is due or reduce the amount you owe with various programs they may have in place.

Credit Cards
You can use credit cards for emergency purposes but it is not highly recommended. It is however, better than getting payday loans. You won’t pay higher than 28-30% with credit cards but you will pay much higher interest with payday loans.

Credit Counseling
If your financial or credit situation seems out of control, before adding to the strain, consider seeking counseling. There are various credit counseling services available to you, often at no cost, which can help. The National Foundation for Credit Counseling can help lead you to a service in your area.

Personal Loans
You can take personal loan through your bank or a credit union. Doing this can help you secure lower interest rates which is still lower than that of payday loan. All you need to do is have a decent credit score. If you have a good relationship with your bank or credit union, you should really check this out. Short-term emergency loans are even offered which some members can utilize to help them become financially stable again.

Loans from Family or Friends
You can consider asking your friends or family for financial help if you have a good relationship with them and have not borrowed money before. Usually, they won’t charge you interest (or very little). However, you do need to be careful when going this route - don’t ask for too much and make sure you pay the loan back promptly and within the terms of your arrangement.

Monday, August 12, 2019

How a Health Savings Account Can Help You

August 12, 2019 0
Every penny counts when it comes to your health insurance especially these days where there is every-rising insurance rates and premiums and increasing hospital and drug costs. Trying as much as possible to save money with health coverage for you and your family is important and make use of every opportunity available to do so. One of these opportunities is getting a health savings account.
An essential way to set aside money to pay for insurance and your medical bills is by getting a health savings account (HSA). You would also be saving money on taxes through this process. This article is to give details of HAS and how it really operates.

What is an HSA?
You can qualify to open an HSA if you have a high deductible health plan or HDHP. You will be offered the option of opening this type of account sometimes by employers or health plans, but you also have the ability to open one privately at most financial institutions. The IRS however, has certain deductible limitations they have set that you will need to qualify for in order to open an HSA:

  • Individual out of pocket maximum is $6,500
  • Individual minimum deductible is $1,300
  • Family out of pocket maximum is $13,100
  • Family minimum deductible is $2,600

The amount you can contribute annually is mandated by the government even though you contribute financially to your account. The limitations are as follows:

  • Individual yearly contributions limits are $3,400
  • Family yearly contribution limits are $6,750
  • Seniors 55 and older can add $1,000 over the preset limitations
  • Seniors who have Medicare cannot contribute to an HSA

How Can You Use an HSA?
You receive either a debit card or checks when you open an HSA and this will enable you to use the money in your account at any time. These funds can be used to pay for copays, coinsurance, deductibles and other medical expenses. You cannot usually spend the money from your HSA on paying your premium payment and this is the only drawback of the HSA. You also need to be aware that any money spent on non-qualified health care costs is then subject to tax that you will be responsible for paying. The money that you have in your account never expires and can be continued to be used for qualifying medical expenses. Seniors who are no longer able to contribute can also still use the money in their HSA to cover medical costs.

What are the Tax Benefits of an HSA?
There are substantial tax benefits to having an HSA and the reason is because the money placed into the account is not taxed, the money taken out of the account is not taxed and the money has the ability to grow in your account tax-free as well. Another benefit is that your income will be taxed minus your HSA contributions, which lowers your tax responsibility. Utilizing an HSA can potentially be a large money-saving opportunity for you and your family and make it easier to afford proper health care.

Additional Investment Benefit of Your HSA
A unique investment opportunity is offered to you when you open an HSA account. It gives the opportunity of being able to invest the funds in your account into stocks, mutual funds and other opportunities. Your funds are not taxed when you invest in your HSA and you do not have any required distribution limitations. It does not need to follow guidelines in the Federal Insurance Contributions Act or FICA if your account is funded through a company payroll.

Meaningful Connections for Those in Need

August 12, 2019 2
Nowhere Else to Turn?
The gaps left between families in need and overburdened support programs are being filled by this resource. WithCauses is a charitable network that eases the hardships of those less fortunate by connecting them with charitable donation and touching lives of thousands of struggling individuals this way. The belief of the foundation is that “We all benefit from an investment in our Children and helping others”. This charitable network is able to lift people in need out of unfortunate circumstances through their steadfast mission.

A Helping Hand
WithCauses provides a Help Request form on their site for individuals that need someone to help them to briefly express their situation and indicate what they could use assistance with. On a case by case basis to determine if/how With Causes can be of help; each request is reviewed. There may be background and financial information that you may need to provide depending on the kind of assistance requested for. The type of assistance this organization provides varies and in the past has included the following:

  • Assistance For Homeless Families and Individuals
  • Direct Equipment and Financial Support for Disadvantaged, Underemployed, Elderly & Disabled
  • Family and Patient Support for those with a Serious Illness
  • Housing Development, Community Revitalization

Additional Support
Several other charities that provide assistance in various forms are being led by With Causes. Other charities include;

Application request forms are provided by each of these organizations on their website so you can share your story for review. You can find out how these organizations can make a difference for you and your family by visiting their website.

Similar to With Causes is a different charitable organization that provides hardworking individuals the opportunity to request financial help on their page. This charity was set up to help individuals with expenses related to Medical Bills, Phone Bills, Rental Payments, and other pressing needs.

Saturday, August 3, 2019

Get Help Paying Your Rent

August 03, 2019 8
The statistics of Americans who qualify as rent-burdened is steadily on the rise in the past fifteen years and it has doubled from 19% to 38%. The statistic shows that these Americans spend three-tenths of their income on rent. The alarming number of people that qualify as severely rent-burdened is at the rate of 17%. These percentages all indicate that millions of American families are struggling to afford rent payments on their homes. In this article, we’ll discuss some ways that you can find and secure rent assistance if you find yourself struggling to make your payments.

Charitable Grants

You have the ability to secure assistance from church organizations or nonprofits if your family is in need of emergency or short-term housing assistance. You can usually find assistance through local programs, but there are national programs as well. Bear in mind that these programs are typically limited to those facing eviction or who need emergency services to help in the short-term.

Short-Term Housing Assistance
You can apply for short-term rental voucher assistance or subsidy programs if you are in need of rental assistance for 3 months or less. Check with your state’s local housing authority on what’s available to you. You can also contact the 2-1-1 hotline in order to see what programs may fit your needs.

Long-Term Housing Assistance
You can get such assistance through HUD’s Section 8 low-income housing programs. Qualifying for this process can be lengthy and you may need to join a waitlist, but it’s worth checking into see if you qualify for this program. You can also check with your local housing authority to see what programs are available to you and your family. They may have certain housing developments, or homes, within your city or state that are available to you for lower rent options.

Rural Rental Housing Assistance
This is limited to certain areas and in general rural areas. The assistance is for use when an individual or family is spending 30% or more of their household income on the monthly rent. The USDA also often has lower rental opportunities available to families that qualify.

Trade Labor for Rent
If you’re willing and able to work for lower rent, you may consider speaking with your landlord. There may be opportunities for you to provide labor in exchange for a discounted rental rate. Some ideas could be:

  • Cleaning the grounds
  • Lawn Mowing
  • Shoveling snow
  • Gardening
  • Painting
  • Repairs

If you are skilled in a particular area, like plumbing or electrical work, this can also be of benefit to you in negotiations.

Speak to Your Landlord
Negotiating your rent with your landlord is possible sometimes. Try speaking with your landlord to negotiate a modified payment if you are going through financial difficulty or you are finding it difficult to pay your rent.  Your landlord may be able to spread out your rental payments over a longer period of time than the 12 or 24-month agreement, thus lowering your monthly payment obligation. Your landlord may be willing to renegotiate your lease agreement terms and lower your rental payments in total. Keep in mind that your landlord is not obligated to change your rental agreement or accept lower payments; however, it is worth a try.

Find a Roommate
Getting a roommate in order to divide the rent so it can be affordable can go a long way if your rental agreement allows it. Be sure to clearly define how costs will be split with your roommate and have them written into your lease agreement as well; including your roommate into your rental agreement is important because it holds them liable to the terms as well.