How to Work Together as a Couple to Get Out Of Debt

They say two heads are better than one. Well, not if those heads are butting over financial decisions like when and how to pay off debt.

Indeed, being on the same financial page as your partner is crucial. But when it comes to paying off your debt, this isn’t so easy. Take it from me. When my husband and I first started our financial journey, we had different ideas about how to approach debt. This created frustration on both ends and slowed down our progress. Eventually, we started working together and paying down debt aggressively.

To help you get on the same page as your partner right away, take a look at these 5 tried-and-true tips. Hopefully, this will save you time, money and frustration.

Be Open About Money

If you’re in a long-term relationship, it’s important to talk openly and honestly about money. Plain and simple.

If you have skeletons in the closet when it comes to your finances or debt, it’s time to come clean. Financial infidelity and miscommunication can lead to money fights and often make the situation worse. Instead, plan money dates and lay it all out on the table. What accounts do you have? How much do you owe independently and as a couple? Although you don’t have to combine debt totals, this is recommended if you’re married or already living together.

It’s also important to discuss how your debt makes each of you feel. From there, you can work on steps to get out of debt and develop better money habits.

Work Together to Make Lifestyle Changes

When you work together as a couple to pay off debt, you shouldn’t view it as his debt or her issue that is hindering you from making progress. Remember: you’re in this together.

If you feel like your partner is a spender, talk to him or her respectfully and suggest some changes you can make as a couple. Maybe you can encourage him or her to start packing lunches to take to work, and you can do the same. Or, instead of going out to dinner and a movie every Friday night, maybe you can get into the habit of cooking dinner at home and going for a bike ride or to a free concert in the park. Odds are, you both may need to improve your money management habits. Why not work on it as a team and support each other?

Jen Hayes, who runs the blog Frugal-Millennial, says it takes teamwork and dedication to pay off debt as a couple. Hayes and her husband started out with $117,000 of debt in 2013 and they’ve already paid off $88,000.

“We both reduced our expenses and increased our income. We cut back on expenses by renting a room from my parents, driving an 18-year-old car, and finding free things to do for fun,” she says.

Hold Each Other Accountable

Paying off debt often takes time and requires sacrifice.

To this end, knowing that you’re not alone can be motivating. For this reason, think of each other as an accountability partner. My husband and I, for example, commit to weekly finance dates. This is a time when we talk about money in our household and discuss our debt repayment progress report. Checking in often reminds us that we need to stay on top of our goals – together.

Find Flexible Ways to Make More Money

When you put your debt balances together, you may be in for sticker shock. But, here’s the good news: your double income can help you pay off this debt faster.

You can also boost your earnings and improve your financial habits. For starters, if you and your partner both work, you’ll already have two incomes to consider when budgeting for debt payments. Then, if one or both of you start bringing in extra money on the side, you’ll likely be able to pay off your accounts even faster. Case in point: both my husband and I have side hustles to generate more money. You can do this too! Whether it’s babysitting, walking dogs, freelancing, or driving for a rideshare company, you just need a few hours each week to earn extra money on the side. You can then throw all of this toward paying off your collective debt.

Do What Works Best for You as a Couple

When asked how she and her husband paid off so much debt in just a few years, Hayes answered with this: “Do what works best for you as a couple.”

For some couples, this may mean moving back in with parents to save money. For others, it may mean cutting out gym memberships or swapping out expensive hobbies for more frugal ones.

While some people insist that all couples have joint bank accounts or weekly budget meetings, every couple is different. At the end of the day, you and your partner have to come up with a money action plan that you can both stick to.

 

How to Plan a Wedding Without Your Bridal Party Going Broke

When I got engaged in 2016, I knew I didn’t want our best friends’ budgets to suffer as a result. I decided to get creative and keep costs as low as possible for my bridal party. Here’s what I learned: With a little bit of research and the ability to think outside the box, the costs for a bridal party member can significantly shrink.

It’s expensive to plan a wedding. It’s also expensive to attend one. Millennials spend an average of $1,532 per destination bachelor party and $1,106 per bachelorette, according to a study by The Knot, a wedding website, and that’s not even for their own wedding — it’s for their friends’ big days. The worst part? Even if the bride and groom plan to keep the party local, bachelor and bachelorette parties are only the beginning. With gifts, wedding day travel expenses, attire and lodging, most bridesmaids spend close to $1,200 per wedding.

As a result of careful and creative planning, most of our bridesmaids and groomsmen spent less than $400 each.

Here’s how we made it happen.

Dresses: $60

Bridesmaid dresses can vary in price, but they typically cost between $100 and $300. To avoid the hefty price tag normally associated with bridesmaids attire, I got creative. I knew I wanted my bridesmaids in long, flowing dresses, but I also knew I didn’t feel comfortable asking my friends to pay $100 or more for a dress for my wedding. The solution? Amazon. I found the exact dresses I wanted on Amazon for a fraction of the price. I selected the color and had my bridesmaids choose the style. The dresses ranged from $40 to $100, and most of my bridesmaids selected dresses that rang in at $60. With free shipping and free returns, the process was simple and quick.

Genius tip: If you can’t find what you’re looking for on Amazon, experiment with bridesmaid dress rentals. Websites like Rent the Runway and Union Station offer dress rentals that start at $50.

Bachelorette Party: $75 to $250

Instead of hopping on a plane or partying for an entire weekend, I decided to keep the bachelorette local and short. Here’s what the day entailed and how much it cost each person: bottomless mimosa brunch ($25), poolside cabana at a local casino resort ($25), downtown dinner ($25). We didn’t splurge on a hotel room or rent a house for the weekend. Instead, we spent the day by the pool at a local casino. The best part? It had a lazy river, three pools and a delicious bottomless mimosa brunch. After the day ended, we drove home, got ready and went to our favorite local restaurant for dinner. It was the perfect end to a fun-filled day with my favorite people.

Three friends traveled from out of town. Only two of those friends had to get on a plane. The price of their flight was $100 round-trip. Once they arrived, they spent the night at our apartment to keep costs down.

Genius tip: Change your perspective and get creative. There’s a good chance brides and grooms from other cities in America travel to your city for their parties. Instead of daydreaming about an expensive and time-consuming trip to a new city, come up with locations for a local party. When I first thought of my bachelorette, I wanted to spend a weekend in Las Vegas, but once I got clear about the parts of Las Vegas I love — bottomless brunches, pool parties, lazy rivers and good food — I realized I didn’t have to travel to a different state to experience them.

Registry gifts: $6 to $100

Wedding registries are fun to create. You walk around the store and scan items you like. The most exciting part? There’s no limit. It’s easy to get caught up in the excitement of putting together your wedding registry, but it’s more exciting to choose items you’ll actually use.

Before you make your registry and get caught up in the excitement of scanning items or clicking “add” on a website, look at what you already have in your home. When my fiance and I looked at what we had, we realized we needed to replace some basic items we had purchased when we were broke college students. We didn’t need super fancy skillets. We needed plates that weren’t chipped. But even if you do need or want expensive items, it’s important to have less expensive items on your registry as well. The cheapest item on our registry was also one of my favorites: a kitchen towel with a cat on it. The cost? $6.

Despite our best efforts, some wedding costs, like flights and lodging, couldn’t be lowered. Here’s the truth: If members of your wedding party have to travel for the wedding, it’s going to significantly increase their costs. Though we couldn’t help our out-of-town bridal party members secure lower plane tickets or hotel rates, it was nice to know we had done everything we could to be respectful of their time and money.


This article originally appeared on Policygenius

 

How to Go on a No-Spend Weekend

You probably already know this: it’s a cardinal rule to make a budget and stick to it. During the summer months, however, it’s almost as if the money gods are setting booby traps, divisive schemes, and other prickly obstacles to make it super hard for you stay on course.

Common culprits include getting bitten hard by the FOMO bug, not tracking your spending as closely as you should, or reaching for your credit card for willy-nilly spends. Whatever the reason, summer can bust your budget. This happened to me last summer while taking on a side hustle as a pet sitter in Chicago. While I was saving on big essentials, like housing and transit, I was spending way too much eating out and cavorting around the Windy City. To get back on track with my finances, I went on a no-spend weekend diet.

Here’s how to set yourself straight on a weekend spending fast:

Set Rules Beforehand

Like all challenges, you’ll need to provide some parameters and set rules beforehand. Besides not being able to use any cash, I couldn’t put any charges on my debit or credit cards. Scary, I know. What I could do was stock up on groceries ahead of time, and load up my public transit card to get me through the weekend. I was also allowed to use any gift cards I had lying around.

Exceptions included a true emergency that required tapping in to my emergency fund – such as a trip to the ER, urgent dental work, or a family member who desperately needed a helping hand. If something urgent and unexpected popped up during my spending fast, I could certainly take money out of my bank account.

Check Past Spending Habits

When setting rules for your no-spend weekend, carefully review your transactions from the last few weekends to see what has been gobbling up your money. I noticed that I had been spending more on restaurants and nights out reveling in booze and pinball at the local barcade. My Chicago pals also turned me on to a few killer thrift shops. While it certainly wasn’t an ‘80s style, full-blown shopping spree on Rodeo Drive, all those little purchases were adding up. My frugal self was starting to suffer the consequences.

Prepare to Decline Social Outings

This is probably the toughest part when you’re cutting back on spending: curbing those FOMO feels and the YOLO philosophy to spare your pocketbook. During my no-spend weekend, I skirted going to dinner with pals. Instead, I checked out art shows, where I enjoyed free drinks and snacks, and went to the Farmer’s Market and sampled goodies. When I did decide to go to a bar to meet friends, I first trolled the perimeter of the Pokemon Go Fest grounds for free fun (yes, I’m that person). Once I was inside, I drank water and made it clear that I was on a spending fast. For the most part, my pals understood.

However, after a bit of tugging on my friend Greg Slade’s part, I agreed to join him for dinner. Sitting at a restaurant while my friend noshed on a burger was A-W-K-W-A-R-D. He did insist I have his hot tea and share of fries. That being said, I still felt a bit shameful for mooching.

Be Resourceful

My gut reaction was to stay home and minimize interactions with friends. But, I made a point not to be a hermit during the weekend. I wanted to get out and be my regular social self. In planning my weekend, I scoured listings for art show openings, movies and concerts at the park, readings at jazz nights at the local coffee shop, and free street festivals.

And those gift cards that had sunk to the bottom of my purse finally got some love. I used movie passes, and gift cards to Target and Buffalo Exchange. I did a little happy dance to be rid of those gift cards, at long last.

Keep in mind that you don’t have to live in a major city to have a social life during your spending fast. You can enjoy some nature by way of a hike or bike ride. Or check your city’s calendar of events for some options for free fun.

Try It During the Week First

If attempting a spending fast during the weekend is a bit intimidating, try it during the week. Trying it out midweek is far easier than the weekend for a number or reasons. If you’re a worker bee, you have a routine and structure. Because you’re busier and your schedule is more predictable, it’ll be easier to plan to eat in and refrain from shopping. Plus, you’ll be less tempted to hang out late with friends and spend money.

Know Your Intention

Before committing to a spending fast, it’s also important to know your “why.” In my situation, I wanted to curb my purchases and cut back on eating out. After my no-spend weekend, I committed to dining in more frequently and I quit shopping for the time being. I bought groceries for the week and used up everything I had before heading back to the market. I actually found the challenge to be fun while discovering new ways to get out and about without spending a dime.

Are you ready to try out a spending fast? Just think: by becoming more mindful of your spending, you’ll save money. In my book, that’s a win!

 

How to Attend Weddings Without Going Broke

There’s nothing better than knowing your friend has found his or her perfect match. On the other hand, attending the happy couple’s wedding may be costly.

Weddings are notoriously expensive to attend—on average guests spend $177 on gifts and if travel is involved, the cost can skyrocket to upwards of $700. But, here’s the good news: attending your friends’ nuptials doesn’t have to break the bank. With a little creativity and a bit of planning, you’ll be able to attend weddings without worrying about whether you’ll also be able to pay your bills that month.

Here are 5 tips for how to budget for wedding season:

1. Be Picky

There will come a time in your life when it seems like everyone you know is getting married. If your refrigerator is plastered with “save the date” cards, then you’ve entered probably entered this phase of life.

It’s important to remember that this won’t last forever. At the same time, you’ll have to be picky in order to get through the wedding onslaught without going broke. Yup, you’ll need to turn some of those invites down.

When evaluating which weddings to attend, be sure to remember that it’s okay to put your own needs first. For Julia Layton, a 33-year-old YouTuber in Chicago who is documenting her journey out of $132,000 of debt, carefully choosing which weddings to attend has been critical to her debt repayment success.

“The biggest lesson I learned was that I can’t make everyone happy and I need to be my own biggest advocate, especially where my finances are concerned. I’ve stopped going to destination weddings and I also only attend weddings for family and very close friends,” says Layton.

If you know that you can’t attend every wedding, you may need to prioritize – starting with your closest friends and family. For example, if your sister is getting married this year and you can only afford to attend one wedding, then you may have to decline the invitation from that college friend who you haven’t spoken to since graduation.

2. Set an Annual Budget

Budgets sometimes get a bad rap, but when done correctly, budgets create room for more freedom, not less. The best way to prepare for the cost of weddings is to set aside a little bit of money from your paycheck every month. It’s much more difficult to take the $700 required to attend a destination wedding from a single paycheck than it is to save $58 every month for one year.

Follow these steps to create your wedding budget:

  1. Determine how many weddings you will attend each year. If you’re unsure, pick a realistic number, like two.
  2. Figure out if the weddings are likely to be local. It’s much easier to cut costs for local weddings than it is for out-of-town weddings. For destination weddings, budget about $700 per wedding. For local weddings, budget about $200.
  3. Add up your budget and divide it by 12. If you plan to attend one destination wedding and one local wedding in the upcoming year, you would need to save $900, or about $75 per month.
  4. If you end up coming in under budget or not attending as many weddings as planned, you can save the money for next year’s wedding season.

Here’s the good news: it’s never too late to start saving. Even if you have a destination wedding to attend in two months and haven’t saved a dime, you still have two months to prepare, which is infinitely better than no time at all.

3. Get Creative with the Gift

Most guests spend about $200 per wedding gift. Even though it’s nice to be generous, it’s also important to be realistic.

Being realistic doesn’t mean you can’t buy items from the registry, says Rachel Smith, a 24-year old money blogger from Michigan. It simply means that you need to be strategic.

“Stalk their registry. No, seriously. Figure out where they are registered ASAP and make sure to check those websites frequently for coupon codes and flash deals. I have saved between 25 to 35 percent each time doing this, and it’s still the items the couples actually picked out,” says Smith.

If items on the registry are out of your price range, then get creative with the gift and give something meaningful like matching coffee mugs, monogrammed hand towels or a decorative frame with their new last name.

4. Buy One Wedding Outfit (and Wear it Again)

Wedding attire may not sound like a big expense, but wedding guests tend to spend an average of $81 on clothing for each wedding they attend.

Instead, try buying one outfit you love and then wear it again and again. To get the most bang for your buck, be sure to buy an an outfit with solid colors. Solid colored clothing ensures that you can mix and match shoes and accessories to create entirely different looks.

5. Missing the Big Day? Send a Gift or Plan a Post-Wedding Dinner

Whether you miss the big day because of scheduling conflicts or financial constraints, don’t fret. The best thing to do is send a card and gift. The size of the gift depends on your relationship with the bride and groom.

“If you are close but can’t attend the wedding, get a gift that would include some of the costs you’d spend to attend—meaning actually spend a little more (that you would if you aren’t that close to the couple),” says Smith.

If you live in the same city as the couple, you can perhaps plan a celebratory post-wedding dinner. The bride and groom will get to fill you in on all of the details and you’ll be able to celebrate the milestone with them. It’s a win-win.

Remember: Your Budget and Friendships are Bigger than a Single Day

Weddings are exciting, but they are only one day. If you can’t attend the celebration or simply don’t have room in your budget, it’s not the end of the world. Your financial health is more important than a single day and so is your friendship with the bride or groom.

 

How to Save Money (and the Earth) This Summer By Using Less Energy

You finally made it out of winter and those long months of high electricity bills—whew! But just because you’re no longer turning up the heat every day doesn’t mean it’s time to forget about energy conservation. In fact, there are tons of things you can do to save money on your electricity costs. Take a look at our 8 tips to lower your energy costs this summer.

Use fans instead of air conditioning

Did you know that by bumping up your thermostat four degrees the room temperature still feels the same – as long as you switch on a ceiling fan? Because fans work simply by moving air around and creating a wind chill effect, they’re a lot more energy efficient than air conditioners, which lower the temperature of the air but raise your electricity bill.

No ceiling fan? No problem. You can also use simple window fans to create the same effect. The best way to use box fans, according to the U.S. Department of Energy, is to place them in a window pointing outwards. Then, close all of the windows near the fan and open the furthest-away window to create a cooling effect throughout your whole home.

Use window treatments

We understand: you like the summertime sunshine, especially after the long winter blues. But that doesn’t mean that the sunlight needs to fall directly into your house. In fact, 76% of the sunlight that comes directly through your windows is converted to heat—ouch!

Instead, think about using window coverings like curtains, blinds, or even fancy shades to keep the direct sun out during the day. If you own your own home, you can also think about installing awnings over your windows. This will also help reduce your cooling bill.

Keep an eye on your lights

When your parents told you to turn off the lights when you leave a room, maybe you should have listened. About 10% of the energy usage in your home comes from lighting alone, according to U.S. Department of Energy. So, by developing a habit of turning off the lights, you’ll reduce your energy expenditure.

Another thing that helps is to replace all the bulbs in your house with energy-efficient LED bulbs. Admittedly, these are more expensive, but they last longer, use less electricity, and won’t heat up your home like old-school incandescent bulbs (triple win!)

Give your laundry process a makeover

Believe it or not, you can cut the energy usage from your washer in half by using cold water instead of hot, according to the U.S. Department of Energy. Unless your clothes are filthy, you likely won’t notice a difference.

If you’re in the market for a new washer, consider a top-loading washer or a high-efficiency washer. These types of washers use less energy and water than traditional front-loading washers. But, what if you’re still stuck using a laundromat? You can save here as well by drying your clothes at home. To do this, use an outdoor laundry line, or a small folding rack that can fit into even the tiniest of apartments and still dry a full load or two. If you spend $1.25 per dryer load and wash two loads of laundry per week, this can save you $130 a year!

Rethink your dishwasher strategy

It can be tempting to run your dishwasher each night. But a better option is to wait until the dishwasher is full as this way you’ll run fewer loads – saving both energy and money.

In addition, here’s another crafty tip: when the wash cycle is done and the dishwasher kicks into drying mode, push the stop button and crack open the door. The dry cycle basically works like an oven to cook your dishes dry. Since they’re already warm, they’ll dry fast enough on their own. This will you save electricity, and keep excess heat from escaping into your kitchen.

Use different cooking methods

A hot summer evening is definitely not the time you want to fire up your oven for some faux-brick-oven pizza. Instead, try using other less energy-intensive appliances like microwaves or slow cookers. Better yet, get outside and fire up the grill! Besides, by grilling outdoors, you’ll avoid turning up the heat indoors meaning you won’t need to crank on the AC.

Lower the temperature on your water heater

Summer is hardly the time to think about using hot water, but did you know that your water heaters may be set too high? By lowering your water heater from 140 degrees to 120 degrees—all year round—you can shave up to $460 off your annual electric bill.

Adjusting your water heater’s temperature is not a difficult thing to do. You can even check out the U.S. Department of Energy’s website for information on how to check and adjust your water heater’s temperature.

Try an electricity usage meter

Perhaps the best way to lower your electricity bill is to find out how much you’re actually paying for each electrical device, and then decide whether you can lower your costs.

A good way to check on your electricity usage is with a home electricity usage meter. Simply plug it into an outlet and then plug in your appliances. The meter will measure electricity usage from that device. From here, you look up the cost of each kilowatt hour (kWh) on your electric company’s website and calculate exactly how much each appliance costs you. Some electricity meters even let you input the kWh price, giving you a direct readout of the cost.

Start saving energy and money right now

Regardless of how you decide to curb your energy costs this summer, when you free up cash, you’ll be able to sock that money away into your savings account. And just think: by following the 8 tips above, you may be able to save more money for your upcoming vacation or even start an emergency fund!

 

How to Save Money on a Teacher’s Salary

If you’re a teacher, you probably understand what it’s like to work hard without earning a high salary.

No matter how dedicated you are to improving the lives of children, it’s sometimes a struggle to make ends meet, let alone invest in your own future. In fact, according to U.S. News & World Report, the highest paid teachers earn anywhere from 40k/year to almost 100k/year. Depending on where you live, this can make it difficult to pay off your own student loans, buy classroom supplies, and save money – especially when you may only get paid for nine months out of the year.

Fortunately for you, if you’re smart about managing your money, you can still reach your financial goals, even without a high salary. In recognition of National Teacher Day, take a look at our 7 savvy strategies teachers can use to save more money.

Infographic Credit: U.S. News

1. Complete a Master’s Degree or Extra Certifications

If you are interested in continuing your education, you may be able to get a master’s degree for free or for an affordable fee. And, depending on the district where you teach, having a master’s degree may mean a higher salary for you. In some cases, even earning a specific certification can lead to higher pay.

Better yet, your school district may have a list of available courses that you can take advantage of. If not, you can also scout around on your own. You may be surprised at the number of classes and courses you can take to both enhance your skills and salary. If you’re a Texas middle school math or science teacher, for example, you may be able to get a free online education master’s degree from the University of Houston. So, it’s worth it to do your homework!

2. Volunteer for Extra Responsibilities

In addition to chasing more credentials, you may want to take on some extra responsibilities at your school. Things like being a class advisor to a student club, coaching extra-curricular sports teams, or tutoring during after-school hours may yield some extra money – above and beyond your salary. Since every school operates differently, if you’re interested in these opportunities, talk to your school’s administrators to find out how you can step up to the plate.

3. Avoid Lifestyle Inflation

Avoiding lifestyle inflation is a sound financial strategy for everyone, especially teachers.

Don’t believe me? Imagine this: You just graduated with your teaching degree and landed your first job, so you treat yourself to a new car because you deserve it. To go along with that new car, you sign a lease for a nice apartment with a spare bedroom you can use to store all of your stuff. Then, you plan a vacation to celebrate the next chapter of your life. Sounds pretty normal, doesn’t it?

But, let’s back up for a minute. This kind of carefree spending can easily get out of hand. Instead, why not spend less and save money by keeping the car you drove in college, moving in with a roommate to save on rent, and skipping vacation until you have enough cash to pay for it. By optimizing the major financial decisions in your life, you stand to save big bucks over the long term.

4. Automate Your Savings

One of the easiest ways to start saving money is to make it automatic. For instance, if you have a Chime bank account, every time you use your Chime Visa® debit card, the transaction is rounded up to the nearest dollar. That rounded up amount is then deposited into a savings account. Cha-ching!

It doesn’t stop there. As a Chime member, you can also start paying yourself first by earmarking 10% of each paycheck into your Savings account. This is particularly important for teachers who are sometimes only paid for 21 pay periods. Other times, teachers get paid for 26 pay periods, even if they only work for nine months of the year, says Vicki Cook, a 29-year teaching veteran and co-founder of Women Who Money.

“For those who struggle creating (and sticking to a budget), the 26 pay period option helps them receive a steady paycheck all summer long. If that isn’t an option, setting up a consistent auto-withdrawal from each paycheck to a separate summer savings account can work well,” says Cook.

5. Take on a Side Hustle

Talking about saving up for the summer months, why not take on a summer job or start a hustle to supplement your teaching income?

For example, you can use your teaching experience to offer tutoring services or even teach classes online. You can also earn money doing something completely different than teaching, like selling jewelry on Etsy or driving for Uber. The point is: you’ve got the summer off. Why not earn some extra cash?

Lindsey Oura, a science teacher for the past 16 years in suburban Boston, knows first-hand how to earn extra money doing something she enjoys.

“Before I had children, I would always work at least one summer job, usually as a camp educator,” says Oura.

When her two children came along, she had her hands full as a mom and a school teacher. But recently, Oura decided to combine two of her passions – teaching and yoga – and take the online Pretzel Kids yoga certification course. Now a Pretzel Kids teacher, Oura is looking forward to earning money teaching kids yoga classes and leading birthday parties this summer.

6. Pack a Lunch

As a teacher, you may be tempted to hit the cafeteria each day for lunch instead of packing your own lunch.

But, believe it or not, you can save loads of dough by brown bagging it. Even if you only spend five dollars a day at the cafeteria, that adds up to $25 a week, $100 a month, or $900-$1,000 a year! Just think of the jump-start you can get on your savings by socking that cash away. Sure, you’ll still have to go to the grocery store to buy sandwich fixings but by shopping wisely, you can even save money at the supermarket.

7. Save for Your Retirement

If you’re eligible for a retirement plan at your school, take advantage of it. And, if you’re not able to invest through your employer, you should still consider opening your own retirement account. It’s never too soon to start saving up for your future.

Final Word

Making a difference in the world each day you go to work is something many people will never experience. So, savor it, make the most of your salary, and enjoy your life.

One final thing: thank you for all you do. Happy National Teacher Day!

 

How to Save Money on Your Utility Bills

Do you cringe each month when you get your utility bills? When you see a super high bill, do you wonder what happened? We’ve all been there, and high bills for gas, electricity and cable can certainly put a dent in your bank account.

But all is not lost. If you want to keep your utility bills low, here are some habits you can change.

1. Use it or lose it

It’s easy to keep lights on after you’ve left a room or keep a heater cranked even if you’re not cold. In fact, keeping the water on might be second nature for you.

But, if you want to save money on your utilities, you may want to instead adopt a use it or lose it strategy. In other words, if you’re not using it, lose it. Turn it off.

Besides simply getting into the habit of turning everything off, it also helps to practice mindfulness when it comes to your consumption of energy and other resources. Ask yourself, “Am I using this right now? Does this need to be on?” If the answer is no, take some time to turn off certain appliances. This may help you feel better as well as save money on your electric, water and heating bills.

2. Buy energy efficient products

If you have to buy a new appliance like a fridge, washer or dryer, make sure you buy an energy efficient model. This will help cut down on your electricity costs and you may also be eligible for rebates. If you don’t need a new appliance, you can also save money simply by swapping out your incandescent light bulbs for energy-efficient options. According to Energy.gov, if you replace your five most used light fixtures with ENERGY STAR models, you can save up to $75 per year.

3. Keep your thermostat temperature low

Having just the right temperature in your home is important. But let’s face it, you’re probably at work and gone for at least eight hours a day. You certainly don’t need to be blasting the heat or air-conditioning when you’re not home.

To help you save money, consider keeping your thermostat set seven to 10 degrees lower than you normally do. While you may decide to manually change the temperature to suit your comfort level when you’re home, this will help you from wasting energy in the long-run. In fact, by doing this one simple thing, you can potentially save 10 percent of your heating and cooling costs each year, according to Energy.gov.

4. Unplug

If you’re not using a certain appliance, consider unplugging it to help reduce your electrical costs, according to Energy.gov. Just think about it: when you’re not using your TV, coffee maker, and phone charger, they are probably still plugged into the wall socket. Give your appliances a break and unplug. Your wallet will also thank you.

5. Plug up leaks

It’s common for windows and doors to have air leaks. Hot or cool air coming in or out through these holes and gaps can result in higher energy costs without you even realizing it. To fix this, try caulking your doors and windows to create seals and prevent air from getting in or out of your windows and doors. Check out this how-to-guide to get started. According to Energy.gov, this simple change can result in a savings of $83 to $166 per year.

6. Get advanced power strips

While it’s a good idea to unplug your electronics when they’re idle or not in use, sometimes you’re in a rush or you may forget. The solution? Advanced power strips (APS). These can help lower energy costs by reducing the electricity that is used when your devices are not being used.

7. Negotiate your bills

You might think that your utility bills are set in stone but this isn’t always the case.

Companies like Billcutterz or Trim can help you negotiate better rates on services like cable, wireless, and cell phone. In essence, Trim and Billcutterz can contact your providers for you and do all the dirty work. These cost-saving services are free and make money if they actually score you some savings or refer you to a partner. Of course, you can always pick up the phone and call your service providers yourself. You may be able to negotiate a lower price on your own.

Bottom line

Your utility bills can spike at any time and it can be frustrating. Luckily, you can refer to these 7 tips to effectively lower your utility bills. This, in turn, will help you free up money to save for your financial goals.

 

How to Budget for Spontaneity

Budgeting is one of the best ways to save money, and it’s so simple — create categories, set aside a certain amount of money for each category, and then only spend what has been designated for that account.

But what do you do when your best friend asks if you’re free for dinner, and you open your budgeting app and realize that your “dining” budget only has a few dollars left in it? You don’t want to cancel plans with your best friend, so you make the decision to transfer money for dinner from your savings account. Just like that, you’ve blown your budget.

There will always be last minute dinners with friends, drinks with colleagues, or unexpected celebrations. Unfortunately, spontaneity can often derail your budget. Luckily, there’s a simple fix: preparing for spontaneity.

It might sound counterintuitive, but here’s how it works.

Cash-back websites

Did you know you can earn money from shopping online? It’s true. Websites like Ebates and Topcashback will give you cash back on your online purchases when you shop from their website.

Here’s how it works. The websites earn money through affiliate links from the stores that customers use to shop. To encourage customers to use the link, the cash-back websites share a percentage of their profits with the customer (that’s you!).

The best way to earn cash back is to pick one cash-back website, install the cash-back button (a reminder to use the website that appears at check-out), and always use it when you shop.

Cash-back credit card rewards

If you’ve never used cash-back credit cards, you’re missing out. The premise is simple: use your credit card to earn points that you can redeem for cash or other perks.

Most credit card rewards range from 1% to 2% of your purchase, and some cards offer rotating categories. But there is a catch. In order to take advantage of the rewards, it’s important to pay your card on time and in full every month. If you don’t, you’ll end up paying more in fees and interest than you could earn in cash-back rewards.

Cold, hard cash

Budgeting for spontaneity doesn’t have to be difficult. In fact, it could be as simple as going to the ATM and getting out cash at the beginning of the month.

This money is designated as your “fun” money: It can only be used for an unexpected movie date with friends, celebratory beers, or Sunday brunch. It’s spontaneity with a limit, because when the cash is gone, so is that month’s fun budget.

Give yourself a tip

You tip for a good haircut and a cocktail from the bar, so why not tip yourself? That’s the premise of the app TipYourself. Every time you accomplish a task or goal, you can use the app to send yourself a tip. The goal can be as simple as drinking eight glasses of water per day or as complex as repainting your bedroom wall, and tips can be as small as $1.

The secret to using an app like TipYourself? Setting aside your “tips” for fun. Here’s how it works: set your goals, accomplish them and enjoy a spontaneous adventure with someone you love (and yes, that includes yourself).


This article originally appeared on Policygenius.
Image: Youngoldman

 

5 Ways to Teach Your Kids Good Money Manners

As a parent, you’re responsible for teaching your children many important life-long lessons.

One of the most valuable lessons is this: how to use money responsibly. But, before you dive in, consider first that money is a taboo topic for many families. In fact, discussing money is often awkward.

At the same time, it’s imperative to put your apprehension aside and talk about money with your kids. Why? The sooner your kids understand the inner workings of your family’s finances, the sooner they’ll appreciate the value of money. In turn, you will be teaching them that’s it ok to talk about their own finances – and ask for help – as they grow up.

To help you successfully discuss money with your kids, take a page from our book with the following 5 suggestions:

Teach them about debt

Despite its ubiquitous place in modern American society, debt has an extremely negative connotation. People who carry debt are sometimes viewed as irresponsible with their money, even if they manage their debt payments comfortably.

To explain the role of debt in your overall financial picture, start by explaining some of the debts you’ve had or still have. For example, you can talk about the fact that you owe money on the car you drive to take your kids to school. Or, you can explain that your home is still technically owned by a bank.

As your kids approach the tween years, you can also talk to them about other forms of consumer debt, like credit cards and high-interest personal loans. Once they understand that using a plastic card is not akin to free money, they’ll have a better idea of why it’s important to spend responsibly. They’ll also understand that, if used right, debt can help improve your financial footing.

To put these principles into practice, consider lending your kids money to pay for something they want instead of simply buying it for them. When I was 14, for example, my dad loaned me $750 to help me buy a computer. It was my responsibility to pay him back, interest-free. I learned quickly that this debt meant I was beholden to someone else.

Be wise about giving allowances

Giving your kids allowances can help them learn the importance of work and the value of money. On the flipside, allowances can also cause problems down the road – especially if your kids grow up to expect free money.

Instead, help your kids understand why they are receiving an allowance in the amount you deem fair. Then, consider giving them household tasks to earn their allowance money. Lastly, talk to them about jobs you’ve held and how much you were paid. This way, your kids will appreciate the value of working hard to earn money.

And, here’s another pro tip: encourage your kids to save some of their allowance money. Not only does this teach them to use money prudently, but it can also prevent them from attempting to make frequent withdrawals from the Bank of Mom and Dad.

Include them in budget discussions

Your kids may not be pleased with all of your financial decisions. When I was in middle school, my dad hyped up a mysterious family vacation for months before it happened. We all thought it would be a blast to go to Disneyland or spend a week at the beach.

But, when the day arrived, my dad pulled into our driveway in an RV and told us we were going on a road trip through Wyoming and South Dakota. We all felt let down, and some of us, regrettably, complained about how lame the trip was going to be. Fortunately, we did end up having a great time.

Perhaps if we grumbled less and had been part of the planning process, we would not have had such high expectations. Clearly, my parents couldn’t afford the exotic or theme park-centric trips we all wanted.

Keep in mind, however, that involving your kids in the vacation planning experience doesn’t mean you have to show them your monthly budget. But, if you’re taking a vacation or considering a large purchase for the family, perhaps you can sit down all together and talk about how you plan to budget and save up for the purchase or trip.

Explain why

Kids typically ask the question “Why?” when they don’t get exactly what they want. In fact, you may hear them repeat this one word question over and over again in the same conversation. Responding with something like “Because I said so,” or “We can’t afford it” may shut down the conversation, but it isn’t the best way to address the issue.

Instead, try explaining the real reason why you’re not going to buy something they want. This can also be a good time to teach your children about budgeting and saving money.

Avoid net worth comparisons

It’s hard for kids to avoid comparing their house to their classmate’s. Likewise, older kids get caught up in comparing clothes or even cars.

But, you can help your kids avoid the comparison trap by steering clear of this yourself. If your kids catch you trying to keep up with the Joneses, they may start to equate financial success with social status.

Instead, teach your children why it’s important not to play this game. The earlier they understand that a person’s value extends far beyond their net worth, the more self-assured they will be later on in life.

 

Easy Money: How to File Taxes in 2018

Welcome to Easy Money, where we make super-complicated financial stuff simple(r) to help you do it better.

Whoa, boy. Republicans have everyone confused about taxes. That’s what happens when you pass a massive system overhaul less than a month before W-2 forms go out. (Thanks, Congress!) Here’s the thing, though: The tax bill won’t directly affect the taxes you file this year. Most provisions go into effect Jan. 1, 2018, but they’re not retroactive — and your 2017 taxes are due by April.

So, as we talk tackling taxes this year, a lot of information will look old hat. But don’t worry: We’ll note some of the big changes on the way — and how they can influence your 2017 tax return.

Let’s dive in.

First, get your ish together

To file, you need any applicable:

  • W-2s,
  • 1099s, which report other income, like interest and dividends or self-employment wages
  • 1098s, which report stuff you can deduct, like mortgage interest or tuition expenses
  • Documentation for other deductions you want to take, like receipts for charitable donations
  • Your 2016 tax return
  • Bank account and routing number, if you want the IRS to direct-deposit your refund
  • Your adjusted gross income (AGI), which is basically your gross income (including any interest you’re including on 1099s), minus “above the line” deductions, most notably, retirement plan contributions, alimony, medical expenses and unreimbursed business expenses. Sounds complicated, but your 1040 walks you through calculating AGI.

Next, bookmark these dates

  1. Expect last year’s W-2s by Jan. 31, 2018.
  2. Your 2017 taxes are due by April 17, 2018. (Not a typo. You get two extra days this year because April 15 is a Sunday and April 16 is Washington D.C. Emancipation Day.)
  3. If you need more time, you must file for an extension by April 17, 2018.
  4. If you get an extension, your tax returns are due by Oct. 15, 2018. But don’t get it twisted: That extension only applies to your paperwork. If you owe the Internal Revenue Service money, you must pay by April 17, 2018.

Figure out your filing status

There are five options, pretty much determined by your marital status on the last day of the year.

  • Single Filing Status, meaning you’re not married, divorced or legally separated
  • Married Filing Jointly, meaning you’re married and filing a return with your spouse
  • Married Filing Separately, meaning you’re married, but not filing a return with your spouse
  • Head of Household, meaning you’re not married, but have paid more than half the cost of maintaining a home for yourself and a qualifying dependent
  • Qualifying Widow/Widower, meaning your spouse died within the last two years, you haven’t remarried and you have a dependent child

Your filing status is mostly straightforward. If you’re single, file single. If you’re a head of household, file head of household. If you’re a recent-ish widow(er) with a dependent, file qualifying widow(er). If you’re married, you’ve got a choice to make. Most couples score the bigger tax break by filing jointly, but there are reasons to file separately. Here’s a high-level overview of filing together vs. filing solo.

Why married couples file jointly

  1. For a higher standard deduction (more on this in a few)
  2. To reduce what you owe, since higher tax brackets kick in sooner when you file separately
  3. To qualify for certain deductions you can get more easily when filing jointly, like the Child & Dependent Care tax credit

Why married couples file separately

  1. To separate your tax liabilities (say, you’re worried your spouse is evading Uncle Sam)
  2. To score a significant itemized deduction one spouse can’t take were the couple to combine incomes (some deductions are limited by your adjusted gross income)
  3. One spouse has debts subject to refund seizure or an income-based payment (like student loans)

We can’t tell you what to do. You — or your tax preparer — need to look at your finances and crunch the numbers. Having said that, you may want to crunch the numbers, i.e., prepare your tax returns both ways to see if it’s better for you to file jointly or separately. Yes, that’s extra work. It’s also the best way to know how to come out ahead.

Know the tax brackets

OK, remember, we’re talking about filing taxes in 2018 for 2017, so you’re subject to the tax brackets in place before the Republican-led tax reform. Here they are.

tax-brackets-2017

Now, here’s the thing about tax brackets: They’re not all that straightforward. (Who’d a thunk it, right?) You don’t make, say, $80K and get taxed at 25% for all those dollars. The system’s progressive. So, assuming you’re single, the first $9,325 you make gets taxed at 10%, the next $9,326 to $37,950 gets taxed at 15% and the remaining amount (given the next tax bracket, for 2017 at least, is $37,951 to $91,900) gets taxed at 25%.

This is confusing, but also important so (a) you don’t try to needlessly claw your way into a lower tax bracket and (b) you get an accurate estimate of your tax bill before you must pay it. Part B is all-the-more important as we head into 2018, since the tax brackets are changing. (The progressive system is not.) Effective Jan. 1, 2018, they become:

2018-brackets

Decide if you’re taking the standard deduction

Deductions lower your taxable income. The standard deduction is the most basic way to approach this. In lieu of listing every qualified expense that ate into your net worth during the year, you claim a fixed amount associated with your filing status. For tax year 2017, the standard deduction is:

  • $6,350 for single filers
  • $6,350 for married filing separately
  • $12,700 for married filing jointly
  • $9,350 for heads of households

Flash forward: The GOP tax bill practically doubles the standard deduction for all filers, so for tax year 2018, it’s $12,000 for singles and married people filing separately, $24,000 for married couples filing jointly and $18,000 for heads of household.

If you don’t take the standard deduction, you’re itemizing. People itemize when (a) their deductions exceed the standard deduction and/or (b) they can’t take the standard deduction, because there are exemptions. For example, someone who’s married filing separately is ineligible if their spouse itemizes deductions. If you’re itemizing, you need to …

Know your deductions & exemptions

Let’s start with deductions. There are a bunch of them, but, for the sake of simplicity — which, again, is what we’re going for — here are the most common ones. By the way, a lot of these deductions, though totally fair game this year, are changing in tax year 2018. We’ll flag some of the bigger changes as we go.

Mortgage interest deduction: You can deduct the interest paid on up to $1 million in mortgage debt on your primary home and, sometimes, a second one. Flash forward: The GOP tax bill lowers the cap to $750,000 of mortgage debt, though it’ll stay at $1 million for mortgages made before Dec. 15, 2017.

State & local tax (SALT) deduction: Itemizers can deduct state income, sales and property taxes. Flash forward: The GOP tax bills caps the SALT deduction at $10,000, starting next year — which is why people were rushing to prepay 2018 property taxes in December.

Student loan interest deduction: You can deduct up to $2,500 of interest paid on student loans.

Charitable donations: Itemizers can deduct donations made to eligible organizations. The deduction can’t exceed 50% of your adjusted gross income (or 30%, in some instances). Plus, you’ll need the receipts.

Medical expenses: You can deduct out-of-pocket medical expenses exceeding 7.5% of your adjusted gross income. That’s a result of the GOP tax bill, which lowers the threshold from 10% for tax years 2017 and 2018. It goes back up for most Americans in 2019.

Health savings account contributions: Money put into an HSA, which helps with out-of-pocket medical expenses, is tax-exempt. In 2017, you can deposit up to $3,400 if you’re a single filer or $6,750 for families.

Individual retirement contributions: You can deduct Roth and traditional individual retirement account contributions, depending on your income, filing status and whether you have a retirement plan at work. Contributions are limited, too: In 2017, you can put up to $5,500 or, if you’re age 50 or older, $6,500, into an IRA account. You can see if qualify for a full or partial deduction here on the IRS website.

Genius tip: You can make retroactive HSA and IRA contributions up until April 17, 2018, so there’s still time to score those tax breaks.

Moving expenses: You can deduct some moving expenses if you relocated because of a job change. Flash forward: This deduction is donezo next year, thanks to the GOP tax bill, which suspends it through 2025.

Exemptions also reduce your taxable income, but, for individuals filing taxes, there are really only two of them.

  1. You can claim a personal exemption, so long as no one else is claiming you as a dependent. The personal exemption in 2017 is $4,050, but it starts to get lower once your adjusted gross income hits $261,500 ($313,800 for married couples filing jointly) and is null and void if your AGI is $384,000 or higher ($436,300 for married couples filing jointly.)
  2. You can also claim a dependent exemption, if, you know, you have dependents. That usually means children, but there are other scenarios where a relative qualifies. In 2017, you can deduct $4,050 for each dependent.

Flash forward: The GOP tax plan does away with the personal exemption, starting next year through 2025. The impact this could have on your taxes will vary, because, remember, the standard deduction nearly doubles next year. Still, itemizers and families, especially, should discuss with their tax preparer whether it’s worth adjusting their withholding for 2018.

Don’t forget credits

Credits, unlike deductions, get subtracted from your actual tax bill, not your taxable income. Tax credits come in two flavors: refundable and non-refundable. Refundable credits can reduce your liability beyond $0. Non-refundable credits don’t. There are a bunch of credits, too, but here are the most common.

Earned income tax credit: A refundable break for low-to-moderate income families; the amount varies based on your number of children and income. There’s a bunch of boxes you need to check off to qualify for the EITC, but, as a benchmark, if your earned income and AGI exceeds $53,930, you’re definitely not eligible.

Child tax credit: A non-refundable credit of up to $1,000 per qualifying child; eligibility is determined by age, relationship, family income and more.

Child & dependent care credit: A non-refundable credit for paying someone to look after a dependent while you work; the amount is between 20% and 35% of your allowable expenses ($3,000 for one dependent; $6,000 for two or more), depending on your AGI.

Savers credit: A non-refundable tax credit that offsets the first $2,000 low-to-moderate income workers save for retirement. Eligibility varies by filing status and AGI.

American opportunity credit: A partially refundable tax break for students paying for college. The maximum annual credit per student is $2,500.

Lifetime learning credit: Another tax break for students, this non-refundable credit is worth up to $2,000, depending on income and filing status.

Mind your penalties

This is the stuff that’s gonna up your tax bill. Penalties aren’t abundant, per se, and you’re probably familiar with most of them, but here’s an overview of what can jack up your tax bill.

Early withdrawals: In most cases, if you withdrew money from a retirement account during the tax year and you’re not 59-and-a-half, you must pay an additional 10% early withdrawal tax. There are some exemptions, though. For instance, first-time homebuyers can take up to $10,000 out of an IRA for their house, sans penalty.

Missed minimum distributions: Conversely, once you hit age 70-and-a-half, you have to start withdrawing from retirement accounts, including 401(k)s, traditional IRAs, SEP IRAs and SIMPLE IRAs. If you didn’t make your minimum distribution by Dec. 21, 2017 (or April 1, 2018 if you turned 70-and-a-half this tax year), you’ll pay a 50% excise tax. Minimum distributions vary by age and marital status.

Failure to file/failure you to pay: The exact charge depends on where you went wrong (failure to file costs more), how long you go AWOL, how much you owe and whether you enter a payment plan. There are also penalties for bouncing checks, underpaying or misreporting what you owe.

Filing late: If you miss the April 17 deadline — and didn’t get an extension — you face a penalty of 5% of the unpaid taxes each month the return remains late. That penalty accrues the day after your due date, but won’t exceed 25% of the unpaid taxes.

Not having health insurance: Yes, the GOP tax bill repealed Obamacare’s individual mandate, but it was still in effect for tax year 2017, so, if you went without a health care plan last year, you face a penalty of either 2.5% of your taxable income or $695, whichever is greater. In fact, you’ll face a penalty in tax year 2018, too. The repeal doesn’t take effect until 2019.

Get ‘er done

OK, now you (more or less) know what’s up, it’s time to file. And, again, you have a choice to make: How should you do your taxes? The best option varies, depending on how much time you have, how complex your returns are and how tax-savvy you are. Still, technically, everyone has three options.

  1. Do-it-yourself: Yeah, going old-school probably isn’t your best bet if your taxes have a lot going on. However, if you’re filing via a 1040EZ — meaning you make under $100,000, are filing single or married jointly and don’t have any dependents — or even fairly straightforward 1040, you could give it a go. It’ll certainly save you some dough: Filing via good old paper and pen pretty much only requires paying for postage. (You can download all the forms you need from the IRS website.) But, if you make under $66,000 a year, you can actually e-file for free. There are volunteer groups, too, that work with the IRS to provide free tax assistance to qualifying individuals.
  2. Use tax software: If your taxes are all Baby Bear (you know, not too hard, but not too easy), basic tax software is probably the way to go. It’ll take a little time, but you’ll pay less for the goods than you would to a tax preparer.
  3. Hire a professional: If you’ve got a complicated estate, the expertise of a reputable, licensed tax preparer is probably worth their fees. Ditto for if you have zero time to do your taxes. But notice how we specify using a reputable tax preparer. That’s because there are, unfortunately, plenty of scammers out there. To avoid getting got, make sure a prospective preparer has a Preparer Tax Identification Number (they’re required to by law). And check with the Better Business Bureau or online review sites to see how past clients rate them.

Recommended reading

To help you build your expertise, here are some useful tax resources from around the web.

For more life & money tips, visit our Moneygenius magazine.


This article originally appeared on Policygenius.
Image: Yuri_Arcurs