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Can I afford to move out?

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I'm 22 years old and recently graduated from community college as an x-ray technician and make ~$45k/yr at my first real job. I live in a somewhat high COL area (big city > 1 million people).

I've been told by my parents to start saving aggressively for retirement as early as possible, so I set up my 401k to deduct 10% of my paycheck. I also pay around $100/mo for a high deductible health plan and also put $50 out of every paycheck into my HSA account (I know that's low but I rarely go to the doctor).

My total net take home pay comes out to about $1,100 every 2 weeks.

I've tried to stay as frugal as I possibly can. I drive a used car from 2004 that I own outright (no payments). However, between car insurance and gas I spend about $300/mo. I have shopped around, I cannot find car insurance for less than $180/mo (apparently my city has the highest car insurance rates in the country).

I have a small amount of student debt (about $4k) and I pay $150/mo towards this.

I live with my parents and pay them $500/mo for rent. I also do my own grocery shopping etc. as I want to practice being independent. In total, including groceries, eating out, toiletries (TP, shampoo, etc.) I probably spend about $4-500/mo but never actually counted every little thing. My phone bill is $50/mo.

So, as of right now as I'm living with my parents I'm bringing in $2,200/mo and spending about $1,500, leaving me with $700 of "disposable" income which I currently try to save (I have about $3k cash savings) and spend on hobbies like video games.

I'm looking at apartments and I'm seeing around $1k/mo (plus utilities) for a basic 1 bedroom in a relatively low crime area of the city.

So my budget would look like this:

Rent + utilities: $1200 (?)

Phone bill: $50

Car: $300

Groceries, food, toiletries: $500

Student loan: $150

total: $2,150

Income: $2,200

So I'd have $50/mo in discretionary spending. It just doesn't seem possible. My car also has 210k miles on it, so I expect that buying a new car will be likely within the next few years. So I'd have a car payment + my insurance will be much higher (I currently only have liability). A "new" to me (probably 5 year old) car will cost me $600+/mo between insurance and payments.

I have a good relationship with my parents, so me moving out to live with roommates is pointless, I'd rather just stay living with my parents rather than some strangers. I've just been looking at moving out because living with my parents forever isn't ideal, especially when I marry and have kids I can't still be living with my parents.

I don't see a large increase in earning potential outside of the annual 3-4% COL raise at my job. X-ray technician is basically a terminal career, which I chose because I didn't want to go into massive amounts of college debt. To make more money I would have to go back to school and start over completely.

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Money & Coronavirus: How to Build an Emergency Fund (Part 2)

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[Transcribed and adapted from the YouTube video:Money & Coronavirus: How Much to Save’]

Key takeaways:

  • Emergencies are not the time to worry about savings rates—if you have the money, use it. 
  • It’s recommended that you see if halting 401k contributions, HSA contributions, or student loan payments are right for you. 
  • Do not take out any money from your 401k unless you’re absolutely desperate.
  • If you have variable income, build a buffer and plan accordingly.

On the last episode of ‘Money & Coronavirus: How Much Money to Save… ‘

Last time, we talked all about emergency funds, how to get one, why you should have one, and the psychology of saving your money. But, there’s a crucial component to owning your emergency fundyou actually have to use it when it’s an emergency!

Be honest, the pandemic is an emergency. It is 100% OK to use money from your emergency fund—we just need to be smart about it. 

Let’s go now to the psychology of using your emergency fund. I see a lot of people who have money saved up, but they are terrified to use it. This is the opposite of people who have a spending problem.

Bonus:If the COVID-19 pandemic has you worried about money, check out my free guide on Coronavirus-Proofing your Finances with the CEO approach

The psychology of spending an emergency fund

I hear a lot about these hyper frugalistas whose entire life is logging into their personal capital account and looking at it: “Oh no, I had a 29% savings rate last month, but my average is 33.3%. I’m really slipping. What’s wrong? I’ve got to get back on track because the community is not going to respect me enough. I need to get to 40%.”

Get a life. Please, do not end up on your deathbed feeling morally superior to other people because you have a 38% savings rate. 

I have heard people still going to work even though they have a huge emergency fund account. Why? You ask them, “Why are you still going to work and exposing yourself and potentially exposing other people?” “Well, what do you mean? That’s my job.” Then you say, “Don’t you have a savings account you’ve been saving for like 10 years?” and they don’t make the connection. It’s called an “emergency fund” for emergencies.

Don’t you think maybe a global pandemic that has stopped virtually 100% of businesses across the world would be classified as an emergency?

If you’ve got the money, it’s time to use it. Use it to live. Use it to help other people. Remember, you can always refill it later, but the craziest thing is that you have people who have done the right thing and saved, but they never built the muscle of spending it. 

It’s an emergency fund. If you need it, spend it. That’s the basic framework for how much to save right now.

Extra steps you can take to save for an emergency fund

Remember, one year’s worth of necessary expenses is my recommendation for how much should be in your emergency fund. If you take a look at your numbers and you say, “You know what? That’s impossible, but I think I can do eight months over the course of the next six months,” pat yourself on the back. 

What I want you to do is take action. I don’t want you to hear this number and get demoralized because you can’t do it overnight. 

Part of money is its patience. 

In fact, one of the biggest parts of earning a lot of money is being patient. In this case, you focus on what you can control, cut your expenses, earn more. Optimize your spending on all your bills. Call them up, negotiate, and take control.

Bonus: Want to turn your dream of working from home into a reality? Download my Ultimate Guide to Working from Home to learn how to make working from home work for YOU.

401k contributions, student loan payments, and HSA contributions during COVID-19

One question I’ve heard recently: “Would you recommend halting or minimizing your 401k contributions, your student loan payments, your HSA contributions until we build up at least one year of an emergency fund?” 

Yes, I would. Crazy to hear myself saying this, but yes, I would.

For example, your HSA contributions may be worth $10,000 over the course of the next 20 years. Okay, that’s a lot of money, but guess what? Today, in an employment scenario like this, I would rather have a couple thousand bucks now sitting in that savings account relative to $10,000 later.

Remember what I’m saying: You have to live to fight another day. If you have to take a little bit of a haircut on your $10,000 over the course of the next 30 years, it’s not a big deal. You can take the $2,000 that’s in your pocket and you can invest a little bit more aggressively next year or the year after, whenever things recover. 

If you’ve got that one-year emergency fund, you have earned the right to keep investing your money and you will benefit drastically from that opportunity over the long term because you did the work ahead of time. For those of you don’t have that, focus on that first. 

Should you take out the $100K with no penalty out of your 401k right now?

I would not do that unless it’s a dire case. I would say 50% of the time, I hear from people who took a loan against their 401k or pretty much took a loan, they never repay it. People who take loans out of their 401ks, in general, have poor behavioral control over their money. 

Even though they’ve done some amazing things to be able to waive some of the fees and penalties that used to be there, unless you absolutely need to, I would not recommend it.

Why? A couple of reasons. 

Number one, it’s a bad sign, overall. If you go raid your 401k it shows  that you haven’t done the other things, like saving properly. For most people, the other things can actually sustain you.

Second, don’t forget I talked about all these things you can do: call up your credit card company, talk to your landlord, research unemployment. If you’re unemployed, take advantage of it, please. It’s there for you. 

If you have to raid your 401k, then something has really gone wrong. Now, I’m not saying don’t ever do it, but it’s one of the sources of last resort. It might tide you over in the short term, but it will cost you dearly in the future. That money there will be highly lucrative to you in the long term if you can live to fight another day.

Bonus: Having more than one stream of income can help you through tough economic times. Learn how to start earning money on the side with my FREE Ultimate Guide to Making Money

How do you save for an emergency fund if you have variable income?

There are some guidelines for how much you can afford to spend on rent. In general, 28% is a good recommended number. These guidelines show how much people can spend on a rent or a mortgage, basically housing, a car, all debt combined, including student loan, credit card, et cetera. 

If you have a variable income that adds an extra layer of complexity. The way that you do it is you want to build a buffer. If your minimum expenses are $1,000 a month, you want to target 6 to 12 months of emergency fund. In this case, if you have $5,000 a month, you take $1,000 away, pay off your stuff, put $4,000 in your emergency fund, and then next month if you make zero, you can draw from there. In general, you want to build up a buffer and effectively simulate a standard 9-to-5 income.

Now, what does that mean specifically for you? It really depends on the numbers we’re talking about. If your variable income is $1,000 to $2,000 a month, that’s going to be a pretty low rent. Some freelancers, some months, make $30,000then they make zero for two months.

In general, I would err on the side of being conservative. Look at how much you’ve made over the last year just as a benchmark and then I would take a steep haircut for the next 12 months, again, depending on your industry.

Closing thoughts on saving and spending money during emergencies

We dove way deeper than just cutting back on $3 lattes. We talked about the structure and how much you need to actually save.

The psychology of an emergency fund goes even deeper: what does it mean to build an emergency fund? A lot of people go, “That’s overwhelming. I can’t do that.” Do not give up. Even if you get 70% of the way there, it’s better than zero. You have to save money right now. You can achieve itit will just take some time.

Finally, we talked about the psychology of spending. If you have an emergency fund, you have earned the right to deploy it. Spend it so you don’t have to go to work, spend it on your loved ones, and even continue investing if you have additional money.

Money & Coronavirus: How to Build an Emergency Fund (Part 2) is a post from: I Will Teach You To Be Rich.



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How to score cheap designer sunglasses

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Once upon a time, sunglasses were a sign of summer. But for reasons to do with both health and style, shades have become a staple accessory all year round. Gone are the days when we only wear sunglasses when it’s warm. People sport their sunglasses anytime they step outside.

More than a fashion statement, sunglasses have become a necessary accessory in your arsenal of protective gear for adults and kids alike.

It’s no wonder then that nowadays, you can find and purchase designer sunglasses at most retail stores. You’ll need them whether the sun is shining bright, you’re spending more time outdoors, or if you’re just driving your car during the day.

Protecting our eyesight from harmful rays while still being fashionable is the ideal. We hear how harmful and damaging UV rays can be on our eyes. With this awareness, we’ve increased our purchases of sunglasses — cheap sunglasses, polarized sunglasses, prescription sunglasses for people who need them. And with so many occasions calling for stylish eyewear, does anyone own just one pair anymore?

So we’re all looking for cheaper options to buy high quality, designer glasses that are affordable enough to stay within our budget.

When you’re looking to purchase a pair of sunglasses, they should be comfortable, protective, and affordable. Good quality, designer glasses don’t have to be expensive if you know some shopping secrets.

So, here are some things you should know before you shop so you can save the most money and get the perfect pair of sunglasses that fit well, look good, and don’t break the bank.

What Are the Benefits of Regular Vs. Prescription Sunnies?

Benefits of non-prescription sunnies

Regular, non-prescription sunglasses have a lot of benefits. They are almost always less expensive since they’re not specifically made for one person.

For those of you on a tight budget, you can even find some stylish sunglasses at the Dollar Tree for just a buck. They’re more of a one-size-fits-all selection, but they have some cute styles that are comparable to what you’d find in more expensive retail stores.

Of course, it goes without saying that the quality will not compare to designer or name brand glasses, but from the surface, they’re decent in appearance. I’ve purchased a pair or two of my sunnies from the Dollar Tree in the past and they last two to three seasons with no issues. So, if you’re in the market to buy faux designer glasses, check out the dollar stores for an extreme discount. If you find a style you like, buy a handful!

Buying regular sunglasses also gives you many more options. You can find a selection at virtually any store you regularly shop. And you can walk out of the store immediately after your purchase wearing your new favorite sunnies.

Purchasing online is easy as well. With no prescription necessary, you can choose any frame you want and have it delivered to you in days instead of weeks as with your traditional prescriptions that require sizing and special ordering.

Benefits of prescription sunnies

But don’t overlook the benefits you get from prescription glasses. They have a lot of perks and features that their non-prescription counterparts usually don’t.

As far as style, while they don’t have quite as many styles as the regular sunnies, their selection continues to increase. So, if you’re into fashion trends, you can still get a pair of prescription glasses without sacrificing style.

They also provide much more eye protection than regular sunglasses. They’re made specifically to help your vision improve, so protection is built right into the design. Since they’re made for your eyes only, the frame and other components are tailored to fit your face and features just right for the most comfort.

Prescription sunglasses may look to be more expensive on the surface, but applying your vision insurance and other savings plans (if you have either) can help reduce the cost significantly.

Did you know that most vision insurance plans cover the purchase of prescription sunglasses too?

With a prescription, you’re able to submit your claim to your insurance for coverage on the frame, the lenses, and your eye exam. You’ll get custom glasses from whichever designer name you choose, and most of the cost (if not all) can be covered, depending on your insurance policy.

If you need more information, read this article on what you need to know about vision insurance.

It’s a good idea to explore your vision insurance coverage before buying your new sunglasses. That way, you are aware of what’s covered so you can budget accordingly.

Also, it gives you the information needed to make an informed decision on the type of frames, lenses, what features you can add, and so on, so you can have the perfect pair for your eyes without paying all of the cost out of pocket.

Usually, insurance covers a portion of the cost for designer frames as well. So, it’s a good idea to check with your provider first.

You’ll be able to get features that help you see better and provide greater comfort. You may be able to get these features without a prescription, but with a prescription, your cost may be covered by you HSA or your insurance.

Protection features that may be covered by your insurance:

Polarized lens

Polarized lenses provide a filter that blocks glare and intense light that reflects off of surfaces like cars, water, glass, etc.

UV Ray protection 

If you’re looking for great UV protection, make sure your sunglasses are at least rated UV400 protection, which blocks 99.9% of UV rays, according to LensCrafters.

What Are Other Discounts if You Don’t Have Vision Insurance?

If you don’t have vision insurance, you may qualify to put this expense on your HSA, if your employer offers it.

HSA stands for Health Saving Account and it’s a benefit that some employers offer to their employees. The way it works is you determine how much per month is deducted from your paycheck to be transferred to this account, before taxes.

Then, as you get medical expenses (like purchasing prescription glasses), you submit your receipts and you get reimbursed from that savings account.

It’s a great way to lower your income tax bracket and have an account that covers the cost of things like your prescription lenses or glasses.

What if I Decide to Buy my Frames Separately, Will it Save Money on My Prescription Sunglasses? 

Yes, you can save money if you choose to purchase your frames and lenses separately. It’s a good idea to get your frames from a place that accepts your vision insurance, that way all or most of the cost is covered depending on your policy.

For designer frames, there are several options you can choose from to get the best price. Discount retailers like Ross, Marshalls, or TJ Maxx carry designer sunglasses at a fraction of the true retail cost.

Warehouse stores like Costco and Sam’s Club also carry a great selection of designer and name brand frames for less because they’re able to buy in bulk.

The Best Places to Find Designer Sunglasses for a Cheaper Price

If you just want a pair of good quality designer glasses without a prescription, there are several stores that offer great options for a cheap price.

As we mentioned, discount retail stores like Ross or Marshalls have a great selection of name brand glasses. Nordstrom Rack is another place to find designer sunnies at a discount price.

Retail outlets are also a great option. You may have to take a longer drive, but their prices are usually 50-75% off the retail price.

The difference between retail outlets and discount retailers like Ross or TJ Maxx is that you can choose the specific name brand you want to buy and you don’t have to sort through a selection of brands you’re not interested in.

If you want to buy your glasses online, there are several good options as well.

Sunglass Hut offers significant discounts for their online shoppers.

Lenscrafters also has good deals and sometimes offers discounted packages for multiple purchases.

Eyebuydirect.com offers its frames starting at $6, which is less than a fast-food meal. Talk about a bargain.

What Apps are Available for Finding Coupons on Sunglasses?

Rakuten is a great website to get cashback on all your purchases, including sunglasses. They offer cashback on thousands of retailers.

This is in addition to any savings you get from the retailer sales, which makes your purchase an even better deal.

All you have to do is log in to their site and let them redirect you to the retailer of your choice. You buy your glasses and it’s automatically tracked for cashback. Then, you get a “big fat check” in the mail at the end of every quarter. It’s that simple.

Groupon is another good place to find discounts on designer sunglasses. You can purchase with their discounts directly from their site.

RetailMeNot provides promo codes for your favorite stores, whether online or in-store. Be sure to choose the promo codes based on your shopping method so you can get the discount applied.

Here’s a Bonus Tip to Save Money on Your Sunglasses This Year. 

Shop off-season.

During the spring and summer months, everyone is shopping for summer accessories. The high demand means higher prices on things like shades.

But, if you wait until fall and winter, most of those summertime items will have closeout prices, since the retailer wants to make room for next year’s styles and fashion. This is the perfect opportunity for you to grab shades and glasses at heavily discounted prices. It’s the best time to save the most money.

It is Possible to Find Designer Sunglasses at an Affordable Price

You can have designer sunglasses without spending a fortune. There are online discount retailers, cashback opportunities, and promo codes at every corner of the web. All of these tools can help you shave down the total price that you pay for your sunnies.

You can also shop at discount retail chains and warehouse retail stores. They specialize in cutting costs to transfer those savings on to their customer. They have a sizable collection and you’ll be able to save money on your frames during their sales and other promotions.

There’s no need to pay full price for your sunglasses. Do your research and find stores near you or online that are offering sales on eyeglasses and use the couponing and cashback apps to make the deal even sweeter.

Even if you’re in need of prescription sunglasses, check with your vision insurance carrier and find out how much of your cost can be covered. To save even more money, check with your employer to find out if there are other benefits like an HSA (Health Savings Account) that can reimburse some or all of your costs.

With so many affordable budget-friendly options for good quality sunglasses, you’ll have no trouble finding the perfect pair of sunnies to fit your style and your budget.

–By Gina Zakaria

 

The post How to score cheap designer sunglasses appeared first on Penny Pinchin' Mom.



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How We Deal With Picky Eaters

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When I talk about cutting your grocery bill, I often will hear from people who will ask, “What do you do about picky eaters?”

As you probably have gathered from our sometimes non-conventional menu plans, we don’t base our menu plans upon picky eating palates. Instead, we based them upon what’s on sale at the store and what we have on hand.

Our kids have learned from a young age that I don’t cater to their whims and wishes when it comes to food. We stick with a budget and we shop the sales and markdowns.

Much of the time, that means I find at least a few great deals each week on some of their favorite foods (and I try to stock up as much as I can when I do!). However, sticking with a budget means that I’ve at least somewhat regularly served things for meals that the kids didn’t think they would like.

When it comes to encouraging our kids to eat foods they either don’t really like (or just haven’t tried and think they won’t like), here’s how we approach it at our house:

1. You have to eat three bites.

I know it might almost sound a little juvenile, but for some reason, limiting it to three bites seems to be very doable for our picky eater(s) and they rarely complain because they know that three bites is all that is required.

Note: The adults need to set the example here. If Mom and Dad are picky, there’s a good chance that it’s going to trickle down to some of your kids, too. Set a good example of gratefully eating food set in front of you and not complaining about food… your kids are watching and picking up on your example more than you know!

2. If you complain, you have to eat three more bites.

It is such a gift to have food to eat and I never want my kids to forget that. Even if you don’t like something, you don’t have to complain about it.

So we’ve instituted the rule that if you complain about something, you have to eat three more bites. This cuts down significantly on any complaining! 🙂

3. Once you’ve eaten three bites, you can make something else for your dinner.

We’ve found that oftentimes, the kids will think they won’t like something at all, but then they’ll change their mind once they’ve eaten three bites and they’ll end up eating a full serving. If they still decide that they don’t like something after three bites, they can eat the sides fixed for dinner and fix something else, as well.

The kids know that they can fix themselves yogurt, oatmeal, cereal, scrambled or fried eggs, oatmeal, or mac and cheese to go along with dinner at any time — so long as they’ve eaten their required three bites.

That’s right, I let them fix it themselves (and they are expected to clean up after themselves, too). This keeps it simple for me, but it still makes sure that they are eating enough at dinner time.

As our kids have gotten older, we’ve found that they’ve become more accustomed to different foods because of this simple system. In fact, these days, it’s rare that they fix something extra for dinner — because the three bites rule really helped them to slowly expand their palate.

They’ve now become quite adventuresome in their eating and will often choose to eat something that they don’t think they’ll like just because they want to try it! I can’t guarantee that what has worked at our house will work at yours, but hey, if you’re struggling with picky eaters, let me know if you give it a try!

An Important Note: I know that some kids genuinely have severe sensory issues when it comes to certain textures of foods or certain other issues that are very legitimate reasons for them having a “picky palate”. I’m not saying you need to or should force a child to eat three bites of something — especially in this case. You know your child and their unique needs and I think each parent should decide what would be best for each child.

How do you deal with picky eaters at your house? I’d love to hear! Tell us in the comments!



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