Easy Ways to Save on Your Water Bill

SaveOnWaterBillYou know there’s money to be saved by using less water in and around your home, but you aren’t quite ready to put a brick in your toilet tank or reduce your shower flow to a trickle. Have no fear; there are still steps you can take to seriously reduce your water bill each month.

  • Take shorter showers.
  • Fix leaks to faucets or pipes.
  • Only do full loads of laundry or dishes.
  • Don’t leave the faucet on while you brush your teeth or shave.
  • Buy more efficient appliances, like a laundry machine or toilet.
  • Use a dishwasher instead of doing dishes by hand.
  • Put food coloring into your toilet tank and see if the dye ends up in the bowl. If it does, you have a leak and you are wasting hundreds of gallons of water each day.
  • Capture rainwater to water the lawn or plants during dry times.
  • Use hose water to clean—such as the sidewalk, gutters, or roof—as infrequently as possible.
  • Don’t water your lawn on windy days.
  • If your children want to cool off during the summer, use a small pool instead of constant-stream water toys.
  • Choose plants, flower, shrubs or trees that don’t require a lot of water.
  • Wash your car at a car wash instead of at home.
  • Don’t use the toilet as a wastebasket. Throw everything you can into the trash instead.
  • Put a plastic bottle full of water into your toilet tank to reduce the amount of water that is fed into the tank each time you flush.
  • Avoid using your sink’s garbage disposal feature.
  • Put mulch around plants to slow the evaporation of water.
  • Teach your children to turn off faucets properly.
  • Shower instead of taking a bath.
  • Don’t thaw food by running water over it. Thaw it in the microwave instead.
  • Keep cool water in the refrigerator so you don’t have to run the tap water until it turns cold when you want a drink.
  • Replace your toilet flapper if it doesn’t close properly. It’s the rubber stopper at the bottom of the tank.
  • Save the water you use to rinse fruit and vegetables and use it water your house plants.
  • Wash your pet in an area of the lawn that needs watering.

You will likely find that one or two of these actions alone won’t put you on easy street. However, if you are conscientious about your water use, the savings could add up to hundreds of dollars more in your pocket every year.


© 2013 BALANCE

The Finances of Becoming a New Parent

Cute KidHow can something so small cause such a major upheaval in your life? Not the least of this upheaval is financial. In 2013, the U.S. Department of Agriculture estimated that the average middle-income family will spend over $241,080 raising a child until the age 18—and that does not include any college costs.

But just as you find the extra time and energy you will need to take care of the little bundle of consuming joy, you will find ways to work it out financially.

Planning for Parenthood Brace yourself. You will be spending much more than expected to buy things you never even thought of. Start planning financially for having a baby as soon as you can—before conception if possible.

Set aside as much as you can every month in a savings account. The actual event of birth can be expensive as well as all the first time purchases you’ll make. Don’t forget to save some money for your maternity or paternity leave. This is usually unpaid time off work.

How much do you need? As much as you can save. Any funds left over make a great starter for a college fund. If you’ve amassed a considerable amount well before the due date, you can invest in a short-term certificate or other insured investment. But don’t tie up your entire fund in investments. Babies will not sign contracts and they have not agreed to your schedule.

Have a brainstorming session with an experienced parent to figure out all the things you need to purchase before the delivery. It will be extremely helpful to have most of what you need before the baby is born. Your spare shopping time after birth is reduced drastically. If you need to shop after the baby is born, try the Internet. Nobody on the Internet cares how loud your baby is crying, what you are wearing or what time it is when your baby gives you a free moment to shop.

Here’s a starter list for your brainstorming session. This is far from a complete list, but it will help get you thinking.

  • Car Seat By law, you can’t even take the baby home from the hospital without one.
  • Crib You want one that meets the highest safety standards.
  • Bassinet One with wheels will add to your mobility around the house.
  • Stroller Consider getting one that’s part of a stroller/car seat combo. It makes transitions easier.
  • Baby Monitor “Baby calling Parents, come in, Parents.”
  • Safety Gate Keep your newly mobile child away from staircases and other hazards.

Maternity and Paternity Leave Most companies don’t provide paid maternity leave—and don’t have to. The Family and Medical Leave Act, which only applies if a company has more than 50 employees, ensures mothers should be able to return to their old job or an equivalent job up to 12 weeks after they begin their leave. The actual policy varies from company to company, especially if the company has fewer than 50 employees.

If you are a father, ask your employer about paternity leave. The Family and Medical Leave Act does not cover this time, but many employers are offering the same or similar benefits to their male employees.

Plan monetarily for maternity and paternity leave, as it is unpaid. You may be able to save up sick time and vacation time to continue receiving income for several weeks. But most likely, you will lose some income during this time.

Copyright © Visa

Handling the Unexpected

Unexpected PictureThere’s nothing harder to plan for than unexpected events that impact your life and finances. Yet loss of a job, the death of a loved one, illness or other unexpected occurrences happen at one point or another in most of our lives. The key to successfully surviving these life-changing events from a financial perspective is to anticipate hard times. Shore up your financial situation before you are hit with an unexpected expense, so you will be covered in the event something happens.

The Importance of an Emergency Fund Because we cannot predict when life will throw us an unexpected challenge, it is important for everyone to build and maintain an emergency fund with three to six months’ worth of living expenses. The key to building an emergency fund is to set money aside every month, no matter how small the amount. This Emergency Fund calculator can help you get started.

Financial experts recommend that, unlike retirement funds, emergency savings should be kept fairly liquid, in a savings account or a money market fund. Hopefully you will never need it. But if you do, you’ll be glad it’s there.

A New Financial Picture Once the immediate financial matters are taken care of after an unexpected life event, it will be time to take stock of your new financial situation and create a plan for yourself moving forward. Whether you have faced job loss, divorce, illness or another event, you should create a new budget reflecting your situation. This is the first step toward financial security and rebuilding your emergency fund, which you may have tapped into to manage a financial crisis.

To develop a budget, write down your current expenses, indicating whether each expense is a necessity or a luxury. Pulling out recent credit card bills and bank statements can help with this process. Next, estimate your monthly income, including only income that you are certain you will receive. Then compare your income to expenses. If your expenses are higher, you will need to trim your expenses until your income is higher than your expenditures.


Copyright © Visa

Use Children’s Allowance to Teach Valuable Money Skills


One of the hardest parts of parenting is allowing your children the freedom to learn from their own mistakes. We all want to protect our kids from harm, but if sheltered too much, they won’t be ready to deal with real-world challenges when they leave the nest. This is true for managing money just as with avoiding physically dangerous situations.

So, how to teach your kids sound financial habits? Try setting a good example with your own spending behavior. If you consistently spend beyond your means, don’t set aside emergency savings and don’t use a budget, your kids might imitate your behavior and set themselves up for problems down the road.

Involve your kids in budgeting for their own expenses at an early age. How you structure an allowance, what expenses it should be used for and the appropriate age at which to begin will vary by family, but here are a few helpful guidelines:

The goal of an allowance should be to teach children how to handle money wisely, not to reinforce good behavior—otherwise, your kids might think it’s okay to forego completing chores, getting good grades or treating others well, if the only consequence is missing out on a few dollars. It’s better to link those good behaviors to developing a sense of family responsibility and cooperation. Plus, when you put a price tag on good behavior, you might start seeing an outthrust palm every time you ask them to answer the phone or pass the salt.

Develop a needs-based allowance amount. Track your kids’ discretionary (toys, candy) and non-discretionary (school lunches, school supplies, clothes) expenses. (You’ll be shocked.) Then, depending on their ages and maturity, decide which expenses you want them responsible for managing, and set a reasonable amount for each category—this will be their allowance.

Start out slowly with only a few discretionary expenses, then gradually add others and increase their allowance as they become more confident. Realize that they’ll probably make a few mistakes—that’s part of the learning process.

Stick to your guns. If your son burns through his allowance by Tuesday and then begs for a new toy on Wednesday, tell him “no;” giving in sends a mixed message about the importance of budgeting. Use it as an opportunity to explain the importance of saving for things they really want and learning to live without those that don’t matter. Nobody likes delayed gratification, but the sooner they learn it, the easier life will be later on.

Use an allowance to teach important life lessons. Try to include an amount your kids can set aside for charitable giving. For example, my son knows he must donate 10 percent of his allowance to charity. Dedicate another portion to savings. You might offer to match savings account contributions to teach the value (and rewards) of saving.

Remember, the sooner your kids learn how to manage their own money, the sooner you’ll be able to concentrate on your own.


By Jason Alderman

The Basics of Social Security Retirement Benefits

retirement just aheadIf you’ve worked for many years, you may be ready to start a new, more relaxed phase of your life: retirement. However, before giving your employer your final notice, understand how Social Security retirement benefits work for you.

What are Social Security Retirement Benefits?

Social Security retirement benefits are monthly payments made to workers who have paid Social Security taxes and earned Social Security credits. Most people earn the maximum of four credits per year. Credits are based on how much you earn – for example, in 2006, you would receive one credit for each $970 you make. The amount of earnings needed for a credit increases annually.

The number of credits you need to receive retirement benefits depends on the your date of birth: if you were born in 1929 or later, you will need 40 credits, which totals ten years of work; if you were born before that, fewer than 40 credits are needed.

If you took time off during your working life, don’t worry about losing the credits you earned – they remained on your Social Security record and when you returned to work, were added to more qualifying credits.

Benefits Plus Savings

Bear in mind that Social Security benefits are only meant to make up part of your retirement income. When planning, the general rule of thumb is you will need about 70 percent of your pre-retirement earnings to maintain your current standard of living. Social Security retirement benefits generally replace only about 40 percent of that sum.

So where should the remaining 30 percent come from? Savings (such as money you’ve set aside in a 401(k), 403(b), IRA, or other investments), and if your company offers it, a pension plan.

Effect of Retirement Age on Benefits

The age you begin to receive your benefits determines how much you get each month. The longer you wait, the bigger the check:

Full Retirement

Full retirement age for people born before 1938 was age 65. Due to greater life expectancies, the full retirement age is increasing gradually, and will reach age 67 for those born in 1960 or later. Retiring at this age will ensure the retiree receives full benefits.

Early Retirement

Regardless of your full retirement age, you may start receiving benefits as early as age 62. If you retire early, though, your benefits will be permanently reduced based on the number of months you receive checks before you reach full retirement age. Early retirement gives about the same total Social Security benefits over a lifetime as full retirement, but in smaller monthly amounts, since they take into account the longer period they will be paid out.

Delayed Retirement

Many people continue to work past their full retirement age. If you do, your Social Security benefits can be increased in two ways: (1) Each additional year of work adds another year of earnings to the Social Security record. Higher lifetime earnings may result in higher benefits; (2) Benefits will be increased by a certain percentage (depending on your year of birth) if you delay retirement. The increase ends at age 70.

How Much Can Be Received

Benefit amounts are based on earnings averaged over your working career. Therefore, the higher your lifetime earnings, the higher your benefits will be. There is no need to guess what your benefits will be either – the Social Security Administration is required by law to provide a personalized benefit estimate to each worker once per year.

In most cases you do not have to pay taxes on Social Security benefits. They only would be taxed if you have substantial income in addition to your Social Security benefits.

Who May Receive Benefits

Retirement benefits are for both you (the person who worked and earned credits) and for qualifying members of your family. This includes:

• A widow or widower
• Current and former spouses of retirement age
• Spouse under retirement age, if responsible for the earner’s minor child
• Minor children
• Adult disabled children

So are you ready to retire and begin receiving your Social Security benefits? Only you know for sure. Just be sure you make your decision after you have analyzed your financial situation thoroughly.

Copyright © 2006 Balance

Coverdell Education Savings Accounts

College_SavingsCoverdell Education Savings Accounts are a tax-advantaged way to build funds for your child’s education. They may be used along with other investment accounts, such as 529 plans and education savings bonds.

Who may use a Coverdell Most people can use a Coverdell plan, though if your modified adjusted gross income is very high (between $95,000 and $110,000 for single filers and between $190,000 and $220,000 for joint filers) the amount you can contribute is reduced or phased out entirely. For example, if you are single and your income is somewhere between $95,000 and $110,000, then you can deposit half of the maximum into the account. The maximum contribution amount is $2,000 per year, and you can make this annual contribution until your child—the beneficiary—reaches 18.

Tax rules change, so be sure to contact the Internal Revenue Service at www.irs.gov or call them at (800) 829-1040 for the most current information.

Tax benefits Coverdell plans come with some excellent tax advantages. Though contributions aren’t tax deductible, the investment earnings accumulate tax-free, and qualified distributions are totally exempt from federal income tax. In many cases you can also claim the Hope Scholarship and/or the Lifetime Learning tax credit in the same year you withdraw funds.

Qualified expenses You can use the funds in a Coverdell for primary, secondary, and postsecondary education expenses—in other words, kindergarten though graduate school. Qualified costs include tuition, fees, tutoring, books, supplies and equipment, room and board, uniforms, transportation, and sometimes computers.

If you don’t use the money for qualified expenses The money you save and invest in a Coverdell must be used by the time the child reaches age 30 or the earnings will be taxed as ordinary income plus a 10 percent penalty. If the plan’s beneficiary dies or becomes disabled, non-qualified distributions will be free of income tax. If you cannot use the money for the student you were initially saving for, you may roll the account over to another Coverdell account for a different family member.

How to open a Coverdell You can set up a Coverdell at many financial institutions, mutual fund companies, and brokerage houses. Once you open the account, you can immediately begin to invest the money and build funds. Unlike 529 plans, your investment options are virtually unlimited. You can buy and sell all bonds, stocks, and mutual funds with the money in your account. As the plan’s owner, you—not an account manager—make the decisions.

Therefore, it is important to understand at least the basics of investing so you can make wise financial choices, or consult with a financial advisor to help you make knowledgeable decisions. You don’t want to put your savings at so much risk where the funds may not be there when you need them, nor do you want to keep your money in investments that have such limited growth potential that there won’t be enough for your child’s educational needs.

Education costs can be very expensive, and saving for these expenses at a tax advantage just makes sense. The sooner you—and your child—will be able to reap the reward of early investing.


Copyright © 2007 Balance