12 Things to Do When You Get a Raise at Work

Getting a raise always feels great. It’s tangible proof that you’re good at what you do and your hard work has been recognized.

But what should you do with the extra income? While most of us can’t help but daydream about all the new things we plan to buy, it’s important to take a close look at your personal finances before going on a spending spree.

That way, you’ll have a clear idea of how much your pay raise actually amounts to, what your financial priorities are, and how to make smarter investments and purchases with your additional income.

How to Handle a Salary Increase

When you first get a raise, it’s tempting to make a big, celebratory purchase. But before you do, there are some steps you should take to ensure you’re making decisions that reinforce your financial stability and improve your financial future.

1. Give It Some Time

Initially, the dollar amount of your raise might sound like a significant windfall, but remember that a considerable portion will go toward taxes, health insurance, retirement, and social security, if applicable.

Before you get ahead of yourself, wait for a couple of paychecks to see how much extra take-home cash your raise amounts to on a biweekly or monthly basis. What sounds good on paper may be significantly less in your pocket after all is said and done.

You can also calculate the biweekly amount of your raise yourself, but it won’t be accurate unless you know the amounts of any relevant deductions.

Waiting it out will give you a chance to see real numbers and how much of a difference it’s actually making on each paycheck. This will allow you to determine what any extra money amounts to so that you can spend it wisely instead of overspending or accidentally increasing your monthly expenses.

2. Reassess Your Budget

Once you know how much your new salary increase will put in your bank account, use it as an opportunity to reevaluate your budget. Now’s a great time to review your expenses to determine where any adjustments can be made and how your raise can do the most good.

For example, you may want to allocate a portion of your salary increase to paying off credit card or student loan debt instead of booking an expensive vacation. Or, you may use the extra cash to bolster your rainy day fund.

It’s easy to fall victim to lifestyle creep after a pay increase by indulging in luxuries and not keeping a close eye on your spending habits. Budgeting helps to keep you in check and supports your financial goals.

Instead of increasing your spending on big-ticket upgrades to your lifestyle each time you get a raise, consider how higher bills will affect your financial health. How would buying a bigger home or a new car affect your retirement plans and how much debt you have?

Use your budget to keep an eye on your cost of living so you don’t accidentally overspend after a new raise.

3. Retool Your Retirement

Especially if you aren’t hard up for cash right now, you can use your salary increase to boost your retirement savings.

For example, you can increase the amount you put into your Roth IRA or 401k retirement accounts. Even a small monthly increase can make a significant impact over time, especially if your employer offers contribution matching.

Not only will investing more in your retirement give you long-term financial security, but it will also make sure your raise is put to good use.

4. Pay Off Debts

If you have debts, entering a new salary range is an ideal way to put more money toward paying them off. For example, you can use your pay increase to cover:

  • Credit card debt
  • Student loans
  • Car loans
  • Medical debt
  • Personal loans

The more debt you pay off, the more you save in interest charges over time, keeping a significant amount of money in your pocket. If possible, save the most by paying off debts entirely instead of just making payments.

You can even improve your credit score by paying off debts, helping your financial situation even more, especially if you plan to make any big purchases, such as a home, in the future.

5. Plan for Taxes

When you get a raise, you can expect to pay more in taxes this year than you did last year. Depending on which tax bracket you’re in, you may even find that your raise is barely noticeable if it means you no longer qualify for certain deductions or tax credits.

Understanding how your new salary will affect your taxes gives you an idea of whether you should expect a refund or a bill.

If you aren’t comfortable calculating or assessing your taxes yourself, get in touch with an accountant or financial planner. They’ll be able to give you a good idea of what to expect come tax time based on your pay increase.

If it looks like you’ll owe more money at the end of the year than you anticipated, talk to your employer about increasing your withholdings so the amount you owe is covered.

6. Increase Charitable Donations

Another way to spend your raise is to increase your donations to charities and nonprofit organizations. Not only will it spread the wealth, but charitable donations typically count as tax deductions, potentially reducing the amount you owe each year.

This is especially useful if your raise bumped you into a higher tax bracket.

You can either choose to donate a specific dollar amount or a percentage of your income, whichever works best for your budget. You can also donate items like a used car, however, you’ll need a tax receipt in order to claim it on your taxes.

7. Add to Your Emergency Fund

Your emergency or rainy day fund is meant to lend a hand when your financial situation changes or you need to make an unexpected purchase. For example, it’s helpful to have a buffer of cash set aside if you lose a job or your fridge decides to stop working.

If you don’t have any pressing purchases to make with your new raise, it’s an ideal time to fill up your emergency fund. Having funds you can rely on in the future will give you peace of mind and save you from having to panic about how to cover an expense during a stressful situation.

8. Monitor Your Spending

It’s completely acceptable to celebrate when you get a raise, but it’s important to keep your spending in check. A nice dinner or night out is one thing, but extended overspending and unaffordable purchases are another.

If you do decide to treat yourself — and you should — make sure whatever you reward yourself with is within your spending limits and that it’s a one-time occurrence. Otherwise, you’ll soon fall victim to lifestyle creep and those luxuries will become the norm.

Choose one or two ways to treat yourself and stop there. Just because you’re making more money doesn’t mean you need to spend your entire raise on frivolous items and outings.

9. Consider Inflation

If you haven’t had a raise in a while, you can safely assume that part of your salary increase will go toward covering the costs of inflation. That means that instead of adding up to extra cash in your pocket, your raise will go toward rising prices for everyday expenses like housing and groceries.

Before spending your raise, take a look at the inflation rate to see how much prices have increased since the last time you received a pay bump. This will give you a better understanding of how much added buying power your raise amounts to and what it will mean for your budget and financial planning.

10. Save for a Big Purchase

If you’re planning to make a big purchase in the near future, use your raise to help get you closer to your goal. For example, put it toward:

  • A down payment on a house
  • A wedding
  • A new vehicle
  • A dream vacation
  • Your child’s tuition
  • A home renovation

Consider whether you have any major expenses coming up before spending your raise elsewhere. Setting aside your extra cash to cover upcoming costs will allow you to reach your goals faster and help you to navigate any unexpected costs you encounter.

11. Invest in Yourself

Investing in yourself is an excellent way to use your raise. For example, you could:

You can even do something like get laser eye surgery or have an old tattoo removed. Whatever helps to improve your personal quality of life and makes your future happier and healthier.

12. Do Something Fun

At the end of the day, you earned a raise through your hard work and dedication. You deserve to acknowledge your accomplishment by treating yourself to something special. Whether it’s a new pair of shoes or a fancy dinner, make sure at least a small portion of your raise goes toward celebrating your success.

Depending on how big your raise is and what you have left after you take care of any financial priorities, you could:

  • Go on a vacation
  • Plan a spa day
  • Buy yourself something nice
  • Treat a loved one
  • Fund a hobby

Take this as an opportunity to recognize your professional achievements and reward yourself for a job well done.


Final Word

Moving up on the pay scale is always worth celebrating, whether it comes with new responsibilities or not. But before you spend all your new money, take some time to consider how to get the most out of it.

That could mean reviewing your budget, paying off debts, or saving up for a big purchase — whatever suits your financial goals and situation.

Regardless of how you choose to spend your raise, remember to set some money aside to treat yourself. After all the time and effort you put into your career, you deserve to celebrate your accomplishments.

Source: moneycrashers.com

Bank of America Customized Cash Rewards Secured Card – 3/2/1% Cashback & No Annual Fee

Bank of America’s Cash Rewards card, now called Customized Cash Rewards, has no annual fee and offers 1% cash back on all purchases; 2% or 3% on select categories. It’s notable that there’s also a Secured version of the card which is very similar to the ordinary version and is one of the best secured cards available.

Bank of America Customized Cash Rewards Secured Card

Card Details

  • No annual fee
  • A minimum refundable security deposit of $300 (maximum of $4,900) is required to open this account.
    • Your maximum credit limit will be determined by the amount of the security deposit you provide, your income and your ability to pay the credit line established. If you provide a deposit that exceeds the calculated maximum amount based on your ability to pay, a check will be returned to you for the difference.
  • 3% foreign transaction fee
  • Rewards earnings rates go as follows:
    • 3% cash back in the category of your choice: gas, online shopping, dining, travel, drug stores, or home improvement/furnishings
    • 2% cash back at grocery stores and wholesale clubs
    • 1% cash back on all other purchases
  • You’ll earn 3% and 2% cash back on the first $2,500 in combined choice category/grocery store/wholesale club purchases each quarter, then earn 1% with no limit. Each month, as you plan for future purchases, to change your 3% choice category you must go to Online Banking or use the Mobile Banking App. Rewards do not expire.
  • Cash rewards can be redeemed as a statement credit to your credit or a deposit to your Bank of America checking, savings, or Merrill investing account.
  • 23.99% APR
  • No signup bonus on the Secured card version

Our Verdict

Not many Secured cards come with no annual fee and still offer rewards. There are a few other option that offer the same, though the Bank of America Customized Cash Rewards card is from a major bank and could be helpful in establishing a relationship with the bank. Bank of America also offers a Secured version of their Unlimited Cash Rewards card, so be sure to compare which is best for you. The Discover secured card is another good option for a secured card. All of these are solid options for someone who is struggling to get a credit card and wants to build a credit history.

Hat tip to reader Cyan

Source: doctorofcredit.com

5 Reasons to Claim Social Security ASAP

Happy senior couple
Monkey Business Images / Shutterstock.com

Many people believe that claiming Social Security benefits as early as possible — which generally is age 62 — is inherently bad, since claiming before your full retirement age means smaller monthly payments.

However, the reality is that everyone’s circumstances are different. For some retirees, it makes sense to start claiming benefits as soon as possible.

Following are several situations in which you should not put off claiming your Social Security retirement benefits.

1. You have a short life expectancy

The amount of your monthly Social Security retirement benefit payment is based on a formula that’s meant to be actuarially neutral. That basically means you should receive the same total amount of benefits over your lifetime regardless of the age at which you start claiming them.

In other words, if you claim earlier than your full retirement age as determined by the Social Security Administration, you will receive smaller monthly payments over a longer period of time. If you delay claiming until you’re older, you’ll be getting larger payments over what is likely to be a shorter period of time.

If you expect to have a short life expectancy, it might make more sense to start taking the smaller monthly benefit as soon as you can.

Money Talks News founder Stacy Johnson details one such situation in “2-Minute Money Manager: Should I Wait to Take Social Security?” He writes:

“A few years ago, one of my best friends asked if he should take his pension early, and I said, ‘Hell, yes.’ Why? Because he wasn’t in great shape, health-wise. Both of his parents died young, his siblings died young, and he really needed the money. So, my advice to him was, ‘Take it as soon as you can get it.’ He died one year later.”

2. You need the money

You also might need the money immediately to stay on top of your living expenses.

“You’d be surprised at the number of people who end up retiring before they want to,” says Devin Carroll, founder of the blog Social Security Intelligence. “There are lots of reasons — including being laid off or dealing with health issues — that you have to stop working.”

However, remember that the age at which you claim determines the size of your monthly benefit going forward. In other words, the longer you can postpone claiming, the bigger the benefit you’ll get each month after you do claim.

So, if that sounds good to you, first explore other ways that you could bring in extra income, enabling you to postpone claiming. For example, check out articles like “21 Ways Retirees Can Bring in Extra Money in 2021.”

3. You’ve got kids at home

“Increasingly, people are reaching age 62 and still have minor children at home,” notes Carroll.

When that’s the case, claiming your Social Security benefits early makes sense in that it generally enables you to apply for additional benefits to help you care for minor children. That’s because you must apply for your retirement benefits before you can apply for benefits related to dependents.

4. A higher-earning spouse has health problems

It’s kind of morbid, but when deciding whether to start taking Social Security benefits at age 62, you also need to think about when your spouse might die — and how much he or she makes in comparison with you.

One situation to consider is when the higher-earning spouse has medical problems, says Carroll.

That’s because, after a spouse dies, you may become eligible for survivor benefits (also called widow’s or widower’s benefits) based on the spouse’s Social Security. And if your spouse has a short life expectancy, and you know your survivor benefits would be more than your own full retirement benefit, there may be no reason for you to wait for your full retirement benefit.

To learn more about this subject, check out “Social Security Q&A: How Do Spousal Benefits Work?”

5. A lower-earning spouse is older than you

Maybe your spouse earned much less than you during your working years.

“Their own benefit is going to be lower than yours,” says Carroll. “In fact, their benefit might even be lower than the spousal benefit they’d receive based on your earnings.”

However, as with benefits issued based on your own work history, your partner can only claim a spousal benefit based on your work history after you file for your own retirement benefits.

Add up the cumulative benefits, suggests Carroll. You might discover that your total monthly income is better when you file for your benefit early and your older spouse elects to take the spousal benefit.

A final word: Work with an expert

Before making decisions, though, be sure to work out the math and compare your options. Social Security rules are complex and situations vary.

Also, consider reviewing your situation with a Social Security Administration representative or a knowledgeable retirement planning professional.

At the least, you could obtain a custom analysis of your claiming options from a specialized company like Social Security Choices.

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

Source: moneytalksnews.com

On Desert Ground: Steven Seagal Selling 12-Acre Spread in Scottsdale

The action star Steven Seagal has decided to sell his high-drama hacienda in Scottsdale, AZ, a rugged 12-acre estate he has listed for $3,775,000.

After marrying his fourth wife, Erdenetuya Seagal, in 2009, the “Under Siege” tough guy bought the dramatic desert digs for $3.5 million in 2010. The outspoken conservative turned reality-show cop has ties with controversial former Maricopa County Sheriff Joe Arpaio, and even toyed with running for governor of Arizona in 2014, according to the Washington Post.

But his political run in the desert never materialized, because Seagal hadn’t yet reached the five-year residency threshold for eligibility.

Now, it seems he’s moved on from the Grand Canyon State, leaving behind this exquisite 2001-built home with five bedrooms, 5.5 bathrooms, and nearly 9,000 square feet, sitting on 12 acres of pristine desert in north Scottsdale.

With views of the Chiricahua Golf Course and city views of Phoenix and Scottsdale, the home is built for luxury living, in harmony with the rugged desert that surrounds it.

Highlights of the home include a home theater, copper roof, a three-car garage with copper doors, negative-edge heated pool, and 600-square-foot guesthouse.

Exterior of Steven Seagal's desert homeExterior of Steven Seagal's desert home
Exterior

(realtor.com)

Stairs in Steven Seagal desert home in Scottsdale Stairs in Steven Seagal desert home in Scottsdale
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Family room at Steven Seagal home in Scottsdale Family room at Steven Seagal home in Scottsdale
Family room

(realtor.com)

Steven Seagal dining room in Scottsdale home Steven Seagal dining room in Scottsdale home
Dining room

(realtor.com)

Kitchen in Steven Seagal Scottsdale, AZ home Kitchen in Steven Seagal Scottsdale, AZ home
Kitchen

(realtor.com)

Main bedroom suite Steven Seagal home Main bedroom suite Steven Seagal home
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(realtor.com)

Home theater in Steven Seagal home in Scottsdale Home theater in Steven Seagal home in Scottsdale
Home theater

(realtor.com)

Patio Steven Seagal home in Scottsdale, AZPatio Steven Seagal home in Scottsdale, AZ
Patio

(realtor.com)

These days, Seagal likes to spend time in Russia with his bro Vladimir Putin, whom he has called “one of the great living world leaders,” procuring Russian citizenship in the process. Seagal is also a citizen of Serbia, where he owns a martial arts studio.

Seagal is currently on tour in Europe telling tales from his colorful life and career. He’s also no stranger to real estate deals. The star of “Above the Law” owned properties in Eads, TN, and across California over the years, including a Hollywood mansion purchased by actress Reese Witherspoon and a plot of undeveloped land in Montague, CA, near Oregon, according to Variety.

Now a lucky buyer has the chance to live like a star and scoop up this delicious desert dojo with 1990s action-star pedigree. Kimonos entirely optional.

Source: realtor.com

5 Reasons You Should Not Delay Retirement

Grandfather reading to his granddaughter
LightField Studios / Shutterstock.com

Some people view retirement as something that should be delayed as long as possible. They say that, for many older workers, waiting as long as possible to collect Social Security benefits is the prudent choice.

Important as this advice is for many of us, it may not apply to you. If you are financially prepared, there are good reasons to consider retiring at the traditional age of 65, or maybe even sooner.

“Time is the most valuable asset anyone can ever have,” Mike Kern, a certified public accountant based in South Carolina, tells Money Talks News. “I would encourage anyone who has the ability and wants to retire early to do so.”

There is plenty to see, do and learn in retirement. Many retirees go on to pursue new careers or fulfill lifetime goals they didn’t have time for when they were working. Freed from the burden of a 9-to-5 job, they find that life has many new possibilities.

What follows are powerful reasons not to delay your retirement.

1. Delaying Social Security may not be right for you

Before deciding, consider your personal circumstances, advises Money Talks News founder Stacy Johnson:

“For some people it’s a great idea to take Social Security early, and for some people it’s a great idea to wait.”

You generally can start receiving Social Security as soon as age 62. Some people wait as late as age 70. If you plan to continue working until your benefits reach their maximum at age 70, delaying your claim will result in greater monthly payouts. However, if you have concerns about how long you may live or you need the money right away, filing an early claim may make the most sense.

Good to know: The system is actuarially neutral, designed to make your overall benefits work out approximately the same over the course of your retirement, no matter when you first claim them. Delaying your first claim increases your monthly retirement benefit, but it may not affect the total amount you receive over a lifetime.

2. Retirement can lower your housing costs

When you retire, you no longer need to live close to a job. Where you decide to live in retirement can affect your quality of life, due in part to the price of real estate and rental homes.

“Your house is typically the biggest expense in your budget,” says Kern. “Oftentimes, the best way to considerably decrease your costs is by downsizing or moving to a cheaper place.”

Smaller towns generally have less-expensive housing than large metropolitan areas. For example, in early February, the median home value in Boise, Idaho — a community of about 229,000 residents — was $406,579, according to Zillow.

Sound expensive? Well, compare that to San Francisco. Zillow says Frisco’s median home value in early February was $1,402,470.

3. Your good health may not last

Nobody lives forever. If you don’t get started on your post-retirement goals in a timely manner, you may never reach them.

“As grim as it sounds, if your health is on the decline, then it may make sense to take an early retirement in order to maximize the net payout of your lifetime,” says attorney Jacob Dayan, CEO of Chicago-based tax services company Community Tax.

Consider, too, that you may experience health problems as you age. If your retirement goals require being in good physical shape so that you can hike the Inca Trail in Peru or bicycle through Ireland, it makes sense to retire sooner.

4. You want to start a new career

Retiring allows you to pursue your true passions. Some retirees use their savings and pension benefits to finance the start of another career.

You can’t claim Social Security retirement benefits until age 62, but if you’ve invested in a retirement plan or qualify for a pension, you may be able to use part of those funds to launch a new career.

Dayan advises careful planning and consideration before making a change. If retiring early and starting a new career requires a substantial financial investment, consider all the risks, including tapping your retirement funds. Make sure the switch won’t put you in financial distress.

5. You can afford to do it

Money doesn’t buy happiness, but, with careful planning, an adequate retirement account may allow you to quit your job. If you no longer feel fulfilled at work and can afford it, it may be time to make the transition. A few things to consider:

  • When you’re starting out in your career, it’s easy to become obsessed with getting ahead. At some point, though, you reach your goal. You deserve a reward for your hard work.
  • If you have loved ones who need your help, and you can afford to stop working, retiring frees you to help them with their day-to-day activities.
  • Retirement offers you time to grow, cultivate new interests, pursue hobbies and spend time with loved ones. It frees you to do the things that matter most.

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

Source: moneytalksnews.com

Understanding Funds Availability Rules

When you deposit money into your bank account, those funds are not always immediately available for use. Your bank or credit union may place a hold on the deposit, and you may notice that your “available” balance is lower than the total balance of your account.

Each bank has its own policy about how long deposits take to become available. There are also federal regulations about how long banks can hold on to funds before making them available to their customers.

It can be a good idea to understand your bank’s policies on holding deposits in order to make sure you don’t accidentally overdraw your account.

Below are some key things you may want to keep in mind to make sure you have access to cash when you need it.

Why Do Banks Put a Hold on Deposits?

Banks hold deposits to protect themselves, as well as their customers, from losing money. If a check you deposit bounces or some other complication arises, the bank will have an opportunity to fix the problem before you have the opportunity to spend the funds.

While a delay in being able to access your own money may seem like a nuisance, holds can actually help protect you from fraud and fees.

If your bank allows you to spend funds from a check that later bounces, you would have to repay the bank the amount that they gave you, and likely also get hit with a hefty overdraft fee. This is the case regardless of who is at fault.

How Long Can a Bank Hold a Deposit?

The amount of time it takes for funds to become available can depend on a number of factors, including how long you’ve held your account, your financial history, the type of deposit (e.g., cash, check, direct deposit), and the amount of the deposit.

Generally, a bank or credit union has until at least the next business day (a business day is a weekday that is not a holiday) to make most deposits available.

Electronic deposits are typically available on the same day. So, one way to make sure your paycheck is available to you quickly is to sign up for direct deposit.

The longest a bank can hold funds is usually five business days for money deposited at an ATM of a different bank.
While each bank or credit union has its own rules as to when it will let you access the money you deposit, federal law establishes the maximum length of time a bank or credit union can make you wait.

Recommended: How Long Does a Direct Deposit Take?

Below are the rules set by the Federal Reserve .

• Direct Deposit: Day of Deposit

• Wire Transfer: Next Business Day

• First $200 of any non-”next-day” check deposited: Next Business Day

• Cash*: Next Business Day

• U.S. Treasury Check: Next Business Day

• U.S. Postal Service Money Order*: Next Business Day

• State or Local Government Check*: Next Business Day

• Casher’s, Certified, or Teller’s Check*: Next Business Day

• Checks and Money Orders Drawn on Another Account at the Same Financial Institution: Next Business Day

• Federal Reserve Bank and Federal Home Loan Bank Checks*: Next Business Day

• Any Other Checks or Non-U.S. Postal Service Money Orders: Second Business Day After the Day of Deposit

• Deposits of Items Noted by “*” at an ATM Owned by the Customer’s Financial Institutions: Second Business Day After the Day of Deposit

• Deposits Made at an ATM Not Owned by the Customer’s Financial Institution: Fifth Business Day After the Day of Deposit

* Deposited in person

You may want to keep in mind that the hold times listed above are the maximum allowed. It’s possible that your funds will be available sooner.

You can typically find specifics about your bank’s funds availability policy in the account agreement you received when you opened your account, or you can ask the bank for a copy of their holding policies.

Understanding Cut-Off Times

When you deposit a check, you may think you did it “today.” However, you may have missed the cut-off for starting the deposit process on that calendar day.

If you make a deposit after the cut-off time, your financial institution can treat your deposit as if it was made on the next business day. If the deposit was made late in the day on a Friday, it could actually take three or more days for the money to show up in your account.

By law, a bank or credit union’s cut-off time for receiving deposits can be no earlier than 2:00 p.m. at physical locations and no earlier than noon at an ATM or elsewhere. Sometimes banks have later deposit times for mobile deposits (made via the bank’s phone app), such as 5 pm.

Deposits That May Take Longer to Become Available

There are certain circumstances under which banks are allowed to hold deposited funds for longer than the times listed above.

When these exceptions apply, there isn’t always a clearly defined limit to the amount of time the bank can hold funds. The bank can generally hold funds for a “reasonable” amount of time.

Exceptions to standard holding times include:

Large Deposits

If a customer deposits more than $5,000, the bank will typically need to make the first $5,000 of the funds available within one business day, but they are allowed to put a longer hold on the remaining amount.

Redeposited Checks

If a check bounces and then is redeposited, banks may hold the funds for longer than one business day. (You may want to be cautious about accepting future checks from a person or business that has already bounced a check.)

Accounts That Have Been Repeatedly Overdrawn

If a customer has a history of overdrawing their account, the bank may hold funds for more time before making them available for use.

Repeatedly overdrawn means that the account has had a negative balance on at least six business days within the past six months, or the account was $5,000 overdrawn more than twice within the past six months.

Reasonable Doubt

If a customer deposits a check that seems suspicious, the bank may hold funds for a longer period of time. A check may seem suspicious if it’s postdated or it’s more than 60 days old.

New Bank Accounts

If your account is less than 30 days old, you may experience hold times of up to nine days. Official checks and electronic payments, however, may be partially available the next day.

Emergency Conditions

If there is a communications outage, a natural disaster, or another circumstance that impedes normal bank functions, banks can hold funds until they are able to provide the funds.

The Takeaway

When you deposit a check, you naturally expect the money to show up in your bank account. But there may be a delay between the time you deposit money and the time that those funds are actually available for you to spend.

Banks generally make funds available on the business day after you make a deposit, but there are exceptions.

Direct deposits are typically available sooner, and some checks, such as those larger than $5,000 or older than 60 days, can take longer than a day to clear. If your account is brand new, it may take up to nine days for a deposited check to become available.

Knowing your financial institution’s policies about holding times can help ensure that you’re able to pay your bills on time, have access to cash when you need it, and don’t get hit with overdraft fees.

Looking for Something Different?

If you’re looking for an easy way to access and manage your money, you may want to consider signing up for SoFi Money®.

SoFi Money is a mobile-first cash management account that allows you to earn competitive interest, spend, and save–all in one place. And, it’s simple to add your SoFI Money account as an option for your direct deposit.

Sign up for SoFi Money, then set up direct deposit into your new cash management account.

Photo credit: iStock/solidcolours


SoFi Money®
SoFi Money is a cash management account, which is a brokerage product, offered by SoFi Securities LLC, member FINRA / SIPC .
Neither SoFi nor its affiliates is a bank. SoFi Money Debit Card issued by The Bancorp Bank.
SoFi has partnered with Allpoint to provide consumers with ATM access at any of the 55,000+ ATMs within the Allpoint network. Consumers will not be charged a fee when using an in-network ATM, however, third party fees incurred when using out-of-network ATMs are not subject to reimbursement. SoFi’s ATM policies are subject to change at our discretion at any time.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
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Source: sofi.com

Does homeowners insurance cover water damage? It Depends

This is one of the first questions homeowners ask — or should ask — when they are shopping for insurance for their home:

“Does homeowners insurance cover water damage?”

The answer they are given is “it depends,” and such is the way with understanding what homeowners insurance covers and what it does not. Read this story to learn what insurance protects in general.

You pay for homeowners insurance because you must in order to get a mortgage, and you hope you never need to use it. But a variety of ills — natural or human made — can put you in a position to make a claim of loss or damage to property. You hope the coverage you have paid for all of these years will extend to the situation you are dealing with, but you just never know.

Again, It depends.

Below, you can find what to do when you need to contact your insurance company because you have suffered property loss or your home is damaged. Then you will find out what to do when your claim is denied.

But, first, let’s look at all the ways your home can be damaged by water, and the chances that your homeowners insurance will cover your loss in that event.

Does Homeowners Insurance Cover Water Damage?

The answer to the question “does homeowners insurance cover water damage?” is multileveled, just as the water damage might be.

In general, water damage caused by accident or mechanical failure of an appliance (washing machine, dishwasher, water heater, etc.) is going to be covered by standard policies. The same is true of a toilet that suffers a sudden leak.

But, if the water damage is a result of poor maintenance, such as broken pipes, mold or rotting pipes or water lines, the claim is likely to be denied.

Coverage for water damage is separated into dwelling damage and personal property damage, What is not covered is replacement of the appliance or machinery that caused the water damage. If your dishwasher develops a sudden leak which causes damage to your home, the structural damage and personal property damage likely will be covered but the cost of replacing the dishwasher will not.

If your home suffers water damage from a backed-up sewer or drain, traditional homeowners insurance doesn’t cover such occurrences. Many companies offer water backup coverage, however.

Flood damage is rarely covered by a standard homeowners insurance policy. Flood insurance policies are available thanks to the National Flood Insurance Program (NFIP) , but it is pricey.

According to the National Flood Insurance Program, the average cost of flood insurance for 2021 is $958 annually. That comes out to about $80 a month. 

If you wonder “does homeowners insurance cover water damage?” check with your agent to determine just what is covered and what is not, and whether you need to consider extended water damage coverage due to current climate conditions or the age of your home.

Making a Claim with Insurance Company

If you have not yet been in a position to make a claim against your homeowner’s policy but know someone who has been denied and you worry about your own policy’s virtues, take time to consider your choices in company and coverage.

What follows is a simplified representation of what is involved in making a homeowners insurance claim for water damage, including the possibility of having your claim denied and what to do in that event.

Step One: Your Home or Property Suffers Water Damage

When your home suffers water damage, you need to determine the actual extent of damage, and if you can, how the damage was caused.

Then contact your insurance company to determine if the damage is covered by your policy. This response to this question is not cut and dried, but it is the starting point for recovering some of your losses.

Step Two: Take an Inventory of What Was Damaged

Take photos or video of water-damaged possessions, structure or property (actually, it would be wise to take a video of your pre-disastered home right now, so you can refer to post-disaster).

Attempt to determine the value of individual items that need to be replaced, and find receipts if you have them (which is actually easier these days since most purchases occur with some form of electronic transaction). If the damage is structural, that will create a need for damage assessment and estimates, but that will occur after the insurance company has agreed to pay up.

Step Three:  Meet with the Adjuster

The insurance company will assign you an adjuster, who will eventually come to your home and assess the damage.

Do not assume this person is out to prevent you from covering your damages, but remember that the adjuster is protecting the interests of the insurance company to prevent fraudulent claims.

The adjuster will require a list of lost or damaged items with an estimated value of those items, and will assess structural or property damage that will require estimates to determine repair costs. Putting together a list of the valuable contents of your home is another thing to do before disaster strikes.

How much homeowners insurance do you need? Our insurance checklist will guide you to make the right decision. 

Step Four: Get the Verdict

The adjuster will eventually call you with a detailed list of what the company is going to cover, the amount it will give you for your lost or damaged items, and what structural damage the company will pay to be repaired. You may or may not like the dollar figures the adjuster offers.

You may also be surprised to hear that the insurance company can deny your claim, in part or in whole. This is where the insurance company is covering its assets: it will present in written form why it is denying your coverage claim. This letter should provide a complete and specific explanation why your policy does not cover the losses you claim.

If your policy explicitly states certain items or losses are exempt from your coverage, that is the end of the conversation. However, if you believe your policy should cover the damage you suffered, speak to the agent who sold you the policy, if possible, or ask to have an in-person conversation with the adjuster to discuss the situation.

Proving that your policy should cover your losses will not be easy. However, if you have a different interpretation of the language in your policy than what the adjuster suggests, or you have notes from your original conversation with your agent at the time you bought the policy, you can go on to the next step.

What’s God Got to Do With It?

Most standard homeowners insurance policies include an Act of God provision. From an insurance standpoint, an Act of God is damage that occurs as a result of natural causes with no human component, something that could not have been prevented by proper care or maintenance.

Earthquakes or floods are often considered an Act of God. Wildfires may also be considered an Act of God if started by lightning rather than humans (campfire gone bad, tossed cigarette and more).

Homeowner’s insurance policies spell out which Acts of God are covered. For instance, floods are Acts of God, although homeowners in flood plains or near coasts or lakefronts can purchase flood insurance at an additional cost.

Often, standard homeowners insurance policies do cover damage from high winds from natural events like hurricanes and tornadoes. If this is a possible factor in your claim, determine what your policy covers before going onto the next extensive and expensive step.

The increased occurrence of wildfires in the Pacific Northwest has made fire protection a must for homeowners in that area. But different companies provide different levels of coverage and full coverage can be expensive.

How to Fight a Denied Claim

You feel your insurance company is not fulfilling its legal promise to cover the cost of water damage to your home. You have documentation of your losses, a detailed description of the event that caused your damage (malfunctioning appliances or plumbing mishap), and you are in a position where it will behoove you financially to argue your case.

Pro Tip

In most cases, there is a limited time frame in which a denied insurance claim can be appealed, and the time frame begins from the moment you are notified of the denied claim.

Your homeowner’s insurance policy includes language stating how to appeal a denied claim. Getting involved in a battle with your insurance company may seem like a lost cause, but often, insurance companies can be convinced to adjust their decision to your benefit.

You might want to consider improving your chances by consulting a property insurance claims professional. These are licensed public insurance adjusters who can assess your claim from an objective viewpoint and will negotiate with our insurance company for you. Deciding on whether to hire a professional outside adjuster will be based on the cost of his or her service versus the amount of money you hope to recover.

The last step to recover funds would be to sue your insurance carrier, which would require hiring an attorney who specializes in property insurance claims. Get references and verifiable information on previous claims regarding water damage that were settled to the homeowner’s benefit.

Here’s hoping this helps and that you never need it.

Kent McDill is a veteran journalist who has specialized in personal finance topics since 2013. He is a contributor to The Penny Hoarder.

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Source: thepennyhoarder.com

12 Ways Retirees Can Earn Passive Income

A senior black man uses a smartphone
wavebreakmedia / Shutterstock.com

These days, “retired” doesn’t always mean “not working.”

According to a study of U.S. retirees from the nonprofit Transamerica Center for Retirement Studies (TCRS), “nine percent … are currently working for pay, including five percent who are employed part-time, two percent who are employed full-time, and two percent who are self-employed.”

More than half — 56% — of those surveyed said their top reason to keep working was “wanting the income.” The good news: You might be able to make some extra dollars via passive income — money that comes in without you doing much work, or any work at all.

Passive income is often synonymous with a large upfront investment, such as buying rental properties or dividend-producing stocks. But the following passive-income strategies can bring in extra bucks without investing a bunch of money or time.

1. Rent out a room in your home

Got an empty nest? Someone may be willing to pay to roost there.

You can advertise your spare space on your own or list it on a vacation rental website such as:

Yes, it takes some work: You might have to keep the room tidy and wash a load of sheets and towels once the guests depart. But in some parts of the country, you can earn enough money in just a few days to cover a mortgage payment, as we detail in “Do This a Few Days Each Month and Watch Your Mortgage Disappear.”

If you’re the gregarious type, you can have fun talking up your town or even showing visitors around. If not, advertise it as a “Here’s your key, we won’t bother you” arrangement. Some people simply want an inexpensive place to sleep and don’t care about sitting around chatting with the host.

2. Rent out your vehicle or gear

Your spare bedroom is just one of many things you could rent to others to bring in extra money.

Use your imagination. Maybe you have a ladder, stroller, surfboard, bicycle, boat, camera equipment or a great selection of power tools.

Peer-to-peer rental sites like the following will help you find folks who occasionally need such things but don’t want to own them:

Whatever you’re renting, keep in mind that ordinary insurance might not cover the commercial use of your property. An insurance rider may cover some items, but you may need a separate policy, so consult your insurance agent.

3. Become a peer-to-peer lender

What is peer-to-peer lending? In short, P2P lending sites such as Prosper accept loan applications from borrowers. Investors like you can put some of your money toward loans to those borrowers. When loans get paid back, so do you — with interest.

Overall, P2P investments “can provide solid returns that are really hard to beat,” according to Clark.com, the website of financial guru Clark Howard.

As with any loan, however, there’s the possibility of default. You may not earn anything or may even lose money.

Sound too complicated? Maybe this simpler form of P2P is for you: Worthy sells 36-month bonds for $10 each. The money that comes in is loaned to U.S. businesses, with lenders who have purchased these bonds getting a 5% annual rate of interest on their investment.

To learn more about Worthy bonds, check out “How to Earn 80 Times More on Your Savings.”

4. Get rewards for credit card spending

If you’re going to shop with plastic, make sure you’re rewarded.

The form that the reward takes is up to you. Some people covet airline miles. Others take their rewards as cash or a credit against their monthly statement.

The number of rewards credit cards — and their pros and cons — can be a little dizzying. For an easy way to compare your options, stop by our Solutions Center and check out travel rewards cards or cash-back cards in the Money Talks News credit card search tool.

5. Use cash-back apps

An app called Ibotta lets you earn cash rebates on purchases from retailers, restaurants or movie theaters.

Or you can do your online shopping through cash-back portals like:

These websites enable you to earn cash back on purchases from thousands of online retailers. To learn more about them, check out “3 Websites That Pay You for Shopping.”

6. Sell your photos

Smartphones have made decent photography possible for just about anyone. The next time you capture a killer sunset or an adorable kid-and-dog situation, don’t keep the image to yourself. Apps like Foap — which is available for Android and Apple devices — will help you sell it.

You can do even better if you have a good digital SLR camera, a tripod and other equipment. Stock photo companies like Shutterstock and iStockphoto, which favor high-definition, high-quality images, are venues for selling photos on just about any subject you can find.

7. Write an e-book

It’s possible to bring in cash without a high-powered book contract, thanks to self-publishing platforms.

Amazon’s Kindle Direct Publishing, for example, allows you to write, upload and sell your words fairly easily. My two personal finance books are for sale on Kindle, and they provide a steady stream of passive income.

I also sell PDFs of the books through my personal website. I use a payment platform called E-junkie to handle payments and deliver the book downloads — and this brings me more money per book than Amazon does, even when I offer readers a discount.

If you’re fond of a particular fiction genre, write the kind of stuff you’d like to read. Nonfiction sells, too: cookbooks, travel guides, history, memoirs and how-tos are a few examples. Or maybe you have a specific skill to teach — job-hunting or food preservation or raising chinchillas.

Pro tip: Fiverr.com is a good marketplace through which to find freelancers to hire for help with formatting, design and cover art.

8. Create an online course

If you’ve got useful knowledge, why not monetize it? Sites like Teachable and Thinkific will help you build a course that could change someone’s life, either professionally or personally.

Note that online courses are not limited to computer-based topics. A quick search turns up classes on:

  • Cake-making
  • Watercolors
  • Digital scrapbooking
  • Drone cinematography
  • Free-diving
  • Blacksmithing
  • Yoga
  • Parenting
  • Novel writing
  • Job hunting
  • Building a pet-care business

And that’s just for starters. Like writing an e-book, creating a course will take some work. But again: Once it’s up, the work is done.

9. Join rewards programs

Rewards sites like Swagbucks reward you with points for activities such as searching the internet, watching short videos and taking surveys. You can cash in your points for gift cards or PayPal cash.

Maybe you didn’t retire to spend hours taking surveys. But if you’re going to search the internet anyway, why not use Swagbucks’ search engine and earn some points?

To learn more about Swagbucks, check out “6 Ways to Score Free Gift Cards and Cash in 1 Place.”

10. Wrap your car with advertising

Turn your vehicle into a rolling billboard with companies like Carvertise. They’ll pay you for the privilege of putting removable advertising decals for a business on your automobile.

Writer Kat Tretina describes the process at Student Loan Hero. You can expect to earn $100 to $400 a month, depending on how much and where you drive, she says. Requirements include having a good driving record and a vehicle that has its factory paint job.

Pro tip: Car-advertising scams make the rounds regularly. Tretina offers these tips to avoid being victimized:

  • Legitimate companies don’t charge an application fee, and they’ll have a customer service phone line that lets you talk with a real person.
  • The car-wrapping cost should be covered by the company.
  • Take a hard pass on any company that doesn’t ask questions about your driving record, auto insurance, driving routes and type of vehicle.

11. Create an app

Maybe yours is one of those minds that says, “There should be an easier way to do (whatever) — and I think I know what it is!” If so, creating an app could bring in extra income.

It could also bring in zero dollars. But nothing ventured, nothing gained, right?

For example, personal finance writer Jackie Beck — who cleared $147,000 of debt — used her expertise to create an app called “Pay Off Debt.”

Not a coder? App-builder services exist. The WikiHow.com article “How to Create a Mobile App” tells how to get started. It’s a time-consuming process. But that’s one of the beauties of retirement: You set your own hours.

12. Become a package ‘receiver’

OK, this idea is unproven — so far. But it’s a solution whose time has come. The boom in online shopping has been a boon for thieves who find it easy to swipe packages left outside front doors before the intended recipients get home from work.

You might be able to do your part to thwart those lowdown thieves by marketing yourself as a “professional package receiver.”

Try this: Put the word out — through friends, social media, places of worship — that you are available to accept deliveries. If a package is for someone in your neighborhood, you could watch the shipping company’s tracking info and be at the home to take the package in. Or you could specify that packages be shipped to Original Recipient, c/o Professional Package Receiver — that’s you.

Before asking a fee of, for example, $1 per package, ask the person who wants to hire you what it’s worth to them. You might be surprised by a response like, “I’ll give you $5.” Decide, too, whether you’ll be charging per package or per order, and whether you’ll set a weight limit, such as no packages over 30 pounds.

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

Source: moneytalksnews.com

10 Ways to Save Money on School Uniforms for Kids

According to the National Center for Education Statistics, 1 in 5 public schools required students to wear uniforms as of the 2017-18 school year. These can be anything from identical outfits marked with the school’s name or logo to a basic color scheme, such as plain white shirts and tan pants.

According to 2011 research from the University of Nevada, Reno College of Education, a school uniform policy can have many benefits for students. It can make it easier to get ready for school, boost self-esteem, reduce bullying, and improve classroom discipline. But it has one big downside for parents: the cost. According to CostHelper, a school wardrobe of four or five uniforms can cost anywhere from $100 to $2,000.

One reason uniforms often cost more than regular clothes is that parents have less choice about where to buy them. If you can only get your kids’ school wardrobes from the official school store, you must pay whatever that store charges. However, you can get around this problem with the right shopping strategies. The first tip to try: shopping secondhand.

Ways to Save With Secondhand School Uniforms

Clothes are one thing it nearly always pays to buy secondhand if you can. With school uniforms, that’s doubly true.

Since young children grow so fast, their outgrown uniforms can still have lots of life left in them. Naturally, these previously worn uniforms don’t look brand-new, but neither do most school clothes after a few weeks of wear. Secondhand school uniforms cost much less than new ones, and in some cases, they’re free.

1. Try Uniform Swaps

If you have two children attending the same school, the younger kid can wear the older one’s hand-me-downs. But if you have only one child or your kids go to different schools, you can end up with clothes in good condition and no one to hand them down to.

A uniform swap is a way to expand your hand-me-down family. By pooling resources with other parents, you can pass on your child’s outgrown uniforms to younger students at your school and receive uniforms from older students in turn.

Some schools hold official uniform exchanges. For example, at St. Catharine School in Ohio, you can trade in gently used school uniforms for larger sizes or pick up other people’s trade-ins at significantly reduced prices. Other schools, like St. Stephen’s Academy in Oregon, give parents points for their trade-ins, which they can use for purchases or donate.

If your child’s school doesn’t have an official uniform exchange, hold a clothing swap party of your own. Invite other parents over, lay out all your outgrown uniform items, and see who can use them.

If you don’t have the space to meet and exchange clothes in person, start a social media group where parents can post photos and descriptions of their kids’ outgrown clothes. When you find someone who has the size your child needs or needs the size you have to give, you can contact each other to arrange a pickup.

2. Shop at Thrift Stores

If you live in or near a large city with a large student population, there’s a good chance you can find outgrown school uniforms at local thrift stores. Check the stores closest to your child’s school to maximize your chances of finding them.

Even in smaller cities and towns, thrift stores are an excellent place to look for basic pieces that are often part of a school uniform. Dress shirts, solid-color polo shirts, and chino pants are likely to show up on their racks. You can’t count on finding the pieces you need in your child’s size, but if you do, they’ll be significantly cheaper than new clothes.

To find thrift stores in your area, do an Internet search on “thrift stores” or “thrift shops” with your town’s name or zip code. Also, check the websites of the largest store chains — such as Goodwill, Salvation Army, and Value Village — to find their nearest locations.

3. Find Sellers Online

If you can’t find suitable secondhand clothes for your child’s uniform at local stores, try looking online. Start consulting your local Craigslist and Facebook Marketplace groups in early July, and look for new listings every other day or so. That gives you roughly two months to find all the pieces you need to build a complete school wardrobe for your child. Just be sure to contact sellers quickly when you find something you need so someone doesn’t beat you to it.

Another reliable source for secondhand uniforms online is eBay. You can create saved searches for each specific garment your child needs, such as “navy shorts size 8,” and receive daily emails of all new listings for your saved search. You can pick up pieces one at a time or — if you’re lucky — find a lot of uniform clothing all in the same size.


Ways to Save on New School Uniforms

The biggest downside of secondhand shopping is that you can’t be sure of finding what you need. If the start of the school year is approaching and you still don’t have a complete school wardrobe for your child, don’t panic. There are ways to buy new uniform-appropriate clothes and still keep costs down.

4. Buy the Minimum

For starters, don’t buy more of any component than you really need. Your child may need a clean shirt for school every day, but kids can usually get away with wearing the same skirt, pants, or sweater several days in a row. Jackets and ties can go even longer between cleanings.

How many pieces your child needs depends on how often you intend to do laundry. Mothers discussing their kids’ school wardrobes on Mumsnet generally say they include:

  • Five to 10 shirts
  • Two to five sweaters
  • Two to five skirts or pairs of pants or shorts

On top of that, you can add one or two school blazers and one or two dresses or jumpers if your uniform includes these pieces. And your child also needs at least one pair of school shoes and enough socks and underwear to last the week.

If you shop smart, you can put together this minimalist kids’ wardrobe for less than the $240 average parents reported spending on back-to-school clothes in a 2019 National Retail Federation survey. CostHelper says it’s possible to find pants and skirts for as little as $5 each, tops for as little as $3, and shoes starting at $15. That’s less than $100 for the whole wardrobe.

5. Visit Cheaper Stores

If your school’s uniform consists of basics like solid-color tops and pants, there’s no need to buy them at the official school store. Many major retail chains sell uniform-appropriate clothes for kids at quite reasonable prices. In fact, several retailers offer lines of kids’ clothes designed explicitly for this purpose, such as:

6. Shop Online

If stores in your area don’t carry the school uniform pieces you need at prices you like, try shopping online. Some online retailers specialize in school uniforms, and others have sections devoted to them. Good places to shop online include:

  • Amazon. The e-tail giant has an entire section called The School Uniform Shop. It provides links to uniform-appropriate garments from many popular brands, including Nautica, Izod, and Dockers. Alternatively, you can search for “school uniforms” to find apparel for girls and boys. Check out these Amazon savings tips for more ways to save.
  • French Toast. Online retailer French Toast deals in school uniforms for all ages, which you can search by school or gender. The site also offers two- and three-packs of identical shirts or pants for a discounted price per piece.
  • Lands’ End. The school uniform shop at Lands’ End offers sturdy clothing in all sizes, from toddler to adult. Clothes are covered by the brand’s unconditional lifetime guarantee. There’s even a selection of adaptive garments for kids with disabilities. This apparel combines easy-to-use magnetic closures with decorative buttons for a uniform look.
  • Lee Uniforms. For teens and young adults, the Lee Uniforms store on Amazon offers school- and work-friendly pieces. The selection is limited, but the prices are excellent.
  • SchoolUniforms.com. As its name implies, SchoolUniforms.com specializes in uniform basics, from blazers to plaid pleated skirts. Garments come in a range of sizes to fit children ages 3 and up, including plus sizes.

When shopping for uniforms online, you can save still more by using a mobile coupon app like Rakuten or Ibotta. If you prefer to shop from a computer, install a money-saving browser extension like Capital One Shopping to help you find great prices and available coupon codes.

Capital One Shopping compensates us when you get the browser extension using the links provided.

7. Wait for Sales

If your school has an official uniform store, call that store and see when it plans to offer discounts or promotions. In many cases, uniforms go on sale in October, after most parents have already bought their kids’ clothes for the year. You can save money on school uniforms by buying just enough pieces to get through September and waiting until October to stock up.

If the school uniform is a generic outfit available from many stores, keep an eye out for sales at all the stores in your area. Consider signing up for emails from your favorite local stores to let you know when uniform clothing goes on sale. Sometimes, these emails also provide coupons, which can boost your savings still more.

Timing your purchases can help at department stores too. Clothes often go on sale at the end of the season — for example, summer clothes in September or winter coats in March. If you plan ahead, you can save by buying school uniforms for next year during these end-of-season sales.

If you’re unsure when and where school uniforms are most likely to go on sale in your area, create a Google Alert for the term “school uniform sale” with your location or zip code. Whenever a new sale pops up, you’ll receive an email about it. You can also use the term “school uniform clearance” to learn about end-of-season clearance sales.

8. Check Out Clearance

Even when a department store isn’t having a sale, there’s usually a clearance rack you can check for marked-down clothing. Since school uniforms tend to be plain clothes without a lot of eye appeal, there are often at least a few pieces that don’t sell and end up on the clearance rack.

For example, the frugal-living bloggers at Life Your Way and Joyfully Thriving both report finding uniform pieces for less than $5 on the clearance racks at stores like Gap and Macy’s.

9. Buy Bigger Sizes

If your child is still growing, there’s a good chance the uniforms you buy now won’t fit by the end of the year. However, you can make them last as long as possible by sizing up.

Choosing clothes with an extra inch to spare in the legs and sleeves gives your kid room to grow into them. Some uniform pants and skirts come with adjustable waistbands, so they’ll accommodate your child’s growth in width as well as height.

And if you find a great price on a particular piece your child needs, you can buy next year’s sizes now. Assuming they plan to attend the same school for the foreseeable future, you know they’ll need the same uniform next year, so buying multiple sizes at once lets you get them all at the best possible price.

10. Buy to Last

If your child has stopped growing but still has a few more years of school to go, you can save money by choosing quality clothing that will last. These well-made pieces may cost more upfront than cheaper brands, but they pay off in the long run. A $50 blazer that wears out after one year costs $50 per year, but a $100 blazer that lasts for four years costs only $25 per year.

For example, clothes from Lands’ End come with a lifetime guarantee. If they don’t last your child until graduation (or they outgrow them), you can return them for a full refund. Clothing from Dickies, available at Walmart, is also guaranteed for its “expected life,” though they don’t define the term. Clothes from Target’s Cat & Jack line come with a one-year guarantee.

Another way to make school uniforms last as long as possible is to choose the darkest colors allowed. On light-colored clothes, minor spots or stains show up more vividly, making them unfit for school wear. Darker-colored clothing, such as maroon, navy, or forest green, hides these minor flaws.


Final Word

Saving on school uniforms doesn’t end when you’ve made your purchases for the year. If your kid’s uniforms become unwearable due to rips, stains, or lost buttons, you’ll have to replace them in a hurry — possibly at full price. To avoid this problem, handle school uniforms with care to make them last as long as possible.

Always follow the washing instructions and line dry or dry flat when possible to avoid wear and tear from the dryer. Treat stains promptly, repair rips, and replace buttons.

If your sewing skills are up to it, you can even get another year or two of life out of garments by letting down the cuffs or adjusting the waistband to fit your child’s larger size. Following all these steps reduces waste, so you can also pat yourself on the back for being green.

One final tip: Label all your kids’ school clothing with their names. When all the students in a school wear the same outfit, it’s easy for them to grab someone else’s sweater or jacket by mistake. Sewing in a name tag or writing on the care tag with a permanent marker increases the chances misplaced clothes will find their way home again.

Source: moneycrashers.com

58-Year-Old Landlord Says Goodbye to Tenants

Meet Frank and Linda, (not their real names). Frank and Linda have been married for 30 years and had begun having conversations around making plans for Frank to leave Corporate America before Frank turned 60. Linda would wind up her teaching career around the same time Frank would retire, and for the first time in their lives they realized that they would soon have the time they always wanted together.

Frank wanted to spend a month in Europe like he had always talked about, and Linda just wanted to go to the beach; sleep late, read books, boil shrimp and enjoy the different wines from her wine club recommendations. “Let’s do Europe in the spring when the weather is cooler,” Frank suggested, “and then we can do the entire summer at the beach when we’re ready for our warm, sunny, lazy days on the beach.” Frank’s idea sounded perfect to both.

And then it hit them: They’re not going anywhere.

Instantly Frank and Linda re-centered around the reality of their real estate portfolio. During their careers, Frank and Linda has acquired three rental homes — a storage facility, a four-plex apartment and two vacant lots in the subdivision where they lived. Frank had watched his father speculate and gamble in the stock market and lose big more than once. Frank was currently helping his dad with medical costs and carried a bit of resentment for his dad’s fast-and-loose ways with money when his dad was younger. At 25, Frank had decided he would build his own personal wealth in real estate, something he reasoned would always be there for him; and it had. Frank and Linda’s real estate portfolio, excluding their primary residence, was now valued at over $2.6 million and represented the lion’s share of the wealth they would rely on for their retirement income to supplement Frank’s Social Security and Linda’s pension as a teacher.

“How about we just sell it all,” Linda suggested, “After all, the market is so good right now.” This seemed like possibly a good idea to Frank. “Then we will have the time and the money to do what we want,” Linda reasoned. Frank said that sounded good but wanted to make sure he knew what the taxes would be, because he knew there could be a fair amount to pay were they to sell.

CPA Delivers Good News and Really Bad News

Frank and Linda had a long-standing relationship with a local CPA who had helped with all the accounting, bookkeeping and filings their real estate holdings had required. Frank offered to reach out to the CPA the next morning and run some numbers on what the tax bill might look like were they to sell all their investment real estate holdings.

Two weeks later Frank went to see his longtime CPA and friend, Lanny. Lanny pulled up Frank and Linda’s tax return from the previous year and started running calculations on all the real estate that the couple have been depreciating. After what seemed a solid half hour of the CPA banging on his keyboard, he looked up, squinted and leaned across his desk. “Well, I have good news, and I have not-so-good news. The good news is, you and Linda have made a lot of money on this real estate. The bad news is you’re going to get killed on capital gains taxes and depreciation recapture.”

Lanny went on to explain that since the total gains were large sums, those gains would be taxed at the current 20% capital gains rate, plus the 3.8% Net Investment Income Tax. He went on to say that depreciation recapture was taxed even higher, at 25%.

“So how bad is it?” Frank asked.

“Just over $500K,” Lanny murmured.

“You mean that Linda and I have to write a check to the IRS for more than $500K if we sell our real estate?” Frank was almost shaking.

In his head he was thinking the number might be closer to $200K, which he thought he might be able to tolerate. The very idea of writing a check to the IRS for more than half a million dollars left Frank angry, astonished and perplexed all at the same time.

How about a 1031 Exchange?

“There’s always a 1031 Exchange,” Lanny offered as what seemed to Frank a flimsy condolence. Frank knew of the 1031 Exchange, but that would just mean selling his real estate and buying other real estate that he and Linda would have to keep up with. Sure, they could sidestep $500K of tax, but he and Linda would have all the same headaches of property ownership, just with different addresses. Tenants are tenants, Frank said to himself, and all that goes with them. No, a 1031 Exchange was not going to solve their problem. Selling and buying again might look good on a spreadsheet, but it was not going to give him and Linda the freedom they wanted.

Several weeks went by for Frank and Linda without mention of their real estate assets. Then, one evening after dinner, Frank and Linda were sitting in their living room where Frank was watching baseball and Linda had her laptop out looking at travel blogs she followed online. Frank’s team was losing badly enough where he was considering turning it off. At that precise moment Linda said, “Frank, what’s a DST?”

 “I don’t know, some kind of pesticide,” Frank quipped.

 “Frank, it says here in this article that I’m reading that a DST is a passive form of real estate ownership that qualifies for a 1031 Exchange. The article says that many people today are opting to sell their real estate using a 1031 Exchange to move their equity into Class A apartment buildings, self-storage portfolios, medical buildings, industrial warehouses and even things like Amazon distribution centers, Walmart stores and Walgreens buildings. Apparently, these investments offer solid monthly income to investors and attractive opportunities for long-term growth,” Linda continued. “Frank, this could be it. This could be what we are looking for.”

Frank and Linda’s dilemma is not uncommon. Perhaps it was an aging population that was considered when in 2002 the state of Delaware passed the Delaware Statutory Trust Act. Revenue Ruling 2004-86 soon followed and allowed for DSTs to qualify as “Replacement Property” for the tried-and-true 1031 Exchange (part of our tax code since the 1920s). Many DSTs offered to real estate investors are capitalized with $100 million or more, and smaller investors can now access these offerings in smaller fractionalized amounts as low as $100,000. Properties include medical buildings, Class A multi-family apartment buildings, hotels, senior living, student housing, storage portfolios and industrial warehouse buildings. Nationally known tenants are typically companies like Walgreens, Hilton and Amazon, among others. Often, investors might feel better with a large and stable company like Amazon guaranteeing their monthly income, rather than the tenants who last skipped out on rent, leaving them high and dry.

Some Caveats to Consider

All real estate investing, including DSTs comes with risk, and investors should do their homework, perform their own due diligence, and read the Private Placement Memorandum, (PPM) before investing any capital.  DST offerings are typically illiquid and would not be considered suitable for a large portion of someone’s wealth when liquidity is needed. Because DSTs are regulated and are “securities,” they must be purchased from a Registered Investment Adviser and/or a Broker Dealer Representative who holds a proper securities license, Series 7 or Series 65. 

Many times, we are asked who can invest in a DST. Accredited Individuals and certain entities qualify. An individual must have a net worth in excess of $1 million, excluding his or her home, OR an income over $200K per year for the last two years. If married, the combined income required is $300K. The income is required to be “reasonably expected” going forward.

For the right person in the right situation, a DST might be the perfect answer to a common dilemma faced today by many real estate investors across America.

For more information, please visit www.Providentwealthllc.com or www.Provident1031.com.

Chief Investment Strategist, Provident Wealth Advisors

Daniel Goodwin is the Chief Investment Strategist and founder of Provident Wealth Advisors, Goodwin Financial Group and Provident1031.com, a division of Provident Wealth. Daniel holds a series 65 Securities license as well as a Texas Insurance license. Daniel is an Investment Advisor Representative and a fiduciary for the firms’ clients. Daniel has served families and small-business owners in his community for over 25 years.

Source: kiplinger.com