saving

The 3 Accounts You Might Be Missing Out On

Having all of life’s pieces together, set up, structured properly, knowing your login to everything, remembering when to pay bills, how to shop for a car … It can all be quite overwhelming. There are a few basics that get skipped over, but are vital to having a comprehensive financial portfolio. While simple is usually best, it can also be a bit risky, especially once your total balances exceed the insured limit, if all of your money is held in a simple bank or credit union account. However, for most, that’s precisely where we’ll start:

  1. Set up a checking and savings account. While you might already have at least one of these, having both is important. Having a safe place for your money to flow into is important, for paying bills, getting cash, and having a base for the rest of your accounts in which to pull from. Setting up a credit union savings account is easy and takes only a few minutes, and gives you a separate place from your usual spending money to save for an emergency, vacation or general nest egg. It’s advisable to have 3-12 months of your salary saved in a safe savings account, just in case of a job loss or the need to take a few months off to reconsider your life’s path. It’s immensely secure and stress reducing knowing you have a safety net that can provide you a continued sense of self, regularity and maintained lifestyle should you need it. Depositing money into your accounts is as easy as setting up direct deposit through your employer, or scanning checks on a mobile app, in many cases. Having savings and checking accounts are foundational for most. You can try browsing the internet for free checking accounts since there are banks that offer such perks.
  2. Credit cards. While this may be a very taboo subject and suggestion, depending on which blogs and financial gurus you follow, credit cards can be very beneficial to have when used advantageously. Sure, there are high interest rates on carried balances, but there are also a host of benefits that come with some cards, such as travel insurance, travel benefits, cash back, extended warranty protection on purchases like electronics, and so much more. Using credit cards also gives the benefit of fraud protection, in many cases. As long as the balance is paid in full each month, there’s really no downside when used in an intentional and structured manner.
  3. Insurance. From renters and home insurance to car insurance, life insurance to medical insurance, having insurance can be costly to pay for up front, but is something that is beneficial to have, just in case something goes awry. Shopping around for the best policies and premiums that work best for your budget and needs is well worth your time, as having the wrong coverage is unchangeable and irreversible once needed in a situation. While some types of insurance are required, like automobile insurance and homeowners insurance, others are optional but are extremely beneficial to have to protect yourself, your family, your home, vehicles and possessions on the rare occasion disaster strikes. Take some time to talk to insurance professionals and do your research when signing up for insurance, so you understand fully what you’re getting.

Setting up basic types of accounts to create a strong and stable foundation for your financial health takes a bit of time up front, and is good to have a routine of evaluating annually or more frequently, to ensure everything is still needed and on track for where you are in life, and where you want to go, but it’s always worth it. Financial health is as important as physical health, as both are important for our longevity and happiness in life.

Are Electric Cars Worth It?

As the climate crisis continues to worsen and governments fail to address the issue through top-down policies adequately. It is left to the people make changes to their individual lives to make the necessary reduction in carbon emissions. Hopefully, you can prevent the atmosphere warming to the critical 2-degree threshold.

There are many small things that individual households can do. There are changes to the daily routine and alterations in the types of food eaten. And there are more significant decisions, such as what kind of vehicle to drive.

Often, the smaller changes to our habits are more comfortable to swallow because they don’t incur any meaningful increase in costs. But because purchasing a car is such a big decision financially – it is usually the second most expensive asset we buy after a house – then people can be forgiven for not considering a more expensive alternative to a gas-powered car.

However, as we will explain in this article, for many people, the decision to purchase an electric car will save them money in the long run.

The Cost of Hybrid and Electric Cars

When hybrid cars and electric vehicles first came on to the market, even the most environmentally conscious consumer was not able to stomach the costs. They were prohibitively expensive. Fueled by innovation and technological advancements, not to mention government encouragement, the price for these vehicles has dramatically decreased so that now they are reasonably priced for most consumers to consider them. Their increased affordability is evidenced by the fact that registration for electric cars have more than doubled in 2019 compared to the year before.

Across the globe, most major car manufacturers have added electric car vehicles to their fleet of offerings. These companies understand that they are the future, and as a result, they don’t want to be left behind. The competition from these car companies will help to drive down the cost further and increased vehicle equity. In the United States, you can buy a small electric car for as little as $10,000 (Renault Twizy). For regular-sized vehicles, there is a considerable number of options in the price range of $30-40k.

Government Grants Reduce Cost

When looking at these prices, do not forget that governments also offer credits or grants for purchasing an electric vehicle. In the US, there is a federal electric vehicle tax credit of $7,500. This may not last forever, especially given the current President, so it may be worth taking advantage of these incentive schemes. At the same time, they are on offer to further enhance the cost savings of going electric.

If we focus on the US, let’s create a hypothetical situation where you are looking at a purchase of a brand-new electric car for $22.5k ($30k purchase price less the tax credit). Already, this is comparable to many gas-powered cars, so for many people, the debate as to whether an electric car is worth it will end here. If you are looking at a cheaper gas car, though, then we need to do some calculations that prove the financial benefit of running off electricity rather than gas.

Electricity is Cheaper than Gasoline

The big reason why electric cars are cheaper than gas cars is that electricity is much less expensive to consume than gasoline. On average, American drivers spend around $1,500 a year at the gas station purchasing gas or diesel for their cars. This compares to an average of $500 that drivers of electric vehicles are spending on charging up their vehicles each year.

Financial and Environmental Worth of Electric Cars

Clearly, if you are saving an average of $1,000 every year, then you can quickly make up the difference in the initial price of an electric car.

Ultimately, the question as to whether or not electric cars are worth it can be answered from two angles – the financial and the environmental. From an ecological perspective, they are worth it. The carbon footprint from using an electric car instead of a gas-powered vehicle is far, far lower. By making the switch, you will, without doubt, be helping to protect the planet from global warming.

Fortunately, thanks to colossal progress that has been made in just the last few years, the decision to switch to an electric car is also worth it from the financial perspective. Although the upfront cost of an electric car can be higher, it has been proven that this can be more than offset by the amount of money you will save from charging your car with electricity rather than paying for gas.

So, if you want to save money in the long term and save the planet, hopefully, this article will have helped you to make that decision.

Image source: Open Grid Scheduler.

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How To Start Saving For Retirement

Everyone deserves to have a comfortable retirement after decades of hard work. But to so many Americans, saving for retirement seems complicated, intimidating, and a choice that can be postponed for the future. However, there are so many little choices you can make every month to start saving for retirement–and they aren’t difficult at all!

All you need to know are a few practical basics on how to start saving for retirement. Sometimes you just need a jump start to get you going. Once you begin saving, you will feel more comfortable about the process and adjust how much and how often you allocate funds.

Here are some great ways to start saving for retirement:

  1. Have an Emergency Fund

You might think an emergency fund has nothing to do with saving for retirement. But if you have no emergency fund and you experience a financial emergency, where will you turn for cash? That’s right, your retirement fund! Cushion yourself for unexpected bills with at least $500 to $1,000. That way, all the money that goes into your retirement fund will stay there!

  1. Pay Off High Interest Debt

This might seem unrelated to retirement as well but if you have debts collecting interest, then you are losing money you could be investing in high interest retirement accounts. Try to pay down a majority of your debts by prioritizing higher interest debts. These debts can include credit cards, title loans, auto loans, and student loans to name a few.

  1. Regular 401(k) Contributions

If you are lucky enough to have an employer sponsored retirement plan like a 401(k) or a 403(b), then take advantage. Many companies will match your contributions, meaning that you will receive even more in your savings right away! Contribute to your retirement account often and regularly to start saving off on the right foot.

  1. Create a Financial Goal

After you’ve taken care of various other aspects of your personal finances and really got your 401(k) going, it’s time to sit down and create a financial goal. Once you feel comfortable, take on a more aggressive savings plan. Determine how much you’d like to have saved by the time you hit retirement and when you would like to retire. Do the math to figure out how much you are aiming to save monthly or annually.

  1. Figure Out Where to Put Your Money

Where you place your savings depends on how many years it will be sitting and gathering return. For shorter term investments, you can look at online savings, money market accounts, or short-term bond funds. For longer term accounts, you could look into a Roth IRA, traditional IRA, stock investments, etc. If there will be a large amount of money going untouched for a few decades, you want that money to accumulate as much interest as possible, so you get more bang for your buck.

You don’t have to be overwhelmed by the thought of how to start saving for retirement! When you come at it from the right mindset, saving for the most relaxing chapter of your life can be simple. Give yourself peace of mind knowing that your future is secure by starting to save today!

Image source: Pexels.com