The law firm Seyfarth Shaw LLC reports that cases under the Fair Labor Standards Act (FLSA) rose 7.6 percent in a 12-month period, continuing a trend. The firm expects the number of cases to top 9000 in 2016.
FLSA matters include charges for failure to pay; failure to pay minimum wage; misclassification; and child labor. Although raising the minimum wage receives the most media attention, the greatest risk for employers in 2016 is misclassification.
Misclassification includes classifying non-exempt employees as exempt and classifying employees as contractors. Misclassification has the attention of the DOL, the IRS, and the trial bar.
The DOL argues that misclassification is a form of wage theft. The IRS argues that misclassification is tax theft. Trial lawyers take misclassification cases because they are easy to prove and have large damage awards. The common theme of all three parties is they want employers to pay more.
Employers argue that they are simply doing what was allowed in the past before the litigation storm, but that argument falls on deaf ears, including those of federal court judges and juries.
The Seyfarth announcement states that some federal courts have made it easier for trial attorneys to certify classes of employees for FLSA matters. Opposing class certification successfully was one way defense lawyers could stem the litigation tidal wave. With that slowly eroding away, one can expect more wage and hour class actions. “Federal Wage and Hour Lawsuits Up 8%, To Record High, Firm Finds,” http://www.staffingindustry.com (Nov. 24, 2015).
Adding to the mix, 2016 is an election year, and the Obama Administration’s DOL has stated its plans to make changes before it departs.
Already promised by the DOL, but delayed, is the moving of the threshold for payment of overtime from $23,660 to a proposed $50,440. In general terms, any employee making less than the proposed $50,440 is due overtime no matter their position or job duties. This change will be fundamental and will impact every employer, especially small and rural employers and start ups that do not have the capital to pay hefty salaries, but need work hours to get a business off-the-ground.
The hits keep coming for 2016 with the July 15, 2015, DOL Administrator’s Interpretation No. 2015-1, http://www.dol.gov/whd/workers/Misclassification/AI-2015_1.htm. The Interpretation will make it more difficult for employers to classify workplace participants as contractors. The recent popularity of the new Uber work model and the use of contractors to avoid paying benefits, like the mandates of the Affordable Care Act, has many in Washington concerned. According to the DOL, misclassification leads to lower collection of tax revenue.
Although not a certainty, there is talk that the DOL will narrow some of the exemptions for 2016. If that does happen, it will also increase overtime exposure for employers.
The result of these judicial and regulatory changes is a wage and hour tsunami that will begin in 2016 and that could crest in 2017 or 2018 unless legislative changes are made. Until then, employers need to start filling their sand bags and prepare because 2016 will be a year of wage and hour change.
Myths, legends and lies are hard to dispel and correct, especially when doing so appears to financially harm the teller or believer. If the myth is true, the teller/believer does not need to purchase the coverage on which the lie is based; but if the information is false, the insured is forced to make a business decision not previously required.
Belief in and dependence on an insurance lie can financially harm the insured far more than the additional premium necessary to cover the exposure masked by the myth. But be warned, exposing these, or any, insurance lies leads to charges like, “You’re only trying to make more money off me.” Or, “Well that’s not what ‘so-and-so’ told me.”
Remember, “so-and-so” being quoted is not the insurance professional; further, the mere fact that a multitude of people believe in a lie or myth does not change or alter reality.
Beyond the non-insurance “so-and-so’s” spreading these lies, there are also agents perpetuating some insurance myths. When insurance agents or other so-called “financial experts” put their seal on such harmful lies, correcting the problem is that much harder. Lack of knowledge or dependence on what the agent heard someone else say without checking the facts are the two main causes an agent might pass along false information.
Following is a short list of myths, legends and lies told by and believed by insurance clients. Some of these are the result of just plain ignorance (not stupidity, just lack of understanding); some are the result of an “expert’s” faulty advice; and a few are actually promulgated and spread by insurance professionals. The list is far from all-inclusive.
“If I don’t have anything, they (the plaintiff, lawyers and court) can’t get anything; you can’t get blood out of a turnip.”
Want to bet? The belief that an at-fault individual cannot be financially harmed because he doesn’t have much is one of the most insidious lies conceived by its originator. Future wages can be attached; possessions can have liens placed against them, etc. Many states don’t allow the court to take someone’s house in settlement, but the at-fault party will be unable to amass much beyond the house until the debt is satisfied. A lot of what can be done might be subject to state law, but the pound of flesh will somehow be exacted.
“There is no need to purchase liability limits higher than my net worth.”
A slightly smarter version of the above lie. A person’s net worth is the value of all they own minus all they owe; why should it be the magic number, that’s not all the attorney is going to ask the court to award. More than one individual with a net worth of $250,000 (for example) has lost a $1 million (or more) negligence suit. A key rule of risk management is, “don’t risk a lot for a little.” Umbrella and excess policies are very inexpensive, bordering on cheap, compared to the limits that can be purchased – invest the small amount of money in the large amount of protection.
“That’s why I buy insurance.”
The context of this statement indicates whether this is a problem. If the insured has done all he can reasonably do to avoid a loss or injury (to the point of maximum benefit without undue burden), then there is nothing intrinsically wrong with this statement. However, if this statement is made because the insured is unwilling to take any or very few steps necessary to reduce the potential for injury or damage to persons or property, then his attitude has morphed into a moral hazard. While this may not be a limits or coverage myth, it is a statement that should make the agent question whether or not this is an insured with whom she wants to do business. Additionally, claims submitted by such individuals may need to be viewed with an eye towards possible “irregularities.”
“Corporate status will protect me from liability; I’ll just declare bankruptcy and shut down.”
Courts can and do pierce the corporate veil in small, closely held corporations. Not being able to provide legal advice (which is a disclaimer agents should provide), this is not to be construed as legal advice; but do not let a statement such as this one go by unchallenged. Governance and tax considerations should drive the choice of a legal entity-type, not protection against personal liability. A one- or two-man corporation can very likely expect to see the veil of corporate protection removed if the injury or damage is severe enough. Many insureds use this myth to avoid purchasing an umbrella or excess policy. As stated above, don’t risk a lot for a little; find court cases where the veil has been pierced and the affect on the owners.
“Insurance is all the same.”
This myth is the hardest to overcome. GEICO, Progressive, Allstate and others have effectively convinced individuals that insurance is all about price. Even insurance agents have contributed to this lie. My first phone calls as an agent began with, “I’d like to see if I can save you money on your insurance.”
Insurance should be about the protection provided not the cost. That is not to say the cost should not be considered, but you must consider the relationship you are building with your insurance carrier(s).
“It’s better to pay small liability claims out-of-pocket rather than report them to the insurance carrier.”
Who gives this advice; lawyers, insurance agents or the guy down the street who feels like he got away with an accident without it affecting his insurance premiums? I myself was a party to one of these situations on my way to visit a client.
Traffic was stop-and-go and the guy in the truck behind me neglected to do the first part – stop – and he rear-ended my vehicle. Pulling off the road into a parking lot to avoid holding traffic up even more, we exited our vehicles to inspect the damage. The driver apologized and admitted he just wasn’t paying attention (first mistake); talking further he asked, “I wonder how much it’ll cost to fix your bumper?” As it happened, we had pulled into the parking lot of an auto body shop, so I said, “Let’s ask.” (This is absolutely true.)
I found a service tech, he made a phone call and said it would cost $565 for parts and labor. The guy who hit me said, “Let me go to the bank, I’ll get you the money.” Now, I had him give me his driver’s license to hold until he returned to assure he would come back (he offered me his son to hold, but I already have two kids and didn’t want to risk adding a third). Fifteen minutes later he returned with cash in hand, I had the body shop order the part and the bumper was expertly replaced and he has nothing on his insurance or driving record. I did advise him to let his agent know, and I’m sure he did so that same day – NOT.
This appeared to work to his benefit; but what if, after thinking about it for a day or two, I decided to make some money off this accident? Is there a chance I could have begun suffering from “non-specific soft tissue injury” and developed some pain that could have only been cured by a large cash settlement?
The answer is, yes. Once he received a letter from my attorney and tried to report the claim to his insurance carrier, could they have denied the claim? Based on personal and commercial auto policy provisions, yes the claim could be denied as prompt notice was not provided to the carrier as per the “Duties…” requirements.
Make sure you notify your agent. From there, it depends on the relationship between your agent and the insurance carrier. Business auto policies state that the insured must notify an “authorized representative.” Personal auto policies simple say “We must be notified.” It is not clear if “we” includes the agent – that question is answered in the agency/company contract.
“Statute does not require me to have workers’ compensation, thus you (a higher tier contractor) can’t require it either.”
Most states require an employer with one or more employees to purchase workers’ compensation. However, 13 states don’t require workers’ compensation until the number of employees surpasses a certain threshold (usually three, four or five).
Regardless, statute is the minimum requirement in a particular jurisdiction. A contract can place requirements on the parties to a contract more stringent than statute; contracts just cannot relieve parties of statutory duties (allow them to do less than is required by law). Thus, if a contract requires a subcontractor to provide workers’ compensation coverage, then work comp must be provided even if the subcontractor has less than the minimum number of employees required by statute.
“I pay him with a 1099. He’s an independent contractor, not an employee.”
IRS and insurance rules differ greatly regarding the definition of an “employee.” Paying someone with a 1099 might make the worker an independent contractor for tax purposes (it’s not that simple with the IRS either) but there are far more stringent requirements within workers’ compensation administrative procedures as to whether the person qualifies as an independent contractor or an employee. Anytime a business owner floats this potential lie (or misunderstanding), more questions are needed to ferret out the truth. Examples of questions include, but are not limited to:
Does the employer/contracting party control the worker’s ways and means (i.e. does the employer tell the contractor when to show up, how to do the job and when to leave, or is the contractor free to perform the obligation and come and go as he pleases?);
Are the tools and materials supplied by the employer/contracting party or the worker;
Does the independent contractor work for anyone else or is his sole or major source of income the contracting party; and
Does the “independent contractor” carry his own insurance?
The level of control is the deciding factor when deciding whether a worker is truly an independent contractor or a “de facto” employee (based on the totality of the control). Don’t allow belief that a 1099 is sufficient to avoid accepting responsibility for an injury to the worker.
“If a workers’ compensation injury is less than a certain amount, I do not have to report it to the insurance company.”
Well-meaning agents may have been the creator and perpetuator of this myth. First Report of Injury laws in some states do not require the state to be notified of an injury unless it surpasses a certain threshold. The labor department in one state, for example, does not have to be notified of an injury unless it exceeds $2,000 in medical costs or results in one or more days of lost work.
Based on those requirements, it sounds reasonable for an agent to tell an employer not to notify the insurance carrier of a small claim (the worker needed a few stitches and was back to work that afternoon). However, the law says only that the STATE does not need to be notified unless the injury surpasses that threshold; nowhere does it relieve the employer of its duty to notify the insurer. In fact, the workers’ compensation policy specifically mandates the employer to notify the insurance carrier of all work related injuries, not just those that must be reported to the state. The reporting requirements before a state must be notified are those placed on the insurance company (or self-insured entity) not the employer. Employers must report all work related injuries “at once.”
Not only is this belief fallacious because of a misreading of the statute, it is also dangerous should an injury be worse than originally thought. Use the above employee as an example. He just cut his finger and had to get stitches, not problem. But suppose he develops blood poisoning leading to major complications later; the insurance carrier may hold a hard line and deny coverage for failing to comply with the policy provisions found in Part Four of the Policy (“Your Duties If Injury Occurs”). Belief in this lie could be very expensive.
(First Report of Injury requirements for all 50 states can be found in Appendix “E” of “The Insurance Professional’s Practical Guide to Workers’ Compensation.”)
“Flood insurance is only for those in ‘flood zones.’”
Every structure located in an NFIP-participating community is in a “flood zone;” your house or building just may not be in one of the more hazardous zones. This is really trying to say, “I don’t need flood insurance because I’m not in a special flood hazard area (SFHA).” It’s just not the correct terminology, but your agent needs to and must know the correct terms when discussing flood coverage. Further, being located outside a SFHA does not guarantee safety from flood loss. Approximately 30 percent of all flood claims are to properties outside of “high hazard” areas (Special Flood Hazard Areas).
A national survey revealed consumers have an alarming lack of knowledge about their own insurance coverage. As the New Year gets started, Tower Insurance urges consumers to resolve to get their insurance coverage and finances in order.
More than one-third of consumers in the study said they have never conducted their own research prior to purchasing an insurance policy. Almost 40% of consumers in the study say they are not confident or only somewhat confident that they have adequate and appropriate insurance coverage for their needs.
The new survey also found that more than one-third of policyholders have not met with or even talked to their insurance agent within the last year. A new baby, marriage, divorce, death, home renovation or a major purchase could significantly impact your insurance needs and costs. We encourage consumers to stay in contact throughout these life changes, as they can be crucial to your financial security.
Tower Insurance Agency wants our consumers to understand the basics of protecting their family, home, finances, and property. When you review your insurance policies and budget, consider the following:
Know Your Limits
One of the most important criteria when selecting an insurance policy is your coverage limit. For an example, Davis Dyer Max can increase the liability limits on a typical homeowners policy from $100,000 to $300,000 a year for as little as about $25 annually. Your coverage limits deserve a closer look.
Most people set financial goals at the beginning of the year, but by the time March rolls around, the goals have fallen to the wayside. Eric Amado of http://www.wfaa.com says, “Set realistic goals for yourself. Instead of trying to pay off your credit card immediately, allow yourself the year. Set a date and make a plan and you will reach that goal.”
Cheaper Is Not Always Better
While price should be a factor in insurance decisions, choosing coverage based on price alone could ultimately be a costly mistake; Insurance policies differ widely, with varying deductibles, coverage limits and exclusions. Review your insurance policy and consider whether saving $50 per year on your premium, is worth the risk of not having thousands of dollars-worth of coverage if you ever need it.
Buying a more economical car, versus buying a more expensive luxury vehicle is commendable when trying to save money; however, buying cheaper appliances like washing machines and refrigerators can end up being more costly, than beneficial. The lifespan on appliances and other purchases may be so short that you end up having to replace the item anyway. Sometimes it is better to purchase quality from the start.
Don’t Disregard Discounts
Many consumers fail to ask about insurance discounts for which they may qualify. Companies often offer some unique, regional, very specific and, at times, quirky discounts. When every dollar counts, some may be able to nickel and dime their way to big savings.
Check with your agent to see if any apply to you. These discounts can make a substantial difference in premium costs:
– Installing a security system
– Living in a gated community
– Updating the roof and/or wiring in a house
– Teen drivers with good grades
– Graduating from certain colleges
Subscribing to www.coupons.com and shopping at wholesale clubs are some of the basic ways to get discounts and get more bang for your buck. Ask your employer about discounts or cash back when opting out of using company insurance. Also, paying bills in a lump sum, instead of monthly, may turn into big discounts and savings.
Contact Tower Insurance Agency and let them be a guide to helping you the reach your 2016 Insurance and Financial goals. Happy New Year!
Here are the numbers:
* $525 million collected from employers;
* $356 million collected from private, state, and local government employers via alternative dispute resolution and settlements;
* $65.3 million collected on behalf of charging parties against employers via litigation; and
* $105.7 million collected from the federal government.
To determine the scope of the regulatory risk, the number to weigh the most is the $65.3 million. This number represents collections won in court against employers who defended themselves, rather than settling out of court.
The collections number on the federal government ($105.7 million) reflects the feds suing the feds. Remarkably, this means nearly one out of every five dollars collected involved the U.S. government trying to enforce the law on the U.S government.
The $356 million in settlements, mediation, conciliation, and other alternative dispute resolution is the highest dollar number, but this number includes money collected from employers (private, state and local government), that commit discrimination and settle to limit their loss, as well as from employers that settle to avoid the costs associated with litigation.
Of the settlements, it would be telling if the EEOC would provide a breakdown of how many of these settlements were under $50,000; did not include an admission of guilt; and did not require any changes in management practices. Based on my experience, I would guess most of the settlements are within these parameters, indicating nuisance value settlements…in other words an employer making a business decision to not litigate.
The EEOC states that less than 45 percent of conciliations are successful. That tells us that approximately 65 percent of employers and/or employees come to the dispute resolution table and refuse to give an inch.
Based on the numbers, you would assume that the EEOC would file a lot of cases on behalf of employees. Yet, only 142 lawsuits were filed during 2015 for discrimination. This is a small number, considering the number of employees in the United States is approximately 140 million. Even if some of the lawsuits were class actions, so as a percentage of the employed population, these are “struck by lightning” percentages.
Of the 142 cases, only 42 were high risk/high damage cases involving multiple parties or discrimination by policy (versus discrimination by treatment) and of these, only 16 were for systemic discrimination.
So, remember this percentage…0.158 percent. That is the percentage of suits brought by the EEOC for discrimination out of the 89,385 charges filed in 2015, and the percentage for high risk charges is even less.
That means if you are an employee who has suffered discrimination, your chances are pretty slim that the government will litigate on your behalf. You will have to do it on your own.
Note that the numbers collected in 2015 include charges brought in previous years, so the numbers need to be viewed as an estimate. Even so, one has to conclude that the collected amounts for the 2015 suits will be, by percentage, even lower.
As for employers, lets go back to the $65.3 million. If you add the $33.5 million collected from systemic discrimination settlements (just six percent of the overall settlement amount), this amounts to $98.8 million collected for jury verdict or employer-approved settlements for systemic discrimination (high risk cases). This constitutes less than 20 percent of the total EEOC collections.
The EEOC touts the numbers, claiming success in its efforts to eliminate discrimination. EEOC Chair Jenny Yang states:
This is a pivotal moment to renew our national commitment to combating discrimination. There is a growing awareness-across racial and ethnic lines-that we must do more as a country to address issues of equality. As we look ahead to the challenges that remain, our country must continue to invest the resources necessary to fulfill the promise of equal employment opportunity.
This statement begs the question: if employer discrimination is a national problem, why doesn’t the EEOC collect more money from employers?
I am sure the EEOC would argue if it had a larger budget and more resources, it could win more verdicts and settle more cases. Even so, this is the most aggressive EEOC in recent history, and it still does not litigate more than one percent of the charges filed.
The fact is that most employee litigation does not flow through the EEOC. Consequently, employers should not have a false sense of security that employees do not present a litigation risk…they do, and every employer should use risk management and loss prevention to curb the risk.
As for the conclusion about the risk from EEOC litigation:
* A very small percentage of employees bring EEOC charges;
* Of the charges filed, it is very unlikely the EEOC will litigate on behalf of the charging party; and
* Of the charges the EEOC does litigate, there is no guarantee the EEOC will win.
With that in mind, you should follow the advice of your counsel, but consider the following if you receive an EEOC charge:
* If the facts are unclear about whether discrimination occurred, employers should “think twice” before paying more than nuisance value when brought into the EEOC conciliation process.
* If discrimination has occurred, it is a smart business practice to use the EEOC conciliation process to negotiate a settlement.
* If systemic discrimination is alleged or multiple victims bring charges over the same matter, it is a smart business practice to use the conciliation process to negotiate a settlement.
* If discrimination did not occur and the facts are in your favor, listen to counsel; evaluate the costs, and know that the odds are the EEOC will not litigate against you. The employee may, but the government usually stays on the sideline.
Who says you need to be married to purchase a home? According to Bloomberg.com, single Americans make up more than half of the adult population—and many of them want to create their own version of the American Dream. Contacting your insurance agent can be the key to success for single folks who are in the market to purchase a home, but here are some things to consider in the meantime.
The Lone Ranger
Whether you’re single or married, purchasing a home has its challenges. It’s important to be fully armed with information in order to cultivate a plan that works for you.
To start, make a list of your current monthly expenses, take a gander at your savings account and evaluate your personal and professional goals. When you list your monthly expenses, be sure to consider pending expenses. If you’re fresh out of college, you probably haven’t felt the sting of paying student loans every month and going to work every day. If you have only saved enough for a down payment, think again—moving expenses like rental trucks and purchasing new household items can add up quickly.
Finally, don’t forget about life goals outside purchasing a home—if you plan to start a business or retire in three to five years, owning a home should probably be a dream deferred.
Lending a Helping Hand
The majority of homeowners obtain financing through a bank loan. When a married couple applies for a home loan, the bank can depend on two incomes to pay the loan back. But a single person must qualify and handle making the same payments alone. According to Time.com, “Banks are not allowed to discriminate based on marital status, but tighter lending standards can potentially pose a challenge to single buyers because they only have their own income to qualify for a loan.”
Before applying for a bank loan, be sure to tighten up your credit, pay off as many debts as possible and save a nice nest egg in order to show the bank that you don’t need another person to help you repay your loan.
You will likely need to obtain homeowners insurance in order to secure financing from the bank, but don’t wait until you apply for a loan to get insurance. Your insurance agent can be a valuable resource right from the start by giving you tips and connecting you with lenders, realtors and home inspectors—they work with these people on a regular basis.
Being single doesn’t mean you’re alone. Your insurance agent is the best partner you can have when you’re ready to buy your dream home.
The holidays are a time for celebration and family. Most people have a few extra days of vacation to relax, and some use this time to play catch-up or finish projects that have been looming for the past year.
You can utilize this time to complete (what should be) an annual home inventory. We don’t want to discourage you from doing inventory on your different-colored tube socks, but this home inventory is geared toward helping you maintain an accurate record of your valuables for insurance purposes. A home inventory is a list and visual record of all your personal belongings, which will help you find replacement items if you ever need to do so.
Use this as a quick guide, and then you can get back to your sock count!
Start from the purchase. Keep all receipts from large purchases like electronics, expensive artwork and jewelry. If you don’t have the receipts, use old credit card statements for proof of purchase.
Take photos. You should take photographs of all of your possessions for your records, and keep them with your inventory list.
Make note of serial numbers. Record serial numbers of items where applicable—you can provide these for police if your belongings are ever stolen.
Keep copies of records. Maintain your records in a safe place, preferably a fire-proof safe alongside other important information. In addition, keep electronic records by either emailing the information to your personal email or uploading it to a secure place.
Not sure what goes on the list? Think about this:
Buying a new teapot does not warrant a spot on the inventory. But if you just gave your kitchen a facelift that includes everything from new cabinets to appliances, definitely add those items and the labor to your home inventory.
Back to the socks!
Once you’re finished with the “official” inventory, go ahead and count those socks. Use this time to do the following:
Stock up for the winter by preparing all your essentials in case the weather gets bad: shovels, sidewalk salt, candles, firewood, canned goods and frozen meats.
Check all appliances—including your stove, water heater and thermostat—to make sure they are in good working condition before the weather gets too cold.
Get organized. Sort through the photos on your computer, upload CDs to your iTunes account and get rid of the Tupperware with no matching lids. You will thank yourself once the New Year is here!
Go through your clothes. Good rule of thumb: If you haven’t worn it in the last two years, get rid of it. Donate clothing to a shelter or go online to sell the items. You can use the extra space to make room for new Christmas gifts
If your home inventory reflects items that are not covered under your current policy, talk to Davis Dyer Max for additional information about coverage you may need. Enjoy the holidays!
2016 is just days away, and that means it’s time to get your finances in order. Many people find it easy to begin the journey during the first week of January, but by March, bad habits begin to resurface. Here are 16 tips that can take your finances to the next level—and help you stay financially strong throughout the entire year.
Take a snapshot.
Having an idea of what you want to do is great, but putting your plan on paper is the key to success. Pull out a pen and calendar and write down your life ambitions, upcoming events and realistic financial goals. This will give you a snapshot of the reasons for tightening your financial belt and will serve as a useful reminder when times get tough.
Hold a Gift Exchange
Did your children receive tons of clothes from your family for Christmas? Before you pop tags, evaluate how many shirts and pants they truly need—then pack up the remaining items and head to the store. Ask if you can exchange the clothing for larger sizes and get the same pieces in sizes your child would wear a year from now. You will save money in the long run without upsetting well-intentioned gift givers.
Use the fireplace.
Energy bills creep up on you during the winter months. The fireplace is the perfect way to offset costs. If you are lucky enough to have a fireplace, put it to good use during the colder months. Come up with creative ways to feel the heat, like having a family game night in the living room by the fireplace.
Lead by example.
Don’t wait until they’re heading off to college—teach your children to be financially savvy at an early age. When they receive cash gifts or an allowance, show them what it’s like to be in the real world by making them save a percentage of their money or “taxing” their money. You can secretly put some in an interest-bearing account and, each year, show them how their money is growing. By the time your kids are ready to leave the nest, they’ll thank you for helping them to create a healthy nest-egg.
Sleep on it.
You’ve heard this piece of advice before, and it’s still relevant: Don’t make impulse purchases during your journey toward financial freedom. This doesn’t mean you shouldn’t buy anything, but you should definitely give yourself time to think about why you are making the purchase and whether it aligns with your financial plan (see Tip #1). Shop around, do your research and revisit your plan to ensure you are making the right decisions.
Do the 52-Week Money Challenge…in reverse.
If you’ve never heard of the 52-Week Money Challenge, you’re missing out. This is a fun, year-long savings plan that will leave you with $1,378 at the end of the year. The plan originally calls for a person to start by saving $1 the first week, $2 the second week and so on—each week, the number continues to increase. But instead, try the challenge in reverse, saving $52 the first week, $51 the second week and so on. You will stay motivated by seeing immediate results—and as the weekly amounts decrease, it becomes easier to continue the challenge.
Start a side business.
Are people always asking you to sing? Earn money singing at weddings. Do you bake the best cookies on the block? Ask friends about catering their next event. Everyone is good at something, and using your talents to make a little extra cash on the side will definitely help you to reach your 2015 financial goals.
Take note of your triple payday.
Most employees have 26 pay periods within a year. This means that two times out of the year, you’ll receive three paychecks in one month instead of just two. Take advantage of these times to attack those nagging bills you could pay off in one payment. Consider your insurance premium—you could pay your entire premium for six months, which would free up more monthly cash during that six-month period. Do it all over again when your extra pay period comes around and you’ll always feel ahead of the financial “game”.
Go for the big freeze.
After you’ve paid your insurance premium, you may have money left over—but don’t spend it on the wrong things. Wholesale warehouse clubs like Costco and BJ’s have more than just 80-count rolls of toilet paper. Take advantage of their bulk-buying deals and put your deep freezer to good use. You can purchase non-perishable items and “freezable” food like meats, frozen vegetables and pasta, split the items into smaller dinner portions and throw them in the deep freezer for future use. Unthaw food as you need it—and save a pretty penny while you’re at it.
Start saving now for next Christmas.
Many banks have savings accounts that automatically deduct a certain amount of money every time you swipe your debit card. The amount is usually up to your discretion—most people opt for $1 deduction for every transaction. Use this fund as a Christmas savings account and decide that whatever amount accumulates by December is the amount you will spend on purchasing Christmas gifts next year.
Review, review, review.
Did you get a new appliance or gadget for Christmas? Did you talk to your agent about your purchase? If your answer is no, you’re making the same mistake many other people make every year. When you purchase big-ticket items and make upgrades to your home, it is very important to speak with your insurance agent regarding changes you may need to make to your insurance policy.
Give your money away.
You can garner major tax deductions if you donate money to 501(c)(3) nonprofit organizations. Do your research to make sure an organization meets this classification—you can donate money, clothes, cars and anything else you have. The tax deduction is good, but giving to those in need is even better.
Review employer benefits.
Whether you’ve been with the company for less than a year or more than two decades, it’s important to regularly review your employee benefits package. As your life changes, you may find certain programs beneficial to your lifestyle. Even if you opt out of your company’s benefits, it’s always important to ask questions. Your company saves money when you opt out of some benefit programs and as an incentive, some companies will offer cash if you choose to forgo their benefits package. Schedule some time to speak to your human resources manager and dust off that employee handbook.
Take advantage of online sales.
Many of us do not use up to 40% of the clothing and appliances we have in our homes. Use your closet and cupboards as a gateway to the world of e-commerce. Selling your personal belongings is never easy, but focus on the financial benefits and how great it will be to de-clutter your home. Use notable platforms like eBay and make transactions through a secure merchant like PayPal. Beware of scams and fraud and remember: If an offer seems too good to be true it probably is.
Live a little.
Working hard to reach financial goals is definitely worthwhile. But it’s important to enjoy the fruits of your labor as well. You can have fun while still achieving your financial goals as long as you plan effectively and efficiently. Allot a certain amount of “splurge money” each month or each quarter and enjoy what you spend. This will keep you motivated and remind you of why it is so freeing to be financially sound.
Use Tower Insurance Agency as a resource for reaching your financial goals. May your 2016 be a year of happiness and prosperity!