Saving money is hard without a plan. Below, the best tips on how to save money from experts and media around the world.
Beware phony IRS call
An “alarming” number of Americans are being targeted by a dangerous tax scam, said Brianna Ehley at The Fiscal Times. The Treasury Department says nearly 300,000 people in the past two years have been contacted over the phone by callers claiming to be agents of the IRS. The agent says you owe unpaid taxes and you must pay now, through a prepaid debit card or payment voucher, or face arrest, deportation, or the loss of your driver’s license. Around 3,000 taxpayers have fallen prey to the scam calls, paying a collective $14 million. Remember: “The IRS always contacts people by mail if they owe taxes” and “never asks taxpayers to pay using a prepaid debit card or wire transfer.”
Negotiating your first salary
“Asking for more money when you’re just starting out can be intimidating,” said Kristin Wong at Lifehacker. But negotiating your first salary is crucial, because future employers will use that figure “as a benchmark.” One tip to ensure a successful negotiation is to “think like an employer,” especially when your work experience is thin. “Without a proven track record of your abilities, you’ll have to work harder to show the potential employer that you can provide value.” Emphasize your skills, and do some research to know how much you should ask for and what the company can afford. If it can’t match your dollar figure, “think beyond salary.” Cash is just one part of your compensation package, so consider negotiating over title, schedule, time off, and other benefits.
Weighing your nest egg
When should you start shifting your retirement accounts out of stocks? asked William J. Bernstein at The Wall Street Journal. A series of bull markets over the past two decades led Americans to grow “ever more comfortable with stock-heavy portfolios.” But if recent history tells us anything, it’s that these market runs will end. So when should you “stop playing” the stock game with your nest egg? Simple: “When you’ve acquired enough assets to provide your basic living expenses for the rest of your life.” Add up your basic annual expenses plus taxes you’ll owe, and then subtract Social Security and, “if you’re lucky, pension checks.” The amount left over is your residual living expenses (RLE). “A good rule of thumb is to have, at the very least, 25 years of RLE saved up to retire at 60, 20 years to retire at 65, and 17 years to retire at 70.”
Get approved for the cards you want
“Rejection stings,” said Jason Steele at Credit.com, not least when it’s for a new credit card. Luckily, there are a few tricks to maximize your chances of getting approved. The “single most important factor,” of course, is maintaining a high credit score by paying your bills on time and carrying as little debt as possible. You also want to “space out your credit applications.” Lenders “view multiple recent applications for new credit cards as a warning sign of financial trouble.” If you are rejected, call and ask for your application to be “reconsidered,” and if that doesn’t work, take the lesson to heart. Creditors often send a rejection letter that will explain why you were denied, so “you can take targeted steps to remedy the problem” next time.
Paid family leave for federal workers
The White House is making a big push for more parental leave, said Steven Mufson and Juliet Eilperin at The Washington Post. President Obama signed an order last week instructing federal agencies to give workers six weeks of paid family leave to care for a new child or ill family members. In an article posted on career site LinkedIn, Obama senior adviser Valerie Jarrett said the president will also call on cities and states to adopt similar paid leave policies and will provide funds to conduct feasibility studies. “Only three states — California, New Jersey, and Rhode Island — offer paid family and medical leave,” Jarrett wrote, even though studies have found that providing paid sick and parental leave improves workplaces without hurting companies’ economic output.
The case for online savings accounts
“Americans are not known as great savers,” said Ann Carrns at The New York Times, but 2015 offers the chance to turn over a new leaf. This year, “an improving job market and plunging fuel prices” may allow consumers to start saving more. Unfortunately, “anemic interest rates” don’t appear likely to budge soon; the average annual yield for a savings account hovers around 0.17 percent, meaning you’d earn just $1.70 this year on $1,000. A better option is to save your money with online banks, which typically “offer better interest rates and charge lower fees” because they don’t have the cost of maintaining physical branches. GE Capital Bank’s online savings account and MySavingsDirect both offer 1.05 percent. That’s “hardly a life-changing” yield, but it’s better than nothing.