During open enrollment or when you start a new job, you may find that your company offers the chance to enroll in a Flexible Spending Account (FSA - registered trademark). It might seem annoying to have money deducted from your paycheck at first, but it can actually save you money on health care expenses in the long run.
An FSA is an account that takes money from your paycheck and puts it into a special account that you can only spend on certain healthcare items or eligible medical services.
You can use an FSA for copays for visiting the doctor, prescriptions, and even for services like new retainers or glasses. Some of the FSA-eligible expenses you might not even think about include sunscreen, condoms, and tampons.
Parents and children of elderly might be familiar with Dependent Care FSA, a similar pre-tax benefit used to pay for things like after school programs and even adult daycare.
The money taken out of your paycheck is pre-tax, meaning that while you can't spend the money on just anything, if you are able to estimate your medical expenses for the next year, you can avoid paying payroll taxes on up to $2,750.
If you've had your eye on LASIK surgery (eye – LASIK, get it?) you can include extra money in your FSA contribution for the next year and pay no taxes on the money from the FSA you use to pay for the surgery.
Many plans allow you to access the full year's contribution on January 1st. This means you can use the FSA as an interest-free loan for medical expenses. The money is going to be deducted from your paycheck anyway, so why wait?
The big downside to an FSA is that you usually can't change your contribution mid-year. So, if you run out of money in the FSA funds in July, you'll have to use regular after-tax dollars to pay for qualified goods and services.
Conversely, put in too much, and you might be scrambling in December to find eligible expenses to spend the money in your FSA account. An FSA is use-it-or-lose-it – you have to spend all the money that year or poof, it's gone. However, if you have funds remaining in your account at the end of the plan year, there is a grace period of two months and 15 day. That means you have until March 15th to spend money from the previous year.
To decide how much to contribute to an FSA, I recommend a few steps:
- Look at your qualified medical expenses that happen on a regular basis. If you know you're going to have a $20 copay every week for therapy or a $35 copay every six months for a checkup, take note of it.
- Think about any big procedures or items you might want in the next year. If you're thinking it's about time for new prescription sunglasses, be sure to set aside some money for that.
- Do some research about what FSA-eligible items you use regularly and get a rough estimate as to how much you might spend on them. I usually check out the FSA Store to get an idea of the different categories. If you're addicted to a certain lip balm or have been dying to try light therapy for your acne, try to get a ballpark idea of how much you're going to spend next year. I don't know what guy needs to hear this, but you probably do not need that many condoms even if they are tax-free.
- I like to then add a small gross up for incidentals that may pop up (nobody plans on spraining a wrist) and any random expenses you might have (if you have to pay for parking at the hospital or something, you can use your FSA). The specific amount depends on how comfortable you are of running out of your FSA if something comes up and how much extra you can afford to set aside each week from your paycheck.
- Add that all together and that's how much you should set aside in your health care FSA.
Once you have your limited purpose FSA, you can use the FSA mobile app for deadline reminders and eligibility checks.
You can retain hundreds of dollars a year in tax savings by paying your medical expenses with money from your FSA all while keeping you healthy. If your employer offers one with your health insurance benefits, I definitely recommend enrolling. Spend more on your health, and less on the internal revenue service.
Home garden and porch
As anyone who has ever sold a house will tell you, you must prioritize curb appeal. Before a potential buyer even considers looking inside your house, they notice the outside first. Does it attract the right kind of attention? Does it take away from the feel you're going for? If you plan to sell sometime soon, you must think about these things. Here are some landscaping options to increase your home's curb appeal, so you can get the best price on your home.
Extensive Plants and Greenery
A barren front yard won't get you the price you want on your home. So, invest in at least a little bit of greenery to keep the surrounding area from looking too dead. Shrubs and bushes tie the house to the lawn that precedes it, and flower beds bring a pop of color to an otherwise drab structure. You can also strategically plant some trees to improve the overall feel of your home's exterior.
Lawn Care
As we mentioned, your lawn is one of the most prominent features of your home's exterior. A patchy, dried-up lawn will quickly drive your home's price way down. Some of the best landscaping options for your home's curb appeal involve improving your lawn for the next inhabitant. Overall fertilization, ground aeration, underbrush removal, proper mowing—all of these lawn care tasks contribute to a greener and more lively area that invites people to see your house, rather than stay away from it.
Paved Pathways
There's nothing like a broken and disheveled pathway to make someone think twice about buying a property. Just as you want the entryway in your house to be welcoming, so too should the pathway leading up to the house be inviting. The pathway from the street to your front door provides plenty of real estate to get creative with. You don't have to settle for a boring concrete pathway. Consider something more eye catching, like a cobblestone path or intermittent brick patterns, as a way to better welcome potential buyers.
Usable Outdoor Furniture
Landscaping doesn't just involve the ground you walk on; also included are the items you use as extras to the overall look. Outdoor furniture is one such extra that you don't necessarily need but can look quite attractive if done correctly. Staging is important with outdoor furniture. Old, broken-down pieces will only look like more work to the potential buyer. A few comfortable chairs, a bench, or a table with an umbrella really go a long way to improving your outdoor aesthetics.
A good tip for deciding on curb appeal items is to decide what you personally would want to see as a part of a welcoming home's exterior. You don't need to go overboard, but a little bit of forethought could net you quite a lot of extra cash in the sale.
Unfortunately, giving back can sometimes go haywire. If you're ready to make a donation, first consider common mistakes made when giving back.
Many people strive to support their community by donating their time or their money. When you find a meaningful cause, you might be quick to cut a donation check. Though it's admirable to be quick to act charitably, you should be wary of several common mistakes made when giving to charity. Being mindful of these mistakes and learning tips for making informed charitable choices can help you make the most out of your generous check.
Acting Quickly Out of Emotion
Mission statements are meant to be compelling. If you're an emotionally driven individual, it's natural to pull out your wallet at the sight of a sad puppy on TV or when informed about food insecurity over the phone. Unfortunately, not all charities are as effective or official as they may seem.
Take your passion for helping others one step further by making sure your chosen charity is legit. Speaking with a representative, reviewing their website and social media accounts, and looking at testaments online can give you a better idea of whether the organization is worth your donation.
Forgetting to Keep Record of the Donation
Don't forget that you can reap some financial perks from giving back! With the proper documentation of your donation, you can acquire a better tax deductible.
If you donate more than $12,400 as a single filer or $24,800 as one of two joint filers, you're eligible to deduct that amount from your taxes. So, when a charity asks if you'd like a receipt of donation, always answer yes.
Donating Unusable Materials
Most charities can utilize a monetary donation—it's the physical donations that usually cause some issues. Providing a local nonprofit with irrelevant materials or gifting them with unusable products are surprisingly common mistakes made when giving to charity.
Always check your intended charity's website for a list of things they do and do not accept. The majority of places will provide a guideline to donating or offer contact information to clarify any questions.
Strictly Giving at Year's End
As more and more people get into the holiday spirit at the end of the year, nonprofit organizations see an influx of donations. While it's great to spread holiday cheer via a monetary donation, it's important to keep that spirit going year-round.
With regular donations, charities can more effectively allocate their annual budget. Setting up an automatic monthly donation with the charity of your choosing can maximize your impact. You can account for a monthly donation by foregoing a costly coffee every once in a while.
Knowing how much you should spend on home maintenance each year is hard to figure out and may be preventing you from buying your first home. The types of costs you'll incur depend on the house you buy and its location. The one certainty is that you should start saving now. Read on to figure out how much to start setting aside based on the home you own.
The Age of Your House
Consider several factors when budgeting for home repairs. If you've purchased a new home, your house likely won't require as much maintenance for a few years. Homes built 20 or more years ago are likely to require more maintenance, including replacing and keeping your windows clean. Further, depending on your home's location, weather can cause additional strain over time, so you may need to budget for more repairs.
The One-Percent Rule
An easy way to budget for home repairs is to follow the one-percent rule. Set aside one percent of your home's purchase price each year to cover maintenance costs. For instance, if you paid $200,000 for your home, you would set aside $2,000 each year. This plan is not foolproof. If you bought your home for a good deal during a buyer's market, your home could require more repairs than you've budgeted for.
The Square-Foot Rule
Easy to calculate, you can also budget for home maintenance by saving one dollar for every square foot of your home. This pricing method is more consistent than pricing it by how much you paid because the rate relies on the objective size of your home. Unfortunately, it does not consider inflation for the area where you live, so make sure you also budget for increased taxes and labor costs if you live in or near a city.
The Mix and Match Method
Since there is no infallible rule for how much you should spend on home maintenance, you can combine both methods to get an idea for a budget. Average your results from the square-foot rule and the one-percent rule to arrive at a budget that works for you. You should also increase your savings by 10 percent for each risk factor that affects your home, such as weather and age.
Holding on to savings is easier in theory than practice. Once you know how much you should spend on home maintenance, you'll know what to aim for and be more prepared for an emergency. If you are having trouble securing funds for home repairs, consider taking out a home equity loan, borrowing money from friends or family, or applying for funds through a home repair program through your local government for low-income individuals.
