Posts in Category: saving

How to Create a Holiday Budget and Avoid Post-Holiday Stress 

By Daniel Jacinto

The kids are back to school, temperatures are getting chilly, and store shelves are filled with pumpkin-spiced everything marked down on clearance…these are all symptoms of Autumn falling upon us. Before you know it, the holiday shopping season will be here—and immediately after—the post-holiday season that’ll leave you feeling broke.

Fear not holiday shoppers, you can remedy that holiday hangover and keep from feeling like you only have lumps of coal. Follow these steps to keep your wallet in check after the holiday shopping season.

Create a Gift List

Decide whom you’ll be buying gifts for this season, ask them for gift ideas, and come up with a number of how much you can spend. Create a list and stick to it.

Start Saving ASAP

Once you’ve created a gift list and a budget, open a savings account at a credit union and start depositing small amounts of money. This will keep your spending on track.

Many credit unions require a minimum balance on a savings account of at least $5, which is doable to keep the account active for next year’s holiday shopping. To find a credit union near you to open up your holiday savings account check out our credit union search engine here.

If you need to save more try selling unwanted items online on sites like eBay or on your mobile device on the Let Go app.

Shop Early and Before Black Friday

The best time to shop is right now before the Black Friday mess. The deals offered may run a week prior to Black Friday or Cyber Monday deals. Having worked at a retailer before, I’ve seen pre-Black Friday sales that were the same as the Black Friday sales.

The deals you typically find may not actually even be the best ones, at least compared to sales offered throughout the year.  They may even be the same ones from recent years. A Nerdwallet.com study surveying Black Friday deals in 2013 comparison to 2014 at 27 stores found that 93% of the ads contained at least one repeated deal.

O.K., smart holiday shopper. Now that you’ve got the remedy to your post-holiday stress you can start planning that tropical vacation you’ve been dreaming about…or building up your savings for a rainy (or snowy) day.

10 Back-to-School Money Saving Tips 

By: Daniel Jacinto
August 29, 2016 Categories: saving tips

Crowded stores, long lines, empty shelves…this all sounds kind of like the holiday shopping season when it isn’t! It’s the second largest consumer-spending season according to the National Retail Federation: back-to-school shopping. And it has gotten expensive!

The National Retail Federation foresees households of K-12 graders will spend an average of nearly $700 on clothes and accessories, electronics, shoes, and school supplies. For college students it’s closer to $900 when factoring in electronics.

This all sounds like a lot doesn’t it? That $700-$900 may not always be at your disposal and charging the credit card or taking out a small loan wouldn’t be the wisest idea either.

Below are 10 back-to-school money saving tips mentioned on MoneyTalksNews.com that may help you and your family save some cash in the coming month:

1. Make a List
Some schools and colleges are good at giving students a list of necessary school supplies. Use those lists to stay on-track when shopping and avoid unnecessary purchases.

2. Check Closets and Drawers
Before you go shopping, take stock of what you already have! Look in your kids’ closets for wardrobes that still fit and sell any that don’t to make a quick buck. It’s also a good way to remove clutter from your home!

Don’t forget to check desk drawers. You may find pens, pencils, notebooks, erasers, and more lurking around in your home.

3. Look for ‘Like New’ Supplies
With all the garage sales going on in the summer, you’re bound to find supplies at even cheaper prices. One student’s trash is another student’s treasure!

4. Clip Coupons
Check out coupons from retailers. Target is one retailer that offers their own store coupons and promotions for school supplies.

5. For College Students: Cheaper Textbooks
Don’t wait on that bookstore line to purchase overpriced books with little re-sell value. Rent books online on sites like www.chegg.com or www.skyo.com for over half the price of buying.

6. Bulk Up!
Got a big family or friends to share a jumbo size purchase with? Find great value at a warehouse club on school supplies.

7. Shop at Discount Stores
Have you shopped at discount stores like Marshalls and T.J. Maxx? Find good quality clothing and book bags for your child at great prices. College students can find discounted bedding and kitchen supplies.

8. Search for the Best Deal on Big-Ticket Items
Need to buy a big-ticket item like a computer? Check out sites like PriceGrabber and Nextag to find the best price. If you’re going to buy online check out RetailMeNot for coupon codes before checkout.

9. Wait Until September Clearance Sales
If you have enough to hold you over until the fall, do so. You’ll find amazing deals on clothing, book bags, and lunch bags after the first few weeks of the school year.

10. Just Say “No” to the Unnecessary
We’re all guilty of being caught by good in-store marketing that’ll get us to buy something we don’t need. This is why you should create a list to begin with to keep you on task! Don’t buy the fancy overpriced pencils, pens, folders, etc.

Also, don’t be influenced by your kids to get something that is also unnecessary. Stay on task!

How to Cope with Daylight Savings Time 

By Daniel Jacinto
March 09, 2016 Categories: saving tips

It’s that time of year again where the temperature warms up and the huge snow mounds left over from worse days are all or nearly melted. It’s also that time to spring forward! The clocks will change for Daylight Savings Time (DST) on March 13th this year at 2 a.m. The effects of this one-hour change will give you an extra hour of sunlight at the expense of one hour of glorious beauty sleep.

How can you cope with the change and avoid the grogginess when you lose your hour of sleep when the time changes? Here are a few tips to help with the adjustment:

Go to bed a little earlier the night before.

It’ll help you feel completely recharged the next morning! It’ll probably make it easy to not crush your snooze button first thing in the morning or snooze your various alarm clocks set up on your smartphone. Disclaimer: This is providing you aren’t already sleep deprived or consuming alcohol or caffeine before bedtime. But really, who isn’t already sleep deprived or with a nightcap before bedtime?

Reset your internal clock.

Light suppresses the secretion of the sleep-inducing substance melatonin. It’s important to spend as many hours in light during the day and limit your exposure to light in dark hours. Another added plus, a lower energy bill! WARNING: DO NOT live in complete pitch black darkness in your house. You might knock over your favorite coffee mug walking through the halls and ruin your Monday morning before it even starts. Please do have a night-light installed so you can see where you are going in your home.

Practice good sleep hygiene and create a sleep-friendly environment.

If you need to wake up early, don’t pick up your favorite alcoholic drink right before bed! I know it’s tempting, but Mondays are already difficult to take. Don’t make it worse. Also, don’t drink any caffeinated beverages right before bed. Why wake yourself up before getting ready to go to bed?

Practice some calming rituals before going to bed. Take a hot bath or wear (comfortable) earplugs and eye masks. It’s crucial you wake up at the same time every day as well.

So there you have it. Some easy ideas (I hope) to help your Monday morning after you spring forward!

7 Thoughtful Gifts for Your Valentine Without Breaking the Bank 

By Daniel Jacinto
February 08, 2016 Categories: saving

The romantic day of the year is upon us! As most other holiday gifts, Valentine’s Day gifts can be pricey… but you can impress your sweetheart this year and still leave your budget intact. Remember what mom and dad used to say? “It’s the thought that counts.” You just have to use some creativity (and lots and lots of love) to come up with one of the most thoughtful gifts for your Valentine.

Let the creativity begin! Here are a few ideas to get your creative juices flowing.

1. Order a Customized Jigsaw Puzzle
Shutterfly.com lets you create a jigsaw puzzle out of a photo of you and your sweetheart. 

2. Cook a Romantic Dinner
Home-cooked, candle-lit dinner for two? This is surely a romantic way to tell your sweetheart how much they mean to you. Pick up the ingredients for your loved one’s favorite meal and prepare it for a romantic evening.

3. Put Together a Bag of Your Partner’s Favorite Sweets
Charm a loved one with a bag of their favorite candies. Find a decorative bag at grocery store and fill it with sweets you know your love craves. Tie a big red bow and voila!

4. Breakfast in Bed
Cook up your sweetheart’s favorite breakfast and present it with some flowers and a card bedside.

5. Handmade Romantic Card
Let your artistic side flow! Even if you aren’t Michelangelo himself you can certainly create a masterpiece card that your love will adore. Create a sweet or silly card and fill it with love.

6. Make a Printed Photo Book
Create a small photo book with a couple of pictures highlighting special experiences together. There are sites online that let you upload photos and construct a photo book. Here are just a couple mentioned in The Washington Post.

7. Create a Video Collage
For the more tech-savvy, create a video montage with photos of you and your sweetheart with their favorite song in the background. Most computers nowadays come pre-installed with free easy-to-use video editing software. 

 

Halloween: How Do You Stash Your Earnings?...I Mean Candy? 

By: Austin Rigby
October 31, 2014 Categories: saving

Kids have Halloween. What holiday do we have?

Once a year thousands of kids dress up as witches, princesses, Captain Americas, and anything else you can imagine. They can be whatever and whoever they want. After taking on these new identities, they walk door-to-door seeking a treasure haul of a lifetime: armfuls and armfuls of candy.

Think back to those days when you’d don makeup, wigs, masks and witch’s brooms…you were dressing up as something you’re not, maybe even something you aspire to be (not a ghost or goblin, per say, but maybe Babe Ruth or a pop star) and you were getting “paid” under the All Hallows Eve moon, no matter who and what you were dressed as, in sugar and chocolate. 

How did you consume your candy? Did you gobble it all up in one night, leaving you sick with a belly ache? Did you divvy up and make piles of the different types, saving the best for last? Did you stow away some pieces in a drawer or closet so you can enjoy some after the Halloween hoopla is over?

Halloween is kids’ treasure trove holiday, where is the one for us adults?

Here is the solution, its called “Salary Day.” Just like the kids, we also would go through the process of changing our identities for a day! While kids dress like ghosts, pro football players, and pirates on Halloween, our costumes would be slightly different. We would dress in different occupations than our own such as doctors, lawyers, engineers, maybe even Bill Gates. Instead of walking from home to home, we would instead walk to banks, colleges, law firms, Wall Street, etc., and receive from each a weeks worth of pay within the respected professions in which we dressed up as. When we returned home, within our arms WE would have a treasure trove of a lifetime. Unlike candy, we could use this to pay off car loans, take ballet lessons, finally take that family vacation to visit Aunt Marge, or even BUY a lifetime supply of candy.

Sounds a little bit like real-life condensed in a day, right? Now that you’re all grown up, you don’t just get “dressed up” for a “job” only one day a year. Or get paid in candy. And, no, work usually isn’t as much fun as running amuck with all your friends, a pillowcase of goodies in your hand.

But you’re still earning something priceless. Now, as an adult, how do you stow away your candy….or shall I say earnings? Do you spend it all in one night feeling somewhat sick the next morning? Do you split it between accounts, spending a little here and there? Do you stow some away for a rainy day?

Unless something crazy happens, I don’t think my genius idea of “Salary Day” is going to happen anytime soon.

But we can learn a little something by looking back at the habits of our Halloween youth and apply those lessons to our adult selves. Whether we’re “dressed up” as a doctor, astronaut or pro baseball player, or something a little less exciting like a manager or student…we must make sure that we hold back on the urge to splurge and keep a little something sweet stowed away for a rainy (or spooky) day.

And because this is a blog dedicated to the benefits of credit unions, what’s the harm in shamelessly plugging the benefits of storing your cash someplace a little less scary than a traditional bank. Credit unions are non-profit organizations run by their own members that pool their resources for the benefit of those members. Because their profits aren’t going into the pockets of shareholders, credit unions can offer many benefits to members, such as lower rates on loans and higher rates on savings accounts. Also, credit unions don’t care what your occupation is, all they care about is that you’re a MEMBER, which means you are also an OWNER. Being a member means YOU have a voice within the financial institution, and that the employees will do whatever is possible to take care of you.

I will submit my “Salary Day” idea to congress so we can get it passed as a holiday, but in the meantime grab your own money by joining a credit union today!

"Out of sight, out of mind" Financial Philosophy. How cookies taught me to be better with my money. 

By: Gabrielle Leach
July 31, 2014 Categories: saving

Cookies are great. My will power is not. The other day I sat down with a roll of Oreos while I was watching late night TV. As Jimmy Fallon was telling his jokes I was sitting comfortably on the couch blissfully eating my cookies, until I sadly realized I had only one left. Unsure how I had managed to eat an entire sleeve of cookies I rationalized with myself about the final one:

If I eat it, I would have no cookies for tomorrow.

But it is only one cookie, and cookies are there to be eaten. After all I will probably get more cookies in the future.

But I know that it is bad for me to eat all of the cookies, and I know I am going to regret this when I wake up tomorrow.

Oh well, YOLO, after all I’m young, and it’s not that big of a deal

I gave into the little devil on my shoulder and of course the next morning I saw the cookies again as I stepped onto the scale. It’s funny how bad decisions tend to remind you that you’ve made them. I wanted to fix this problem so that I would be unlikely to easily give into temptation again. I then went down to the pantry and hid the rest of the Oreos. Out of sight, Out of mind. It was at this moment that I realized I rationalized eating that last cookie the way I rationalize spending my money.

“Out of sight, Out of mind” philosophy can be applied to cookies, as well as finance. If you’re like me, and have moments of impulsive weakness, you may see some irregularities in your monthly spending.  Opening up a second bank account, separate to the one you regularly use, can really help you save up an emergency fund. Sometimes seeing a lot of money in one account can make you feel as though the money is there to spend. By separating the money into two different accounts, you can save money with out realizing it.  

Currently I have an account at a credit union as well as a traditional bank. I use my traditional bank account regularly but I keep my emergency fund with my credit union because they offer better rates and have a very low minimum balance, so I wont get charged if I have to use everything in the account. Each month I automatically put a piece of my paycheck into my second account for my emergency fund. I find that this system gives me the ability to control my money and the peace of mind that comes with financial security.

While eating the last cookie isn’t nearly as dangerous as spending your last dollar, the same philosophy can still be applied to help you manage your will power. Cookies are great. Overindulgence is not. By understanding your financial weaknesses and utilizing different tactics to most effectively manage your money, you can afford to buy your cookies, and eat them too.

How to Manage Money in Your 30s 

Make the Right Financial Decisions and Establish Good Habits During this Pivotal Decade
March 20, 2014 Categories: saving tips

 

Your 30s can be a pretty significant decade. It’s a transitional point in life in the wake of post-collegiate years where your career starts to take off and you begin to settle down a bit, maybe buying a home, getting married or having kids. Or you might be planning major life adventures, like travelling or writing that novel you always meant to pen. Or, perhaps, all of the above. Whatever your path, you likely face some significant money decisions, and the choices you make can end up impacting your finances for years to come.

A report released from the Pew Research Center earlier this month shows that millennials, the oldest of whom are just entering their 30s now, face higher student debt and unemployment levels along with lower income and wealth levels compared to previous generations at the same age. A tough hill to climb. At the same time, they are optimistic about their economic futures, with most (80%) saying they have enough money now or will one day to “lead the lives they want.”

To increase the chances that such an optimistic outlook comes to fruition, here are seven money moves from U.S. New & World Report that financial experts say you should consider in your third decade:

1. Save when you can.

“If you’ve gotten your salary up to the point where student loan debt is not wreaking havoc in your life anymore, but before you have a lot of responsibilities, that’s a great opportunity to super-charge your savings,” says Jean Chatzky, financial editor of the Today Show and author of “Money Rules: The Simple Path to Lifelong Security.” When parenting responsibilities and mortgage costs take off, for example, it can be hard to save more. “You want to take advantage of the opportunities you have to sock away some money so when the leaner years come around, you don’t beat yourself up,” she adds.

2. Create solid habits.

It’s also time to establish financial habits that will serve you well for the rest of your life. Kerry Hannon, personal finance expert and author of “Great Jobs for Everyone 50+,” says in her 30s, she maxed out her retirement savings accounts and even set aside a portion of her extra freelance income for retirement. “Those funds have served me well over the years as mad money to help pay for vacations and more. I still save outside of retirement accounts religiously in my 50s, too. It's a habit I started back in my 30s,” she says.

3. Plan out your goals and priorities.

“Hopefully you’re starting to become established in your career and can begin to contribute, if you’re not already, to an employer-sponsored retirement plan, and begin to think about other savings goals, too, like a home purchase or college savings,” says Suzanna de Baca, vice president of wealth strategies at Ameriprise Financial.

Trent Hamm, founder of the personal finance Web site The Simple Dollar and a U.S. News My Money blogger, says at age 35, he’s now reflecting on his career goals for the next 30 years. “What would I like to be doing with my time and my life? I don’t want the rest of my life to be a repetition of what I’m doing now and then an abrupt retirement. I have dreams and goals, and right now is the best time to get started on them,” he says.

For many people, a financial advisor helps with that. Bart Astor, author of “AARP Roadmap for the Rest of Your Life,” says your 30s is the ideal time to sit down with a financial advisor and talk, which is what he started doing in his mid-30s. He says he and his advisor met once a year to review savings and other financial goals, especially since he and his wife were meeting their goals. “When I hit 40, the plan showed that we should have about $188,000 in assets based on our salaries, and we had over $200,000, and boy, did that make us feel good,” he says.

4. Talk about money with your partner.

If you have a spouse or partner, then getting on track together and working out any disputes can prevent conflicts later. “People often comingle finances with their partner, and open communication is key. Make sure you talk about your finances and life goals with your partner, and align on how you will get there together,” de Baca urges.

5. Get comfortable with negotiation.

Nancy L. Anderson, 52, a certified financial planner in Park City, Utah, says while she did a lot of things right in her 30s, including investing 20% of her income, buying a home, investing in rental property, and saving for her child’s college education, she also wished she had negotiated her salary more assertively. “If I’d negotiated a higher salary each time I changed companies in my career, I’d be wealthier today,” she says. Since most people change jobs about 11 times in their careers, negotiating those transitions can end up making you more than $600,000 richer over your career, she adds.

6. Be a good role model.

For those 30-somethings who are already parents, Beth Kobliner, author of “Get a Financial Life” and member of the President’s Advisory Council on Financial Capability for Young Americans, says it’s important to model smart financial choices for the little eyes watching you. “You lose all credibility lecturing your little kids about not needing every new toy or tech gadget if you, behind closed doors, have loud arguments with your spouse about not being able to keep up with your credit card bills,” she says. You don’t have to be a money genius, she adds, but it’s important to talk about money—making financial discussions as commonplace as soccer practice or Sunday dinner.

7. Shore up your cash reserves.

While many experts emphasize long-term investing and retirement savings, Tim Maurer, director of personal finance for the BAM Alliance of independent advisors, says he wishes he had kept more money in pure cash savings to give himself a better buffer for unexpected needs and expenses. “Much, maybe too much, financial planning is focused exclusively on the long, long-term," he says, "and while it’s true that real estate can be a great way to build wealth and one should start saving as early as possible for retirement, it’s the unexpected changes in life that often derail 30-something households. Our financial plans should address the short-term, too.”

Maurer points out that your 30s are often a time of “volcanic change” in your personal and professional life, and having a nicely padded bank account can help smooth over some of those transitions.

Saving May be Tough but Here’s How to Get a Handle on It 

February 24, 2014 Categories: saving tips

Getting on top of your finances can be a real chore. Sure, on paper the idea sounds simple, but in reality, it’s much easier said than done.

There’s a lot to it. By the time you pay down your consumer debt, chip away at student loans, dole out money for the mortgage, what’s left for saving for your kid’s college education, not to mention your own retirement? The list of demands for your savings is long, yet online tools and advice from advisors suggest we can make it work—we just need to rethink our approach, according to FOX Business.

The word “budget” has the same emotional response as the word “diet”, according to financial psychologist Brad Klontz; we see it as denying ourselves of things we want and desire. Then there’s the tug-of-war between the here-and-now and the distant future (should I buy these shoes today or some relatively-unknown reward 30 years down the road?).

Indeed, it is a struggle. While experts recommend saving at least 10% to 15% of income for retirement yearly, a recent survey shows 44% of respondents who haven’t retired are saving 10% or less of their annual income. Another 21% aren’t saving at all.

Not only are we not saving enough, we are living longer, increasing our retirement fund needs. The survey shows 72% of respondents don’t know whether their retirement plan has a lifetime income option. Even Millennials, who take saving seriously especially when it comes to pegging savings with the needs of their current life stage, seem relatively unconcerned about retirement, according to MassMutual’s 2013 State of the American Family study. The 401(k) may be a reality for them, but more than half have not yet figured out how much money they’ll need to retire.

Above all, the MassMutual study says younger generations are more concerned with taking care of their aging parents and scratching their heads about how they will do it.

Good intentions notwithstanding, experts agree the saving vs. spending conundrum is potentially overwhelming. Here are some FOX Business expert tips to get a healthy handle on saving:

Get real. If retirement sounds far away and “a rainy day fund” sounds kind of depressing, it’s time to rename these goals, advises Klontz. For short-term savings objectives, identify what you want to buy, be it a dream vacation to Hawaii or your youngster ensconced at your alma mater. The same extends to retirement. What does retirement look like to you: a house near the ocean, writing the next great novel, or helping kids in Africa? Visualize it. Then put a picture on your fridge so you can see it, Klontz recommends. “Do whatever to get the emotional part of your brain excited.”

Much like when you’re dieting, being specific leads to progress. Saying you’ll start saving Jan. 1 will likely get you nowhere, says Jamie Rosen, founder and CEO of dietbetter. Saying you’ll save $2.00 a week over the next month is likely to get results.

Ravi Dhar, director of the Yale Center for Customer Insights, recommends identifying how much money you want to have socked away at various ages. Sixty-five may be hard to visualize, but intermediate goals targeted to 30, 40, and 50 will shorten your timeframes, making them more measurable.

Get started. The decision to save is based on a cumulative series of prudent choices, says Dhar. “You tell yourself you’ll save tomorrow and tomorrow never comes.” Any one month that you don’t save is not terrible, but a series of those choices over your lifetime has consequences

And, starting early pays off, says Amy Podzius, a financial consultant at TIAA-CREF. While it’s important to save as much as you can, don’t think you have to stash away lots of money to shore up your savings or start investing, says Daniel Keady, a certified financial planner and senior director of financial planning at TIAA-CREF. Little bits work, and online tools and calculators will make the concept more real for you.

Make savings planning a family affair. Leaving a legacy is not just about providing an inheritance to your children. It’s also about passing down values, says Klontz. The money scripts we teach our children can be beneficial or crippling, even when we say we want our children to be well-prepared to manage their finances. Tracy Shaw, an assistant vice president at MassMutual, advises having money conversations as a family and across generations to set spending and saving goals to keep everyone budget conscious.

Put your savings on autopilot. We’re leaving money on the table when we don’t contribute the maximum allowable amount to our retirement plan, says Podzius.

A precommittment to increase your 401(k) contribution by a percentage equivalent to your yearly raise will help you grow your pretax dollars before the money even hits your wallet, adds Dhar. Eliminating temptation is also important and he recommends daily strategies like less mall visits, carrying only a small amount of cash in your wallet or leaving your credit cards at home to reduce spending.

Hold your feet to the fire. When you do spend, ask yourself what else you could have done with the money, suggests Dhar. Making this a practice enables you to track your purchases and better analyze your spending habits.

Commitments also carry more weight when we make them known to others, says Rosen, especially if we tack on a penalty for noncompliance. Bet on yourself. For example, if excessive dining out has burned a hole in your pocket, announce you’ll limit yourself to say, two dinners out a week for the next month. If you fail, tell your friend you’ll pony up $100. “It's all stick and no carrot but it's effective. People hate losing their hard-earned money.”

Go social. Sharing money-saving ideas or picking up tips from pen-pal like social media acquaintances on free sites like Mint.com and Moneyning can keep the process exciting. You might even consider injecting some enjoyable healthy competition, suggests Dhar.

Starting a money-saving competition not only holds you accountable, says Rosen. It also makes you more likely to stick with a savings plan and helps take your mind off your struggles.

401(k) vs. IRA: 5 Key Differences 

January 30, 2014 Categories: saving

For those looking into different ways to start saving for retirement, both 401(k)s and individual retirement arrangements (IRAs) are the most common investment options to explore. The beauty of these retirement savings accounts is that your contributions are made before taxation (therefore tax-deferred until withdrawn during retirement).

While 401(k)s and IRAs serve the same purpose, they have significant differences that can influence which one is right for you. Below are five comparisons outlined by FOXBusiness that can help you determine which one best serves your situation and financial needs.

1. Initiation

401(k): An employer or a sole proprietor of a small business can establish these plans; individuals can't start these on their own. If your employer offers such a plan and you participate in it, your employer will routinely withhold from your earnings and contribute to your account the amount you determine, with limitations (see below), but pre-tax. As far as the work required on your part, it's usually minimal.

IRA: An individual sets this up with a credit union, bank, insurance company, or other financial institution, and then adds money to the account themselves as desired pre-tax, though there are limitations here, too (see below). With an IRA, you're responsible for the account set-up and arranging your contributions.

2. Matching

401(k): Some employers offer to match part or all of what their employees contribute to their accounts. Experts recommend that if your employer provides this, you should take full advantage, as an employer match can greatly increase your retirement account's value. However, annual contribution limits, which the IRS sets each year, exist (maximum pre-tax annual contribution of $17,500 as of 2014). This applies collectively to all 401(k) accounts you might have in a given year. There's also a limit to the combined contribution of the employee and employer.

IRA: Because an IRA isn't employer-sponsored, matching contributions aren't an option.

3. Contribution limits

401(k): The IRS limits contributions to traditional 401(k)s to $17,500 in 2014, though participants aged 50 or older at the end of the calendar year can make catch-up contributions of up to $5,500 above the base restriction. The limit for the combined contribution to these accounts (employer and employee) is either 100% of the employee's compensation or $52,000, whichever is less. The latter number jumps to $57,500 if the participant is eligible for catch-up contributions.

IRA: For 2014, the IRS limits IRA contributions to $5,500-$6,500 if you're 50 or older—or your taxable income for the year. But you should note that some of those contributions may not be tax-deductible, depending on your income or if you or your spouse participates in a workplace-based retirement program, such as a 401(k).

4. Beneficiaries

401(k): According to the terms of the federal Employee Retirement Income Security Act, if you're married, your spouse automatically becomes your 401(k)'s beneficiary upon your death, regardless of whom you listed as the beneficiary. The one exception is if your spouse previously consented, in writing, to your naming someone else the beneficiary. If you are single, upon your death the individual you named on your beneficiary form becomes the beneficiary.

IRA: Whomever you designate as the beneficiary will, in fact, become the beneficiary upon your passing. This designation doesn't require spousal consent.

5. Loans

401(k): You may be able to take out a hardship loan against your 401(k) depending on the plan and if you're still employed by the employer that established it, according to the IRS. Loans must be for less than half of the account balance or, at the most, $50,000. If the plan allows for loans, you generally may take out a five-year loan without penalty—provided you pay it back on time.

IRA: You can't take out a loan against your IRA, but may access money from your account for a 60-day period via a tax-free rollover. In other words, you may withdraw money from your IRA free of taxes and penalties if you return it to the same or a different IRA within 60 days. Should you fail to do so, the withdrawal is subject to income taxes and a 10% penalty if you're under age 59 and a half.

Determining whether a 401(k) or IRA is best for you may feel overwhelming at first, but knowing a bit more about their major differences can help make the process much easier.

New Study Shows Big Banks Equal Bigger Fees 

November 20, 2012 Categories: bank alternatives fees saving

Since Congress largely deregulated consumer checking and savings accounts in the early 80s, the U.S. Public Interest Research Group (US PIRG) has tracked bank deposit account fee changes and documented the banks’ long-term strategy to raise fees, invent new fees and make it harder to avoid fees. A recent study over the last six months, interviewing 250 banks and 116 credit unions in 17 states and the District of Columbia and reviewing bank fees online in these and seven other states resulted in the report “Big Banks, Bigger Fees: A National Survey of Fees and Disclosure Compliance”.

The report examined the following questions:

  • How easy is it for consumers to shop around? Are banks complying with the Truth in Savings Act, which requires disclosure of a schedule of account fees to prospective customers?
  • Can consumers still find free or low-cost checking accounts or has free checking ended?
  • What can the Consumer Financial Protection Bureau (CFPB) and other regulators do to help improve transparency in the financial marketplace?

Key findings included some of the following:

  • Only 48% of bank branches visited provided researchers with fee schedules as required by law on their first request. After two or more requests, eventually a total of 72% complied with the law. More than 1 in 10 (12%) of branches never complied and refused to provide fee information. Another 16% provided only partial information.
  • Researchers found a wide variety of free or low-cost checking options, with 63% of small banks and 60% of credit unions providing totally free checking. Although the biggest banks have recently tightened requirements to obtain totally free checking (available at only 24% of big bank branches), it is still available at more than half of big banks with a regular direct deposit (59%).
  • While more than half of big banks (62%) posted their full fee schedules on the web, versus less than one-third of small banks (29%), finding the fees was often a scavenger hunt. Many banks, especially big banks, placed fees in massive, clunky PDF files. Some banks even hid fee schedule links in footnotes or, worse, in their “site maps,” with no link available from the “compare checking accounts” page or any other pages.

The study also provides a list of key recommendations for both consumers, as well as regulators. Some of the consumer recommendations included the following:

  • Review your bank statements and count your fees. In addition to ATM surcharges, you may be paying your own bank an “off-us” ATM fee that only appears on your statement, whenever you use another owner’s ATM.
  • Examine how many fees you pay. Watch for a la carte fees you can avoid, for example, by only using online check images or statements. Use available text alerts to warn you of low balances that could result in overdrafts. Shop around. Look for better accounts. Bank at a credit union, not at a bank. Credit unions are member-owned, lower-cost alternatives to banks and often offer the same variety of services. It is easier to qualify for membership than most consumers think. Certainly, consider banking at a small bank, not a big bank. Consider moving your money by voting with your feet.

To access the full version of the study please click here. The recommendations might prove helpful to you if you are considering changing your financial institution or are looking for information on the type of fees you are being charged at your current financial institution.

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