How This Graphic Designer Travels the World on $50K

A recent study found that 74 percent of Americans go into debt in order to travel. I’m not surprised; between the rising costs of airfare, eating out, and extracurricular adventure activities, it’s easy to go over budget.

But what if you could trade your talents for travel around the world without shelling out your savings? That’s part of the strategy Abbey Ley, 33, employs to visit international destinations like Switzerland, Bali, and Australia. A freelance graphic designer, illustrator, and animator, she makes around $50,000 per year, a good chunk of which goes toward taxes, retirement, student loans, and business expenses. A few years ago, Ley started using her talents to afford travel while staying within her strict budget. Here’s what we all can learn from her process. 

Outside: How do you manage your freelance income and your savings?
Ley: I keep an active text document on my computer where I track my monthly bills and review it every few days. I have most of my monthly bills on auto-pay, so I never have to worry about late fees. For larger payments, like my student loans, I mark the withdrawal date in my calendar so I make sure to have enough funds in my account. In that same doc, I keep track of active clients and the amounts of projects affiliated with each one (when the deadline is and when I expect to be paid). To project monthly income, I total those up, but it often fluctuates; sometimes clients will put projects on hold or I’ll receive payments later than expected. Since my income is so inconsistent, I keep an emergency fund in savings, where I accrue 2.2 percent interest as long as my balance is at least $2,000. This is the fund I typically draw from for my travel adventures.

How did you get started on your current career path?
Early on in my career, a few years after moving to New York City, I worked as the art director for Wanderlust, a series of yoga, wellness, and music festivals. The events take place at different mountain resorts across North America, and traveling was an incredible perk of the job for most of the staff. My job designing, though, didn’t require me to work on-site at the events, so I had to get creative to make a case for my travel expenses to be covered. I took on the role of organizing teams of photographers at each event, took lots of photos myself, and helped run our social-media accounts. I didn’t get paid extra for doing this work, but getting to travel made it worth it. These experiences solidified my love for travel, and I realized that working on the go with a laptop thrilled me much more than sitting in an office. A few years later, I saw a listing to intern abroad in Switzerland for three months as a designer, and I jumped at the opportunity. The pay was low, but I saw value in having flights and housing paid for. The hours were full-time, but I took on freelance projects alongside the job in order to fund adventure-filled weekend trips all around Europe.

travel
(Abbey Ley)

What money-saving tricks or tips did you use on your recent trip to Bali and Australia?
I originally planned the two-week trip to Bali because my friend owned a meditation and yoga-retreat center in Bali, and she let me stay there for free in return for branding and graphic-design help. I traveled in late January and February, which is the off-season, so flights were much cheaper than they would be in the summer. I also stayed with a friend in Brisbane, Australia, so that took care of lodging expenses. When I wasn’t hosted, I booked lodging via Airbnb. Homestays in Bali are very affordable in comparison to the U.S., so I was able to stay in a few beautiful places for about $30 per night. Food is also pretty cheap (and delicious) in the country. 

Australia is more expensive, so while staying with my friend in Brisbane, I shopped at the farmers’ market and grocery store and utilized his kitchen to cook meals instead of going out all the time. When I left Brisbane to explore Melbourne and Sydney on my own, I booked my own room in shared Airbnbs (and made some great new friends). I also stayed outside the central business district in areas that were less expensive. One money-saving idea that I decided to do a bit last-minute was to take an overnight train from Melbourne to Sydney, which saved me a night of lodging. Even though I didn’t book a sleeper car, I was still able to get some decent shut-eye.

What tips would you offer someone who wants to figure out how to use their talents to trade for travel?
There are so many careers that can be done remotely and so many opportunities to travel for work. You probably have a skill or two that is worth value to someone else, if you think about it. Figure out what you’d most like to do, and research to find out all you can about it and the location you want to travel to. Reach out to people who are doing or have done what you want to do, and ask them questions. For women, there’s a Facebook group called Girls Love Travel that has been a great resource for me.

Save up in preparation for your trip, especially if you are trading your services or volunteering in exchange for travel. When agreeing to trade or volunteer your time, be realistic about the duration of time you can commit to. If you’re able to take on paid work while trading or volunteering, that will help. If not, look for opportunities that provide something of value to you (travel, housing, or meals).

Is there anything we can do from home to prepare for a long trip?
I always cancel subscriptions I don’t use or can live without. Trim is a great mobile app to help with this. Before I go on vacation, I try to double down on the number of meals I make at home. (I always save a surprising amount of money not going to restaurants.) I try to do this on the road, too.  

Finally, I rent out my Brooklyn apartment on Airbnb while I’m gone, even if it’s just for a couple weeks. For my Bali and Australia trips, I hired a friend who lived in my building to check on the place between guests. It took a good amount of communication and maintenance, but we figured it out in the end, and in addition to the extra income, I liked helping facilitate other people’s travel.

An Echo Press Editorial: Easy ways to save money

As part of Financial Capability Month, the Minnesota Department of Commerce is reminding Minnesotans about basic low-cost measures people can take to reduce energy use, cut utility bills and put more money in their pocket. Here are a few ideas:

• Use a programmable thermostat to reduce your heating and cooling costs.

• Turn off computers and monitors when not in use.

• Plug home electronics, such as TVs and DVD players, into power strips and turn the strips off when equipment is not in use.

• Turn off lights and fans when nobody is in the room.

• Close your fireplace damper when not in use.

• Take short showers and use low-flow showerheads.

• Turn your hot water heater down to 120 degrees F.

• Wash only full loads of dishes and clothes, and air dry both when possible.

• Replace incandescent lights with much more efficient lighting, such as light-emitting diodes (LEDs).

• Look for the Energy Star label when purchasing new appliances, lighting, and electronics.

• Have a home energy assessment to identify ways to make your home more energy efficient (weather-strip doors and windows, seal air leaks, add insulation, and more).

• Go to work via carpool, use public transportation, or telecommute.

The commerce department points out that simple behavior changes such as turning off lights, air drying clothes outdoors and setting your hot water heater at 120 degrees don’t cost you anything. But applied together, they can shrink your utility bills and grow your bank account over time.

Here’s an example: Replace an old energy-hog refrigerator with a new high-efficiency model. The new refrigerator will likely pay for itself in seven or eight years via energy savings, and you will enjoy additional energy savings for the life of your appliance.

Likewise, a properly installed and operated programmable thermostat will pay for itself in as little as one year with energy savings, according to the commerce department.

For more energy-saving tips, check out the Minnesota Department of Commerce Home Energy Guide (.pdf) or the U.S. Department of Energy’s Energy Saver Guide(pdf).

Why You Should Save For Retirement Over Education: Money in 60 Seconds

What should be a bigger priority for me: saving for my children’s education or saving for retirement?

This one hurts me. It hurts me to say this, because I’ve got children, and I really like ’em a lot. It’s gotta be your retirement. I know that doesn’t feel right as a parent, but if you have to make a choice, there are scholarships and there are loans for college. Nobody ever got a scholarship for retirement. And so this is one where you need to strap your oxygen mask on before assisting others, and — as much as it hurts me — to put yourself first.

The stock market’s had a good year so far. Is now a good time to invest?

Yeah! Wow, what a difference. Remember December? I remember sitting, December 24th, when the market was down like 2.4 or 2.5% and it was just like [choking sound]. And it’s up 16% since then. Now it feels like, gosh, maybe this isn’t a good time to invest. But let’s be perfectly clear: You have no idea. And anybody who says they have an idea has no idea. No one knows where the market is going from one week or one year to the next. There are just too many factors into it. So you want to — for those of you who are familiar with the term — dollar-cost average. For those of you who aren’t, you want to invest through up markets and down, a bit out of every paycheck, sometimes it’ll be lower, sometimes it’ll be higher, and then it evens out over time which doesn’t feel sexy, but actually is very sexy. It’s very sexy in order to earn market returns, because most folks don’t.

And go deeper on topics like cybersecurity and artificial intelligence at Microsoft on The Issues.


Cheryle Finley: Make the most out of a grocery budget

When dining out, we know exactly how much money we are paying for a serving of food. By the time we walk away with our receipt, the cost of the meal, tax and any gratuity have been totaled and paid. But how much do we pay for servings we place on our tables at home?

Buy a TV dinner, and you know how much you have invested in dinner. But use several ingredients to create a dish, and the cost is usually far from exact. Some keep very strict grocery budgets so their idea of food expense is much better than those with no actual budget. The entree cost might be an estimated $30 if spent on steak instead of $15 on ground beef.

Even without a grocery budget, most of us are interested in saving money when it comes to food. Buzzfeed.com has some helpful hints to make the most of our grocery money:

• Eat less meat. Use beans as filler in meatloaf and tacos.

• Dried beans vs canned. Dried take more prep time but save money. They also contain less sodium.

• Breakfast for dinner. Break out the eggs for a meatless meal. A dozen eggs go a long way.

• Buy cheaper meats. These can be just as good as more expensive cuts when slow roasted or prepared in your slow cooker.

• Buy a whole chicken. Break down the bird and use in different dishes or freeze separated parts in marinade.

• Invest in a vacuum sealer. Buy in bulk at a lower cost then freeze for later use. Vacuum sealing keeps frozen food fresh longer than freezer bags, and even though they can be a little pricey, they can save money in the long run and your frozen food will be better quality.

• Make big batches. Eat one batch and freeze the other for use on one of those many busy days we all have.

• Save leftover veggies. Keep a big freezer bag at the ready to keep adding that dab of veggies left after a meal for use in soups and stews.

• Grow your own vegetables if possible. You know exactly what you are eating. If a garden is not possible, visit the local farmers markets, buy in season, then can or freeze what you can.

• Check out sales and coupons. Don’t drive all over town to save a quarter but checking ads can save you money and help in planning a weekly menu which is also a money-saver. Shopping on Wednesday could help you take advantage of both last week sales and this week sales.

• Don’t shop hungry. This idea has been around since the beginning of supermarkets. Whether shopping the aisles or the ads, make sure you aren’t needing a food fix.

• Make your own sauces and dressings. Fresh is better. You can season to your own preference.

• Plan your menu for a week at a time. Save time and money scurrying around trying to figure out what’s for dinner. This will help avoid ordering takeout more than usual. Sale ads are invaluable in menu planning.

• Have a leftover night. Once a week, plan dinner around leftovers in the fridge.

Buying groceries is one of those times when the saying “watch your pennies and the dollars will take care of themselves” can serve us well. A little planning and prep really can make a difference.

A good start to being thrifty is homemade salad dressing. Make fresh to go with your fresh fixings. Make it your own. Maybe you like more garlic or less vinegar. Plan tacos for dinner and make a double batch of taco meat for pinwheels the next day. These are great for quick dipping as well as appetizers. These recipes are from “Taste of Home.” If last night was rotisserie chicken, tonight the leftovers can be the quick stove-top casserole. Simple and delicious from “Rotisserie Chicken to the Rescue.”

Have a wonderful week, and happy eating.

Honey mustard dressing

1/3 cup honey

1/4 cup Dijon mustard

1/4 cup cider vinegar

2 tablespoons lemon juice

1 garlic clove, minced

1 cup vegetable oil

Combine first five ingredients in blender. Gradually add oil in steady stream while processing until smooth and creamy. Store in refrigerator. Yields 2 cups.

Taco pinwheels

4 ounces cream cheese, softened

3/4 cup seasoned taco meat

1/4 cup finely shredded cheese

1/4 cup salsa

2 tablespoons mayonnaise

2 tablespoons each chopped ripe olives and finely chopped onion

5 (7-inch) flour tortillas

1/2 cup shredded lettuce

Beat cream cheese in small mixing bowl. Stir in all except tortillas and lettuce. Spread over tortillas: Sprinkle with lettuce and roll up tightly. Wrap in plastic wrap and chill at least 1 hour. Unwrap and cut into 1-inch pieces. Serve with additional salsa. Yields 3 dozen.

Homestyle chicken noodle casserole

1 teaspoon garlic powder

1 teaspoon onion powder

1/2 teaspoon paprika

1/2 teaspoon each salt and pepper

4 cups wide dry egg noodles

1 tablespoon butter

1 celery rib, cut into 1/4-inch pieces

1 can cream of celery soup

1 cup milk

2 cups bite-size chunks rotisserie chicken

1 cup frozen peas and carrots

1 (8-ounce) container sour cream

Prepare noodles according to package directions. Drain, rinse with hot water, drain well, return to pot and cover to keep warm. Mix together spices and set aside. Melt butter over medium heat in 3-quart saucepan. A celery and cook, stirring occasionally, until it begins to soften, about 4 minutes. Add soup, milk and spice blend. Stir well and bring to a boil, stirring frequently. Add chicken and veggies; stir well. Bring to a simmer and turn heat to low. Simmer, covered, for 10 minutes, stirring occasionally. Stir in noodles and sour cream. Heat through, about 3 minutes, stirring frequently. Do not boil. Serve immediately. Yields 4 to 6 servings.

Address correspondence to Cheryle Finley, c/o The Joplin Globe, P.O. Box 7, Joplin, MO 64802.

Half the public thinks subscription boxes will save them time, but cost more money

Additional data shows that only around one in five US adults have tried them

While major media outlets, from USA Today to The Today Show, Harper’s Bazaar to Esquire, continue to compile their own lists of subscription boxes, recent data from YouGov RealTime shows that the majority of American consumers have never tried them.

For instance, 80% of US consumers ages 18+ say they’ve never subscribed to a service that regularly delivers health and hygiene products, such as razors or shampoo, to their home. A similar number of people say the same about companies that provide beauty and cosmetic products (80%), as well as groceries and meal kits (81%). When it comes to delivering household goods, such as paper towels and laundry detergent, 85% of shoppers say they’ve never subscribed to such a service.

That said, younger adult consumers appear more open to the idea of subscription boxes than the general public. Nearly half (47%) of US consumers ages 18-34 say they’re either very likely or somewhat likely to consider subscribing to at least one of the four aforementioned types of services. For all US adults, that percentage of interest stands at 33%.

Overall, the top perceived potential benefit of subscription boxes is that they save consumers time from shopping (48% of US adults think this). Other advantages US adults see in these services is that they’ll never run out of a product they need (39%) and that they don’t have to remember to manually buy the products themselves (33%).

For the most part, younger consumers are aligned with the general public on the potential benefits of subscription boxes. US consumers ages 18-34, however, are slightly more likely than the average American adult to think subscription boxes are good for simplifying their budget (26% vs. 18%), saving money by subscribing in bulk (36% vs. 29%), and providing an ability to try new products they wouldn’t otherwise (26% vs. 20%).

As for the potential drawbacks, 53% of shoppers worry it would ultimately cost more money to have a subscription box than not, while 52% show concern that they may not use the products quickly enough and end up with more than they need.

Much like the potential benefits, younger consumers are mostly in agreement with the general public about the potential disadvantages of subscription boxes. The greatest divide occurs over the question of using the products quickly enough: 42% of shoppers ages 18-34 say they consider it a potential drawback, compared to 52% of the general public.

Photo: Getty

Learn more about YouGov RealTime research

5 Money-Saving Hacks To Increase Your Home Value

Trying to improve the value of your home can seem like a daunting task. Determining not only how many improvements needs to be done, but what you actually can afford is difficult for a first-time renovator. On top of that, how will you know what changes have the biggest impact on home value?

Binging every episode of “Property Brothers” and scoping out your local Home Goods isn’t going to give you all the insight you need for this project. However, there are many small and inexpensive steps you can take to increase the value of your home.

Below, we detail five easily accessible hacks to home improvements that make the largest impact on the value of your property.

1. Consult An Interior Designer

Whether your budget allows for an interior designer or not, consulting one through a preliminary assessment can be of great benefit. These appointments typically run about $200-$300, according to Home Advisor, and can give you design ideas you may have missed from your own research.

The designer will get a better feel for what your home needs by physically being there. You also can ask specific questions based on your home’s design.

2. Utilize Neutral Colors

Neutral colors are great if you’re looking to put your house on the market soon. When potential buyers visit, it’s easier for them to visualize the living space as theirs if the colors fall in a more neutral color scheme. These colors both enlarge your space and allow the imagination to run freely with what the room could be, says Open Door. Neutrals are cool, classic and inviting.

If your home is a bit older and suffering from the all-blue color fad of the 1970s, it might be off-putting to potential buyers. Not only do they have to redecorate the entire room, but it’s hard for them to see the potential in what it could be.

3. Think About Curb Appeal

Only caring about what’s on the inside is a great mantra for finding your soulmate, but not increasing the value of your home. If you want to make home improvements that count, you’re going to have to think about the curb appeal of your property.

According to USA Today, there are small, yet effective, changes you can make include to your home’s exterior. These include replacing patchy grass, planting a new tree and adding green shrubbery that doesn’t take much maintenance to keep up.

Some experts recommend taking a photograph of your house, changing the composition to black and white and then inspecting your home. By doing this, you’ll be able to see any clear cracks or dents that need to be fixed in terms of outer cosmetic work.

4. Maximize Your Space

Design the layout of each room to make the most of the space you have. If there is any clutter, look into shelving units or designating a space for items that typically lay around.

Get rid of any clunky furniture or heavy curtains that take up too much space or limit the amount of light coming into the room. Cover your windows with thin shades or curtains that easily let light in and can be adjusted. Look into installing wall mirrors or a large floor mirror to give the illusion of a bigger room, says HGTV.

5. Focus On The Bathroom And Kitchen

If you’re strapped for cash and, after figuring out your budget only have the ability to focus on a room or two, your best bet is the bathroom and/or kitchen. These focal points of the house are very important for potential buyers as they’re areas that need to be functional and personalizable, according to Forbes.

Do your best to make renovations focus on a neutral color scheme and fixing anything that doesn’t work in these spaces. You can replace faucets, pipes, stovetops, flooring, appliances, countertops and lighting for changes that are cosmetic, practical and attractive to buyers.

7 Money-Saving Tips that Can Steer You Wrong

Online media are full of hacks for saving money, but do they really work? Naturally, some are more effective than others, but the real danger is in those that may actually become bad money habits.

Money saving tips to avoid

Here are some seven things people do to save money, but might actually cost them more in the long run:

1. Succumb to credit-card rewards

Credit cards market their rewards because it emphasizes what they give back to the customer not what they can cost. If you are someone who routinely carries a credit-card balance — even if only for a few months after holiday shopping — you should focus more on interest rate than on rewards. After all, rewards are a one-time, low-percentage rebate on what you spend; interest is an ongoing high-percentage expense on everything you owe.

Bottom line: If you are in the habit of carrying a credit-card balance, the best money-saving advice is to focus on getting the lowest interest you can rather than on credit-card rewards. Better yet, build your savings account balance and make important purchases in cash.

2. Spend to maximize credit-card rewards

Some websites love first-person stories with money-saving tips like “how I financed our honeymoon with credit-card rewards.” That might sound savvy until you consider the sheer amount of spending required to rack up that amount of reward credit. Chasing rewards can turn into a bad money habit.

Earning rewards for spending you were going to do anyway is worthwhile; but if your spending starts to be driven by the idea of earning rewards, this may be costing rather than saving you money.

3. Minimize tax withholding to access money sooner

This is the kind of clever money-saving advice that sounds good in theory but probably doesn’t work for most people in practice. The idea is that getting a tax refund is just a sign that you were paying the government too much to begin with. Imagine instead if you were able to get your hands on that money throughout the year leading up to tax time, earning interest on it in a money market account as it comes in.

For minimizing tax withholding to work in your favor, you need two things most people don’t have: a good enough handle on your tax situation to correctly gauge the exact withholding level for your needs, and the discipline to funnel the extra money in your paycheck into savings. For most people, a few extra dollars in each paycheck can quickly get absorbed into their spending habits and not be saved. In that case, it is more effective to get one refund check at the end of the tax year which can be added to savings as a single deposit or invested in a certificate of deposit (CD).

4. Let sales drive buying behavior

“I couldn’t resist. It was such a good bargain.” How often have you heard someone come home with something purchased on sale saying something like that?

When it comes to things you were going to buy anyway, looking for sales is money-saving behavior. However, if a sale prompts you to buy something you weren’t otherwise going to, it is extra spending, not saving.

5. Obsess about Black Friday/Cyber Monday

The above observation about sales applies especially to Black Friday/Cyber Monday. While there may be some good deals to be found on those two peak shopping days, they also apply the age-old sales technique of creating a sense of urgency by setting arbitrary deadlines. That often leads frenzied shoppers to buy more than they otherwise would.

Play it cool. Know in advance what you plan to buy and, if you find a great deal on Black Friday or Cyber Monday, buy it then by all means. However, filter out things you didn’t plan on buying, and if you don’t find a particularly good deal on what you planned to buy, don’t panic. Traditional and online retailers should have plenty of other sales in the weeks ahead.

6. Buy bargain brands to save money

This requires some judgment as to quality and some trial-and-error experience. From everyday disposable items like cleaning supplies to longer-term purchases like clothing and furniture, quality can matter a great deal. Buying cheap is only the illusion of saving if it results in having to replace things much more often than if you had opted for a more-expensive-but-much-longer-lasting alternative.

7. Shop for a high-interest checking account

It is a great idea to look for high-interest savings accounts or CDs; but when it comes to checking accounts, interest should be a secondary consideration to fees.

Why? According to the MoneyRates.com Checking Account Fee Survey, the average monthly checking account fee is now $13.58, which comes to $162.96 a year. Even if you could find an interest rate of 1 percent (which is pretty rare for a checking account these days), it would take an average balance of $16,296 to earn enough interest over the course of a year just to break even with the fees you are paying. The better move is to look for one of the minority of checking accounts that has no monthly fee. Only if you are trying to choose between two or more such free checking accounts should you make the interest rate a consideration.

Money saving advice has its place

There can be merit in popular money-saving tips, but only if you apply them with common sense and focus on the big picture. Don’t let money-saving advice control what you spend, just let it inform how you spend it.

How to save money in your 40s

Family making a smoothie

Westend61/Getty Images

By the time you turn 40, the pace of your life is a lot different from what it was when you were fresh out of college or still figuring things out in your 30s.

Your biggest concerns probably revolve around striking the right balance between multiple priorities: being a good parent and partner, staying on top of tasks at work and chores at home, keeping a close eye on your aging parents and preparing for a (hopefully) not-so-distant retirement.

Let’s face it — your plate is full. And while your salary may be higher than it’s ever been in the past, saving money isn’t getting any easier.

Increasing your savings may require some hard work on your part. But with a sound strategy in mind, it can be done. Here’s what to do if you need help saving money in your 40s.

1. Pay off high-interest debt

Saving money can be difficult when a large percentage of your take-home pay goes toward bill payments. Money you could be setting aside for the future is instead needed to cover credit card payments and pay off a house and car. For borrowers in this situation, it’s best to focus on paying off high-interest debt, says Stuart Chamberlin, president and founder of Chamberlin Financial.

Chamberlin recommends targeting bad debt — like credit card debt — first. Unlike good debt (such as debt from the purchase of a home), bad debt costs you money without generating any increasing value in the future. Use a calculator and come up with a plan that will allow you to knock out your debt quickly. Make sure your plan involves making more than just the minimum monthly credit card payment.

“Once you get rid of the bad debt and set up a budget, then you can afford to set a certain amount of money aside each month,” Chamberlin says.

2. Set priorities

Once you knock out your high-interest debt, you’ll have to decide which financial tasks to tackle next. Should you work on growing your kid’s college fund before buying a new house? Should you focus on investing before growing your emergency fund (hint: no).

Everything can’t be done at once, so prioritize and determine what’s more important. Just make sure you’re making smart choices. Paying off your house before saving for retirement, for example, may not be the best idea.

“Accelerating home mortgage payments in lieu of saving into a retirement account is one of the biggest mistakes Americans in their 40s continually make,” says John Hagensen, founder and managing director of Keystone Wealth Partners. “Compound rates of return inside of retirement accounts can be used for income, travel and other living expenses once retired and trump an illiquid pot of money sitting inside the Sheetrock of your home.”

3. Max out employer-sponsored retirement accounts

Not everyone has access to a retirement plan at work. But if you have one, make an effort to work toward maxing out your account.

For 2019, the most you can contribute to a 401(k) and similar employer-sponsored retirement plans is $19,000, which is slightly higher than the limit set in previous years. Individual retirement account holders can contribute up to $6,000.

You’re likely earning more money than you did in your 20s and 30s. But earning more money doesn’t mean you should be spending more money.

“It’s tempting to spend that extra money, upgrade (your) lifestyle, but it’s a critical time to save for retirement,” Hagensen says. “(You) still have a long runway until retirement, allowing compound interest to work to your advantage, but often earning salary amounts that allow for sizable savings contributions.”

Unless you work for the government, you probably won’t have access to a retirement plan funded by your employer. That means it’s up to you to ensure that you’re putting away enough money for retirement and considering the kinds of costs you could end up with, like expensive medical bills.

“In the U.S., we have become nearly a ‘pensionless’ society,” says Andrew McNair, president of SWAN Capital, an independent financial services firm in Pensacola, Florida. “Therefore, the burden of retirement is on your shoulders. We must choose to save now or work late into our 70s.”

4. Start saving for your children’s college education

In addition to saving and preparing for retirement, it’s best to start saving for your children’s future. There’s no guarantee that your kids will actually go to college. But with college costs and student debt on the rise, it pays to begin saving years before your child graduates from high school.

There are multiple ways to save for college. One popular vehicle is the 529 plan, which is available in some form in every U.S. state. The benefits and downsides of investing in 529 plans ultimately depend on where you live and the kind of plan you choose. Earnings grow tax-free and withdrawals may be tax-free, too, if you use the funds to pay for education expenses. In certain states, you may qualify for a state income tax deduction. Coverdell ESAs are another option, but your annual contributions per student are limited to $2,000.

Your choices don’t end there. A Roth IRA is worth considering because you can technically withdraw your contributions penalty-free if the money is used to cover higher education expenses. Some experts even recommend using the cash value of a life insurance policy to cover college expenses and potentially maximize the amount of student aid a student can receive.

“Let’s say you’re qualifying for student aid. Life insurance does not go on the financial disclosure document when qualifying for financial aid, unlike a 529 plan, which could hinder a child based off of the asset side of the balance sheet of the parent to have the ability to qualify for various aid,” says Andrew Whalen, CEO of Whalen Financial.

5. Consider flexible spending accounts

A flexible spending account is another benefit offered by employers. Not to be confused with health savings accounts (HSAs), flexible spending accounts (FSAs) allow employees to put away money in advance for certain expenses.

Contributions to FSAs are made through payroll deductions, and a portion of the money you agree to set aside for the year is taken out of every paycheck before it hits your checking account. These contributions are considered pretax dollars and reduce the amount of income subject to taxation.

For 2019, you can contribute up to $2,700 for health care expenses including:

  • Medical services, treatments and supplies.
  • Over-the-counter drugs and medications.
  • Vision expenses such as glasses and contacts.
  • Dental expenses.

Families may consider a dependent care FSA and cover the cost of child care and after-school programs using pretax dollars. The contribution limit for 2019 is $2,500.

FSAs can be beneficial for savers with a big tax bite. But there are some things to keep in mind before signing up. Some unused dollars could be rolled over into the next year. A grace period could apply, giving you more time to use the rest of your funds. Otherwise, you’ll lose access to the unused dollars you contributed.

Learn more:

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Committee hopes to conduct efficiency audit | Narragansett Times

SOUTH KINGSTOWN – While the school committee struggles to make cuts before putting a gavel down on its final budget approval next month, some members are already thinking ahead to next year’s budget building process. 

Several members of the school committee became interested in pursuing a district-wide efficiency audit after hearing Eric Schnurer speak at the National School Boards Association conference last month. They became so interested that they asked him to make the trip from Pennsylvania last week to discuss the possibility at their April 9 meeting. Schnurer, the president of Public Works LLC, has built a career out of helping municipalities and school districts from across the country find savings in their budgets.

The secret to saving money doesn’t come from looking at a budget, however, according to Schnurer. The real savings come from providing the services a district already offers more efficiently. 

“Cutting very rarely is how you’re going to bring a budget under control,” Schnerer said. “Looking at how you can do what you do more efficiently and do it better. That’s a way you can make lasting savings that amount to appreciable amounts of money without cutting the things that people care about.”

Since opening his consulting firm in 1995, many of the municipalities and school committee’s he worked with had been doubtful at first. 

“Basically everywhere we go, because budgest have been tight everywhere at every level of government, from school districts right on up to the federal government, since the last recession, everywhere you go, people say, ‘Yeah, we’ve already done everything we can do to cut the budget,’” Schnurer said. “They’d say ‘There’s nothing else we can do to save money because we’ve cut everything that can be cut.’”

“Our conclusion, after doing this for a long time, is that the best way to save money isn’t by cutting things,” he continued. “If your state wants to save money, I can tell you how to save most of the state budget right now. You shut down all the schools, you close the prisons and let everybody go free and cut off the Medicaid program. That would save huge amounts of money overnight. The problem is that down the road, you would have huge expenses. It’s not a very smart way to save money.”

Instead, Schnurer and his team work with teachers, parents, school administrators and members of the community to find out where to create better efficiencies. Although there are already subcommittees that work to find better efficiencies, like the transportation subcommittee that tries to bring down the districts’ $4.1 million transportation budget, school committee member Emily Cummiskey said she’s hopeful Schnurer or another consulting firm can bring in a new lens and perspective for tackling issues.

On Wednesday, the school department posted a request for proposal in the Providence Journal and on its website in order to pursue such an audit. 

Although Schnurer may not be selected if another applicant can deliver similar services for less, he has already taken a look at the school district budget.

“It’s hard looking at that budget saying, ‘what can we possibly cut?’ We’re not going to cut off water,” Schnurer said. “And we’re not going to cut off all of the teachers. So where do you find the savings?”

“Generally, the places you find savings in every unit of the public sector is not in the budget,” Schnurer continued. “Basically, if it was budgeted, you’ve probably already figured out how to save money on it. It’s the stuff that you’re not budgeting.”

School departments have the highest percentage of funds for actual delivery of services, compared to other municipal services. Three-quarters of the district’s money is actually going into the classroom so it can be very difficult to find savings in the schools, Schnurer said. 

By coming in and talking with people, Schnurer and his team are able to find better processes.

“The whole point of the process is to talk to as many people as possible,” he said. “This isn’t about know-it-all consultants coming in, although I’d like to think we knew something about these operations we’ve done all over the country. But it’s really important when you’re doing a process like this to talk to everybody who’s involved–from the janitors and the coaches and the teacher, to everyone at this table, to everyone out in the audience.”

One of the best examples of finding savings and cuts no one would miss comes out of Texas, a few decades ago when the state was facing a billion-dollar deficit. The Texas Performance Review asked all state employees what kinds of ideas they had for saving funds, but they also opened up a public phone line to let anyone call in with their ideas.

In every state building, on every state floor, there is a Coke machine in the shape of a bottle, according to Schnurer. Each “bottle” is illuminated by a tiny light bulb.

“There are hundreds of thousands of little light bulbs that are consuming electricity every day, for no purpose other than making the Coke bottle look really juicy and get people to buy more Coke,” Schnurer said. “This one citizen called in and suggested just unscrewing the lightbulb, it’ll save electricity. It sounds like a really small thing, and it is a small thing, but that small thing saved the wastage of hundreds of thousands of dollars. There’s no budget for how much it will cost to light up Coke bottles.”

Although it isn’t always as simple as just unscrewing a light bulb, Schnurer said there are many ways and approaches his team can take to save the school district money that will be realized every year. He believes he can help the district realize $2 million in savings. 

In West Virginia, Schnurer and his team were able to save the state government $4 million a year, out of a $2 billion budget, just on road salt. By talking with employees and realizing the state was using too much salt on the roads, and then simply recalibrating all of the salt spreaders to dispense less salt, the state realized savings in annual operating costs they never could have found by just looking over a spreadsheet.

“These are savings that recur year, after year, after year,” Schnurer said. “It’s not a budget gimmick, and then next year you’re looking to fill that hole. It’s things you can do that make the operations more efficient and saves money year after year after year.”

The consulting firm looks at everything from bus routing software to how schools operate their lunch line, to the delivery of professional development or the delivery of supplies. Everything is looked at comprehensively and with a fine toothpick comb, according to Schnurer. 

“These are things nobody will miss,” he said. “This isn’t throwing out programs that people care about, this isn’t taking away the SMILE Program and it’s not about laying off teachers. This is about how we can illuminate things like the lit-up Coke display or the salt spreaders, and other things we’re doing inefficiently.”

Although Schnurer has never been unable to deliver on his promises, the district will not pay if the consulting firm is unable to find savings. For the possible efficiencies his team does find, there must also be a consensus from everyone that the solutions are going to work. 

If Public Works is selected to run the audit, the process will likely take about six months. Ideally, the audit would get underway before the end of this current school year, Schnurer said, in order to help realize some immediate savings for the beginning of this coming school year. 

School Committee Chair Stephanie Canter is hopeful an efficiency audit could “give the school committee and the town council what they’ve been asking for so many years–a more holistic, long-term view of operational efficiency.” Cummiskey is also excited about the idea. 

“I don’t really think we can afford not to try it,” she said. “It’s something different that hasn’t been done. I think a lot of people in the community have a lot of ideas about how we can save money.”

alewis@ricentral.com

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