Give Yourself a Raise?

From MSU Extension


Most people would give themselves a raise if they could. Yet, some Montanans are missing the opportunity to do just that. More than 60 percent of American workers have access to an employer-based retirement plan, but those who don’t take advantage of it are leaving money on the table, according to Joel Schumacher, associate specialist with Montana State University Extension.
Schumacher said there are several ways workers can increase their income by participating. Many plans are defined contribution plans which typically have a formula that determines the matching contribution an employee is entitled to receive from his or her employer. For example, a company may contribute $1 for every $2 the employee contributes. The formula may limit the matching contribution to a percentage of the employee’s salary, such as the first six percent. In this case, a person who contributed six percent of his or her salary receives an additional three percent for the same work. For someone making $35,000 per year, this is worth more than $1,000.
Contributing to a retirement plan also lets the employee take advantage of tax benefits. Contributions to defined contribution plans are a pretax deduction. According to Schumacher, an employee earning $3,000 per month who does not contribute to the retirement plan will take home approximately $2,290 (total deductions vary depending on tax withholding status, tax brackets and other factors.) If this same employee contributed $150 (five percent) to the defined contribution retirement plan, the take home pay would be reduced by $115. The payroll tax savings would be $35. If the employer also matched 50 percent of the contribution, the employee would receive $225 in the retirement plan, at a personal cost of $115. This amounts to an additional $1,320 annually.
Schumacher recommends that employees who are not certain of the benefit package offered by their employer should first talk to the employer’s payroll or human resources office for guidance. Understanding and maximizing employer benefit packages may be the easiest way to get a raise, he said.
MSU Extension offers consumer economics education throughout the year.

Montana $aves $cavenger Hunt

I wanted to share the information below about a great opportunity to engage young people in learning about financial fitness.  Last year, we had several area students who completed the scavenger hunt and won the drawing for $100.  For more details, keep reading ...


Montana State University Extension is offering two Montana $aves $cavenger Hunts as a part of the America Saves program during 2014-2015.  The hunts are specifically designed for two age groups:  11-14 and 15-19.  Students will learn about the benefits saving and investing, how credit can be a friend for foe, and how to be in control of their money.

Students who complete the Montana $aves $cavenger Hunt are eligible for a drawing for one of 33 cash awards of $100 in each age group during America Saves week February 23-27, 2015. The 66 cash awards for Montana students are courtesy of generous sponsors.

The Montana $aves $cavenger Hunt can be used by teachers who want to incorporate learning about finances into their classes in family and consumer sciences, economics, math, or social studies.  The $cavenger Hunt could also be utilized as an extra credit opportunity for students to complete “after hours” at home or the local library.

Students have until February 20, 2015 to complete the 9 quizzes for the Montana $aves $cavenger Hunt.  The hunts do not have to be completed all at one time.

The Montana Saves Website has links to all the Montana $aves $cavenger Hunt materials:
Invitation to Students, Posters for each age group, and a list of websites for all quizzes.  Teachers whose students participated last year indicated a list of the websites for the school Computer Technician would be helpful.  You can print out the list or refer your Computer Technician to the site. www.montanasaves.org/

You are invited to review the Hunts to gain a better understanding of how this educational tool would be of benefit to youth.

The website for ages 11–14 (as of September 1, 2014). www.msuextension.org/montanasavesscavengerhunt1
The website for ages is 15–19 (as of September 1, 2014). www.msuextension.org/montanasavesscavengerhunt2

Please contact Marsha Goetting, MSU Extension, at goetting@montana.edu with questions.

A Goal Well Set ...

Abraham Lincoln is credited with saying, “A goal properly set is halfway reached.”  America Saves Week is February 24-March 1.  This month is a great time to properly set a goal for your personal or family savings.  Now is the time to take action and put into practice the theme of America Saves Week:  Set a Goal. Make a Plan. Save Automatically.  One easy way to get started is to log onto www.americasavesweek.org and pledge a savings goal.  Those with a savings plan are twice as likely to save for emergencies and retirement as those without a plan. When you take the pledge you can also choose to receive text message tips and reminders to help you save for your goal.

As I’ve studied different personal financial management strategies, one of the tips I’ve run across is to do something each day related to your personal finance.  In essence, keep it on your mind and keep the goal in front of you.  I signed up at America Saves and have been receiving email and text reminders, which help keep my goals in front of me.  It is easy to get sidetracked in today’s world that is always marketing some new product, service, or opportunity.  It is nice to receive reminders that keep me on track for limiting my expenses, thereby allowing me to save some money.  Even if you can only save a modest amount of $10 or so, it is developing the habit that is important.  Many of us, even on a very limited budget, can find ways to live more frugally and find a little bit of money to set aside to start reaching goals.

Last weekend as I worked on preparing our taxes, I checked our average monthly spending in several categories.  I’m convinced that we could probably “tighten the belt” in a few areas.  Actually, one of the expenses categories that surprised me was food.  I suppose we could literally tighten our belts if we bought and ate less food!

Speaking of taxes, here are a few ideas from John Gower and the America Saves website: Each year, about 75% of Americans who file tax returns receive a refund. According to the National Foundation for Credit Counseling (NFCC), more than half of those receiving refunds (58%) intentionally plan it that way. So if you are a member of the group that’s been giving Uncle Sam an interest-free loan every year, what are you going to do with that money? Spend it? The average refund is about $3,000. That’s a serious chunk of change that would be better put to use in other ways. Here are a few ways to spend your tax refund that will improve your personal finances far more than a new purchase.

Pay off credit card or other consumer debt. If you cannot pay it all off, making a substantial payment will still lower your future monthly payments considerably. If you have more than one credit card to pay, pay the one with the highest interest rate first. Or, if your credit cards are under control, plunk down a big payment on your car or your mortgage.

Build up an emergency fund. Experts recommend setting aside at minimum enough to live on for six months, or a year if you have a family. This is money that should be kept accessible, so you can tap into it if you have unanticipated big expenses for home repair, medical care, or you find yourself suddenly unemployed.  (I think that people who are barely making ends meet find it discouraging to think of putting away six-twelve months of income; but remember what I said earlier – even $10 a month is a habit worth working toward.  Eventually, you may be able to save more, especially if you start by putting your tax refund away each year into an emergency fund.  It may not be as fun as a new big screen TV, but when the furnace breaks down, you’ll be glad you did it.)

Fund your retirement.  Start or add to your IRA or 401(k). IRAs and 401k plans are opportunities to put aside money now for retirement purposes. Since these plans are tax-advantaged, they are even more valuable than a typical savings or investment account. So if you’ve been avoiding retirement contributions lately, or have not even started a retirement plan yet, you could use your tax refund to turn that around in 2014.

  Remember, a goal well set is half way met!

http://americasaves.org/

http://www.montanasaves.org/

https://www.saveyourrefund.com/home/