Every year between October and November companies begin to notify employees about benefit renewal. During this time you can modify your benefit elections for the upcoming year. Although medical benefits are one of the main elections that many people are concerned about, don’t forget to take advantage of some other benefits your company may offer.
Dependent care accounts (DCAs) allow families who pay for child care to save before tax dollars up to $5,000 per year for dependent care expenses. You can access the account for reimbursements with your receipts and/or pertinent documentation for child care, nursery school, or at-home care for dependents. If you put $5,000 for the year 2012 or $416.67/month into this account it will come out of your paycheck prior to taxes. Therefore, your taxable income is reduced by $5,000 for the year. Not only is it an automatic savings account, but it is advantageous on your tax returns. Be sure to only designate the exact amount you will need because the funds do not roll over to the next year.
Also, check into term life insurance. Group plans are by far the least expensive way to pay for life insurance. You need 8-10 times your income so that the ones you love are financially taken care of when you are gone.
Most importantly, you need to evaluate your medical care. Look back over 2011 and see how much you spent on medical needs. Review the choices available so you spend the least amount of money but get the most benefit for you and your family. I love HSAs because they are savings accounts that grow tax-deferred but you can use the funds on medical expenses. You can keep this account until you turn 65 at which point you can use the money for anything you desire after you pay the taxes!
Take action today! Know your options and make sound decisions concerning your benefit choices. It will pay off in the long run!
The size of your family and your household income are big influences on your grocery spending. Some experts believe that $200/adult and $150/child for the month is reasonable. Personally I believe that is a lot of money especially given that the U.S. average household income is $50,000. I like to give guidelines to people based on percentages of income. For instance, all food for the home including groceries, dining out, school lunches, etc should be between 5-15% of your take home pay. Higher income households will be able to have steak more often if there are also fewer mouths to feed. Lower income households may spend closer to the 15% of their income on food simply because the income is not as high. If you use this rule of thumb and your percentage is higher than 15% you have reason to be concerned because the food category is cutting into other living expenses. But of course you need to eat and you or your children shouldn’t feel deprived when doing so. If you are spending 20% of what you bring home on food each month that is an indication that more income is needed to take care of your size family or you need to do some serious couponing and reduce dining out. If that is the case, you will also feel the squeeze in your budget in other areas like mortgage/rent, transportation, etc.
You can also try several of the following things to reduce the food budget:
1. Shop wholesale markets (Costco and Sam’s) religiously for items you use a lot.
2. www.thegrocerygame.com, www.couponsense.com, www.couponmom.com all match the store’s sale items to the weekly newspaper coupons. If you clip coupons try these sites once and see big savings.
3. Always have a running list of items you need in the home so you don’t go shopping blind and overspend.
4. Plan your meals and write the items you need on your running grocery list. This way you will only buy what is necessary.
5. Reduce dining out or use www.restaurant.com for deals.
Food is necessity but it doesn’t have to cramp your style and take all your discretionary money for the month. With a plan and a purpose you can feed your family on a reasonable amount.