Archive for January 2017

Why You Should Use a Health Savings Account

health savings account

health savings accountAs we begin to think about the upcoming tax deadline, we also start to think about ways we can save money and especially ways to take advantage of?tax exemptions.

One thing you might not be taking full advantage of are tax exemptions and other opportunities to save on health care expenses.

Health care is a pricey, but necessary expense. Health insurance premiums, deductibles, co-pays, appointments, medicine, you name it, it all adds up.

One way to potentially save on healthcare and get some tax savings is by opening a health savings account. Here are some advantage of having a health savings account.

It’s Basically Tax-free

Money to fund a health savings account is taken out of your paycheck before taxes. When the money is removed from the account for medical purposes, it cannot be taxed. Even if you contribute money to it after your take-home pay, those contributions can be deducted from the gross income on your?tax return. The bottom line is that using a health savings account means paying less tax.

It?s Your Money

A health savings account stays with you and is made up of your own monetary contributions. Your employer can contribute to it, and some employers do, but they do not own it. If you leave the company you take your health savings account with you.

There is no use it or lose it mentality like there is with a Flexible Spending Account (FSA). If you don?t use all of the money in a health savings?account for the year, it rolls over to the next year. Depending on the type of savings account it may even generate interest, which is another benefit for you.

Non-Taxable Withdrawals

If you remove money from your health savings account to pay for a medical bill, the money is not taxable. You can withdraw funds from your account for things other than medical expenses, but if you are under 65 years old and withdraw money for non-medical purposes, you are charged a 20 percent tax fee. If you are older than 65 you can withdraw it penalty free. Because of the fee, it?s best not to withdraw money from this account for non-medical purposes.

Family Benefits

The money in your health savings account can also be used toward expenses for your spouse, children and dependents. This account is available for your use and for the use of your family. If you child needs medicine, you can take money out of your health savings account and use it.

A health savings account helps with budgeting for medical expenses. It’s in a separate account instead of included in a lump sum with money for other things in your monthly budget. This makes it easy to save up for costly medical procedures you may not need right away, or to have as a medical emergency fund of sorts.

Keep in mind, using a health savings account only works with a high-deductible health plan. You also have to pay your full deductible out-of-pocket before you can take money out of your health savings account for a bill. Health savings accounts can save you money and lessen your taxes. But make sure you know if it’s the right choice for you. A high deductible insurance plan may not be a good idea for your family’s financial or medical situation.


Do you use a health savings account? What are other benefits?


Photo courtesy of: Day Donaldson

4 Ways to Get Back on Track After Holiday Overspending

4 Ways to Get Back on Track After Holiday Overspending

4 Ways to Get Back on Track After Holiday OverspendingThe holidays have come and gone and January is finally here.

Unfortunately, with January often comes a bit of a reality check from a budget perspective.

You might find that you?spent a bit too much during the holiday season, and that fact will be reflected in your bank and credit card statements. So, is there anything you can do to get back on track after holiday overspending?

Yes! Follow these 4 tips below to get back on track after holiday overspending?as quickly as possible.

Dine in for the Month

You probably ate out at restaurants a bit more often during November and December than you would normally, so back off of that habit to save some money during the first few weeks of the new year.?Commit yourself to making dinner at home each night during January, and even continue that trend into February if you find that you are saving more money than expected. You can also save on grocery bills by using some of your preserved foods from summer and fall.

In addition to financial savings, this tip could do your waistline some good as well, which might be helpful after a holiday season that can feature some added indulgence in the sweet treats.

Spend Extra Time at Work

If you have a job that allows you to work extra hours from time to time in order to boost your income, consider working overtime during January in order to get back on the right financial track. Set a goal for yourself in terms of extra earnings and make sure you put in enough hours to hit that mark.

Once you get back on budget successfully, you can return to your normal work levels (unless you want to keep working overtime and making extra money, of course).

Use Your New Toys

One of the common causes of overspending is simple boredom ? when looking for something to do, many people turn to shopping. However, after the holidays, you shouldn?t need to go to the stores for new purchases, since you probably picked up a fair amount of new stuff in the form of gifts. Whatever those gifts happened to be, make an effort to use them actively during the first weeks of the new year.

In addition to having fun with your new items and activities, you can also effectively distract yourself from falling back into the trap of shopping for new toys out of boredom.

Get Back to the Budget

Sometimes, all you need to do in order to restore order to your financial life is to get back to basics. Renew your focus on sticking to your monthly budget, and avoid making any unnecessary purchases. Unless you went way over and above your budget during the holidays, you probably don?t need to do anything too drastic in January and February to recover.

Do a good job of getting back to your budget as quickly as possible and you should be able to smooth out any damage that was done over the holiday season. Here?s to a successful new year full of smart financial decisions!


Did you fall for holiday overspending? What are you going to do to get back on track with your finances?


Photo courtesy of: Kyle May

5 Easy Ideas to Keep You Cozy Without Turning Up the Heat

Keep Cozy Without Turning Up the Heat

Keep Cozy Without Turning Up the HeatWith polar vortexes moving through the plains and snow falling down, it?s that time of year. Winter is here!

Over the past few years, I’ve find myself hating the bitter winter more and more. Not only does the cold keep me from wanting to spend time outside, but it also increases my utility bills significantly. Up goes the thermostat along with your energy bill.

On especially cold nights and depending on the size of your residence, your heating bill can nearly double! This is not good news for your budget. Luckily, there are a few things you can do keep cozy without having to nudge up the temperature on your thermostat. Here are five ways to keep warm without turning up the heat.

Get an Electric Space Heater

Now you may be thinking that this would increase your energy bill too. It can increase your bill somewhat, but if you play it smart it can actually save you money vs. running the furnace to heat your whole house.

For example, if you keep your thermostat in the low 60’s you can save a ton of money. But at that temperature you probably won’t be very comfortable.?This is where a small [easyazon_link keywords=”space heater” locale=”US” nw=”y” tag=”wisedollar-20″]space heater[/easyazon_link] comes in handy. You can use it to only warm up the area you are in.

When you turn up your furnace, most of the heating you are paying for is in parts of the house that aren’t be used anyway. Setting the thermostat lower and only warming the space you are currently using saves money. It’s a lot like downsizing your home.?If you set your space heater on 25 minutes before bed time, your room will be warm and you won?t use as much energy through the night.

Light a Fire

If you have a fireplace, you can use it the same way you would a space heater. You can keep the rest of the house cool and only warm the room where you currently are, saving?you money. This idea can be used for gas or log fireplaces, or even an old-fashioned corn or log stove.

Pile on the Blankets

Nothing says cozy like being curled up on the couch in blankets. Wrapping up in layers is a great way to keep yourself warm while not breaking the bank. Wear warm winter clothes underneath and you’ll be warmed up in no time. There’s no sense in heating your home so much that you can wear shorts in the winter. That’s a huge waste of money!

Light a Spicy Candle

Maybe this is just me, but if I light a candle that has a spicier scent like pumpkin spice, apple pie, cinnamon or pine, it instantly makes me feel warmer. This may only be a mental solution, but if you think you feel warmer, you will be.

Enjoy a Warm Beverage

A nice hot cup of tea or cocoa is sure to keep you warm when it gets cold outside. Baking cookies to go with your cocoa is also a great way to have fun and heat your home slightly by using the oven. If an adult beverage is your preference in the evening, there are tons of great hot drinks such as mulled wine, hot toddy, and Irish coffee. Just be sure to drink responsibly.

When it comes to staying warm in the winter cold, don?t get too stingy over the bill. Keeping your heater too low can lead your pipes to freeze, causing an even bigger and more expensive. Find a happy medium between freezing pipes and wearing shorts in the house so you can save money and stay cozy with these ideas.


How do you stay cozy in the winter? What do you keep your thermostat set at?


Photo courtesy of: jolier