If you’re a business owner, professional, physician, or self-employed, and a high-earner, you may pay higher taxes than most Americans. Individual income taxes are the IRS’s biggest revenue source and the top 50% of all taxpayers paid 97% of the total income tax paid.[i] The good news is that there are some financial options that you may be able to take advantage of to lessen your taxes and keep more of your hard-earned money. In this article, we will go over some of the basics of the Defined Benefit Plan (DB), the Defined Contribution Plan (DC), and Cash Balance Pension Plans.
It may be hard to see sometimes, with the often apocalyptic 24-hour news cycles, but there is a lot of good out there in the world. One of the good things is how generous Americans have been with their charitable giving. Part of this widespread generosity is tied, no doubt, on the internet connecting people all over the world. Americans gave $410.02 billion dollars to charity in 2017, breaking a record and 70% of that was given by individuals.[i] As wealth grew, so too did charitable giving and generosity. Within that huge number, over $400 billion, some interesting patterns and data appear. Within this article, we will discuss why people practice charitable giving, who is giving, and how, if inclined, you could give more as well.
There are so many in need and for so many reasons. Between medical research, animal charities, environmental disaster, the refugee crisis, health crisis, homelessness, drug addiction, food instability, arts organizations, you name it, and there is a cause that could use the help. There is also solid evidence that your donations actually do make a difference to these causes. They do need and appreciate every penny they receive. But did you know that giving is actually good for you too? In fact, giving triggers a pleasure point in our brain, the same area of reward processing that is activated by pleasurable activities like sex and food.[ii] Donating our time and money to a cause makes us feel good, helps contribute to our overall happiness, and can actually help our health and mortality rates.[iii] On top of helping others and feeling good, charitable donations can be tax deductible, and for some, that is motivation enough. A good rule is before donating to anything you plan to claim, do your research and confirm that they are a recognized non-profit organization by the IRS and always get a receipt.
Not all purchases are created equal. No matter your tax bracket there is often the feeling that there isn't enough to do what you want, pay off what you need to, and sock enough away for down the line.
There's always some excuse for not getting on top of our finances, we are busy after all, and between work and families, there's little brainpower left to devote to balancing the books and making more mindful spending choices. But what if, with just a few tweaks, you could? In this article, we will walk you through a few techniques that can help you feel happier about your spending habits and your money management skills.
Technique One: Make Spending a Treat
Are you the type to grab coffee out every day? How about lunch? If so you may be spending thousands of dollars a year. By bringing a lunch and making your own coffee you could pay off a credit card bill, go on a great vacation, or have a nice chunk of change tucked into your savings. We nickel and dime ourselves all the time and retailers know this. Supermarkets and department stores are designed to make the things you need harder to find and encourage impulse buying along the way. Online retailers create urgency with sales, email campaigns, and coupon codes. On top of that, keeping a credit card on file makes it all the easier to make last-minute instantaneous purchases. The less we use cash, the less we feel these fast, impulsive purchases. A great place to start tweaking our relationship with money is making the little purchases more of a treat than a given. Paying in cash is a good way to see where your money goes, allotting yourself a certain amount of spending money a day, when your wallet is empty, then you've reached your max. By practicing mindful buying you can also fight the urge to just speed-spend. Pick up items, try on clothes, price comparison shop. Retailers are very savvy about the psychology of the shopper's brain and design your experiences to upsell you. So, step one is to talk a pause and really think before you buy. Do you need a $5 coffee (and the extra calories?) is it better to grab a $10 wilted salad or to brown bag it? The average family wastes over $2,000 a year throwing out leftovers alone.[i] You may find that by making your purchases more of a special treat and not just a blah exercise in consumerism, that the things you own start to mean more. That cappuccino becomes a treat and not a daily caloric indulgence.
Most consumers typically have both a credit card and a debit card. Of course, the biggest difference between the two is that a debit card will immediately take money out of your bank account when used, unlike a credit card, which will pay for the purchase and later add the amount of the transaction to your monthly statement.
But are there any other differences between the two?