Aug 1 2012

Vote for the Plutus Awards

By |August 1st, 2012|Blog, Life|1 Comment|

As you may have heard, I’m the MC of the Plutus Awards at #FINCON12 this year.

I’m preparing some pretty exciting things to make sure it’s a fun and entertaining event, but the most important part of the night is the winners of the awards. That’s where you come in.

Nominations for the Plutus Awards opened today and I’d love for you to provide your input. Nominations run for the next two weeks and the 5 most nominated blogs become finalists where a panel of bloggers will select the winners. It’s kinda like we’re mixing the People’s Choice with the Academy Awards, except we are taking out all the truly famous people and inserting personal finance bloggers.

Vote for Your Favorites

If you’d like to vote you can do it right here. It only takes a few minutes and you don’t have to vote for any category you don’t want to vote for. Personally, I didn’t vote for things like International or Canadian blogs because I don’t read them.

If you’d like to vote for me, I’d be honored for your vote in the “Best Blog for Young Adults” category. I was nominated last year and it was a really cool feeling. I’m hosting the event this year, which is (in my opinion) cooler than winning an award, but it would be nice to get nominated as well.

Last year I “campaigned” for a few of my favorite blogs, but since I’m hosting the event this year it’s probably best that I remain impartial. My only recommendation if you do vote is that you really consider the topic. For example, just because someone has the word “debt” in the blog name doesn’t mean they are a “debt” blog. It’s the content that matters, not the URL.

Thank You

I haven’t done this in a while, so I want to thank anyone who is reading this post. It’s a lot more fun to write these posts when I know someone else is going to read it. I hope you have as much fun reading them as I do writing them. You guys really are awesome!

trophy

photo credit: terren

Jul 31 2012

HSA Funds Can Be Used for Your Family Members

By |July 31st, 2012|Blog, Personal Finance Tips|11 Comments|

I was talking to a friend of mine the other day and the conversation turned to Health Savings Accounts (because we’re cool like that).

An HSA is a savings account that is never hit by income tax as long as the money is used for qualified medical expenses. The money can be saved year over year and used when needed (unlike an FSA which must be spent by the end of the year). The catch is that you are only eligible for an HSA if you have a high deductible health insurance plan.

If you are in the 25% tax bracket, that means you get an immediate 25% return on your “investment” by just earmarking money for health expenses.

My friend is getting married soon and he was wondering if he could use money in his HSA to pay for medical expenses for his spouse once they are married, even if she is on a low deductible plan and not eligible for an HSA herself.

Combine Low and High Deductible Health Plans to Save Money

Both my friend and his future wife have health insurance through their companies. He has a high deductible plan with an HSA, she has a regular low deductible plan.

nurse

photo credit: timefornurses

Legally he CAN use his HSA dollars to pay for any medical bills she incurs (he could also use the HSA for kids if they had any). That means his wife essentially has a low deductible health insurance plan with an HSA along with it. That’s pretty sweet!

Another way to have a low deductible plan with an HSA is to save up a bunch of money in your HSA over your healthy years. Single people can save a maximum of $3,100 a year in their HSA, while if you have a family plan you can save $6,250 a year (those limits will rise in 2013 to $3,250 and $6,450). If you can save in your HSA for about five years without needing to use any of the money in those accounts, you could have anywhere from $15,500 to $31,250 in your HSA.

At that point you could just switch to a low deductible health insurance plan and use the money saved up in your HSA to pay for any medical treatment.

Pro-Tip: While you are young and healthy, get a high deductible health plan max out your HSA. You’ll save money on premiums and build up a nice financial safety net for medical expenses.

Readers: Do you have an HSA?

Carnival Links

Totally Money Carnival at Money Challenge
Y & T’s Weekend Ramblings at Young and Thrifty
Carnival of Fin. Camaraderie at Modest Money
Yakezie Carnival at Passive Income to Retire
Carnival of Retirement at Master the Art of Saving
Wealth Artisan’s FinCarn at Wealth Artison
Carnival of Financial Planning at The Skilled Investor

Jul 26 2012

Social Security Taxes the Poor to Benefit Rich White People

By |July 26th, 2012|Blog, Economics / Politics|37 Comments|

I hate Social Security.

I hate that it takes 6.2% of every dollar I earn (temporarily 4.2%), and takes 6.2% of my income from my employer (who would probably be paying me that extra 6.2% if they weren’t paying it to the government!).

Imagine how much more I could save for my own retirement if I had a 12.4% raise. That’s $3,720 for someone making $30k a year. That’s $6,200 a year for someone making $50k a year.

And finally, even though I hate any kind of tax or benefit that isn’t flat, this on is especially insidious. Social Security is an incredibly racially and socio-economically regressive tax. The tax helps rich white people way more than it helps middle class and poor minorities.

Race Matters

The full retirement age for social security is 65-67, depending on when you were born. When you consider that white men live to be 75.3 years old on average and black men live to be only 70.8 years old it doesn’t look so good. The average white man gets 8.3 years of benefits while the average black man gets only 3.8 years of benefits.

Let me say that again. The average black man pays 12.4% in taxes on his annual income for 40+ years, and in return gets less than 4 years of Social Security benefits which are so crappy he’ll probably need a part time job anyway.

Similarly, a white woman lives to 81.2 on average, while a black woman lives to 77.5, giving the white woman an extra 3.7 years of benefits.

Source of average ages can be found here.

Income Matters

Not only are white people getting the most benefit from Social Security, but rich people also live longer than poor people, which means the rich get much more out of Social Security than the poor.

I couldn’t find more recent data, but what I did find shows the top 50% of 60 year old earners in America live to an average age of 85.4 years, while the bottom half live to an average age of 79.6. If anyone knows of more recent data please post in the comments.

This should be no surprise: rich people live in safer communities, can afford healthier food, have more leisure time and can afford better health care. Don’t get me wrong; if you’ve worked hard and made a bunch of money then you deserve those benefits. I don’t think rich people deserve a big Social Security check paid for by hardworking (and potentially poor) Americans.

Think about this for a minute. A rich person who probably doesn’t even need supplemental income during retirement is going to get many more years of Social Security benefits than a poor person. This is truly disturbing when we look closer.

Remember that Social Security is broke and today’s benefits are funded by today’s Social Security taxes. That means someone making $10 an hour today is paying Social Security taxes, some of which are going directly to rich retired people who have millions of dollars in the bank. Social Security is taking money from poor working people and giving it to rich retired people. I don’t care who you are or what you believe; that’s not right.

Social Security

It’s time we stop pretending that Social Security can work as a retirement plan for the elderly. People who can afford to pay for their retirement should stop receiving benefits immediately, and those who can’t should be migrated into existing welfare programs.

What This Means For You

If you are a young person like me, I recommend that you start saving for retirement under the assumption that social security won’t be there to help. As for all that money you’ve already paid in; just consider it another tax from your friendly neighborhood Uncle Sam.

If you are nearing retirement and you are expecting Social Security, I’d recommend doing whatever you can to extend your career and save up money, because Social Security is going to collapse if it isn’t ended voluntarily.

Finally, if you are currently receiving Social Security then enjoy it while you can. I don’t think it’ll last much longer, and I hope you have a backup financial plan.

Jul 24 2012

Wouldn’t a 5% CD Be Great?

By |July 24th, 2012|Blog, Personal Finance Tips|15 Comments|

The other day I was lamenting the fact that I can’t get any better than a 1.1% return on a CD, which means there’s no point to even consider tying up my money for such a low rate of return.

It makes it so hard to save money when the interest rate you can get at a bank is lower than the inflation rate. That’s why I’ve turned to alternative places to invest my money like Lending Club, but I don’t want to put too much money there because the risk of default could get super high if America goes back into a recession or enters a depression.

If I want a safe investment in a bank, then American banks simply aren’t the right place to put my money.

Then it hit me: what if I could invest in CD-like products in other countries that might have higher interest rates?

27 seconds and a quick Google search later I found that I can get over 5% on a 3-month Australian Term Deposit (same as an American CD) with Ubank Term deposits. Are you freaking kidding me?!

Interest Rates are Higher in Australia

People in Australia are actually rewarded for saving money with great low risk interest rates while I’m stuck here in America getting a measly 1%.

australia

photo credit: lednichenkoolga

I’ve actually been wanting to get into some foreign currencies, specifically the Australian Dollar, and now I realize that I can get 5% on my money in addition to any gains (or losses) I might have against the US Dollar.

The problem is I can’t figure out how to put my money into an Australian bank. The account I linked to earlier requires that you be an Australian citizen and have a residence in Australia. I certainly don’t meet the criteria and I assume most of my readers don’t either.

Unfortunately it doesn’t look like I can become an Australian citizen very easily. I don’t have any Australian blood in my body and I have never even been there.

Readers: Do you have citizenship in another country? If so, can you get better interest rates there than are available in America? Do you know a way to invest in CDs from other countries without becoming a citizen?

Jul 23 2012

I Saved a Bunch of Money on Food Last Week

By |July 23rd, 2012|Blog, Personal Finance Tips|7 Comments|

Last week I wrote about how I was spending too much money on food and I wanted to stop eating out for an entire week.

One week later I can report that I made it almost all week without eating out and saved a bunch of money.

In June I spent $939 on eating out and groceries (which also includes paper towels, toothpaste, and anything else that I don’t eat but buy at the grocery store). In the last week I spent about $42.

I did have to buy food when I went into the office twice (I could have packed a lunch but I wanted to eat in the cafeteria with work colleagues), but I spent $8.18 combined on both days. My work has a pretty good cafeteria where I can get 2 tacos, a drink, and a bag of chips for $4.09. Technically that’s “eating out” but it was cheap.

food

photo credit: jefferyw

Everything else I ate this week came from groceries that I already had in my house or the $34 worth of groceries I bought during the week. My girlfriend Tag made some awesome lime chicken and a casserole that fed me for about 4 or 5 meals during the week. It does get a little tiring to eat the same exact meal a bunch of times during the week, but when it’s something really delicious like Tag made then it’s easier.

She even put some vegetables in there so I’m going to assume I’m 1000% healthier this week than I was last week.

It’s Easy Saving Money When You Identify a Spending Problem

The hardest part about finding ways to save money on spending is to identify where you have a spending problem.

Scratch that. It’s ADMITTING you have a spending problem.

I hadn’t looked at my food budget for months because I KNEW what I found would be terrible. It’s that stupid theory that if you don’t see something it’s not really happening. It makes absolutely no sense and makes me feel like an idiot, but I know I’ve done it before and I’ll probably do it again.

Readers: Are you spending too much money on something? Are you ready to make a change?

Carnival Links

Y & T’s Weekend Ramblings at Young and Thrifty
Carnival of Retirement at My Personal Finance Journey
Carnival of Fin. Camaraderie at The University of Money
Yakezie Carnival at The Ultimate Juggle
Wealth Artisan’s FinCarn at Wealth Artison
Carnival of MoneyPros at My Family Finances
Canadian PF Happy Hour at Canadian Personal Finance
Carnival of Financial Planning at The Amateur Financier

Jul 19 2012

I’m the Master of Ceremonies at the Plutus Awards at FINCON12

By |July 19th, 2012|Blog|10 Comments|

I’m sure there are a bunch of you out there thinking “I love Kevin’s music videos and his sense of humor so much, I wish I could see him live!”

Okay, maybe my mom is the only person actually thinking that, but I’m still excited to announce that I will be hosting the 2012 Plutus Awards (personal finance blogging awards) at the Financial Blogger Conference in Denver this year.

I’m the “Master of Ceremonies”

According to the Plutus Awards site, I’m the “Master of Ceremonies”. I just learned that MC is short for Master of Ceremonies (who knew?). Why the heck would anyone want to shorten “Master of Ceremonies”? I LOVE IT!!! I don’t get to be the master of much now that I live with my girlfriend, so at least I get to be the master of something!

Maybe to make things interesting I’ll take a cue from this obviously talented MC:

MC

photo credit: pretendtious

Or… maybe I’ll just wear a suit. Perhaps a tux if it’s in the budget. This guy scares me.

I do want to give credit to lots of bloggers who are coming together to make this event happen. We are all trying to make sure that this awards ceremony is fun, exciting, engaging, and doesn’t take too long.

And after all that work is done, I’m gonna be the one up on stage trying to pull everything together, which should be a piece of cake. As you can see from the announcement I’m highly qualified to host the awards ceremony:

Kevin is an accomplished performer and host, having landed the lead role in his first grade Halloween play “The Pumpkin Patch Kids” and most recently hosting Kevin McKee’s College Graduation Extravaganza.

My mom has the video tape of that 1st grade play somewhere. I bet there’s a good chance I end up picking my nose at some point during the performance. If she ever finds it I’ll upload it to Youtube and we can all have some great laughs over it.

I’m Taking Requests

I want this event to be awesome. I want it to be fun and entertaining, and mostly I want to make sure we are honoring all the great work that has been done in the personal finance community over the last year.

If you are going to be at FINCON12 and have any suggestions of what you’d like to see at the Plutus Awards, please leave your ideas in the comments. The only definite rule I have so far is that we need to keep the award ceremony to 1 hour or less (hopefully less so people don’t fall asleep). Let me know what you want me to do as the MC, and give any other ideas that you think would be completely awesome!