Archives for December 2018

Amazon Coupon Code: $5 off $20+ of Print Books

Posted on December 7, 2018 // 3 Comments

Amazon has a $5 off $20+ of print book purchases with promo code GIFTBOOK18. Can be one book or multiple. Offer expires at 11:59pm Pacific on December 21, 2018. Must be sold by Amazon.com. Here are some newer books that are on my to-read list. I’m on somewhat of a memoir kick.

Here are my standard suggestions for those looking to gift a financially-related book:

Filed Under: Deals & Offers //

Big List of Kids Ski Free Passport Programs (3rd-6th Grade)

Posted on December 6, 2018 // 2 Comments

A friend of ours told us about the Colorado Ski Passport that lets 5th and graders from any state ski for free at several Colorado resorts, and I thought that was a great concept to promote this fun outdoor activity. If you can get even a single free lift ticket (and possibly even a free lesson with rentals), that can be a big savings these days. This led me to more digging and I found that several other states have similar programs.

I tried to find all of the state-wide programs and listed them below. I am excluding single-resort promotions, but many resorts do have family or kid specials where you get discounts if you stay for a certain number of hotel nights, etc.

Canada

Colorado

Idaho

Maine

  • Winterkids App (Annual membership is $35 for a family of 5 and includes “generous discounts” to kids 18 and under” in Maine and New Hampshire)

Michigan

Minnesota

  • Minnesota Ski Areas 4th Grade Passport (4th graders, unsure if limited to MN residents)

New Hampshire

New York

Pennsylvania

Utah

Vermont

Washington

Some programs do have capacity limitations and/or strict deadlines. If you know of any that I have missed, please let me know in the comments.

Filed Under: Deals & Offers //

Expedia Activities: $30 off $40+ Coupon Code

Posted on December 6, 2018 // 2 Comments

Update: This offer has expired.

Expedia has a new coupon code THANKYOU which will get you $30 off $40+ in experiences booked through Expedia Activities. Officially it expires 12/31/18, but it will probably end early, and your activity has to occur by 12/31/18 anyway.

“Buy experiences, not things!” Well, you can book a lot of experiences on travel portals these days. Disney and Universal are excluded, but there are a lot of options in nearly every city. Here are some examples:

  • Zoo tickets
  • Escape Rooms
  • Legoland
  • Six Flags
  • Seaworld
  • Hop on Hop off Bus Tours
  • Fishing, Boat, Segway, or Helicopter Tours
  • Dinner Shows

How to use your coupon code:

During the booking process, on the payment page you will see the link ”Enter coupon code” where you can enter the coupon code.
Enter the coupon code in the relevant field and then click the “Apply Coupon” button. If your booking is eligible, the applicable discount will be subtracted from the price of the travel reservation before the application of any taxes, applicable fees or additional costs.

Filed Under: Deals & Offers //

Giving Flowchart: How To Donate Wisely

Posted on December 5, 2018 // 3 Comments

If you are looking for some direction about donating your time and/or money, here is a nice infographic from the Bloomberg article These 27 Strategies Will Make Philanthropy an Effective Pursuit (click to enlarge):

givechart_full

It’s from last year, but everything still looks applicable. Also available as PDF.

Filed Under: Giving Back //

Dependent Care FSA: Save on Daycare, Preschool, Summer Camps, After-School, and Elder Care

Posted on December 4, 2018 // 11 Comments

One of the newer work perks that we took advantage of this year was the Dependent Care Flexible Spending Account (DCFSA). This is separate from the Health Care Flexible Spending Account (HCFSA) and the Health Savings Account (HSA). However, they do work in a similar way in that you can pay for eligible expenses with pre-tax money and thus save money by being exempt from income taxes on that amount. For example, we were able to pay for $5,000 in preschool expenses using your DCFSA in 2018. At a a 30% marginal total tax rate (see below), that was a $1,500 savings.

Eligible expenses for children (under age 13)
The overall idea is to cover childcare while you are working:

  • Nannies, Au pairs, and babysitters
  • Daycare and Nurseries
  • Preschool
  • Before and After School Care Programs. (Non employer-sponsored.)
  • Summer Day Camps

Eligible expenses for adults
The overall idea is to cover care for an adult dependent (spouse, relative) who is physically or mentally incapable of caring for themselves and lives in your home for more than half the year:

  • Adult or Senior day care center
  • In-home custodial caregiver (Non-medical, like eating and bathing assistance)
  • Transportation to/from eligible care (by your care provider)

You should keep detailed supporting documentation and itemized receipts for your HR department and potentially the IRS.

Maximum contribution amounts
The annual contribution limits for 2018 and 2019 are below. (They are not adjusted automatically for inflation.) Note that you can’t exceed your earned income.

  • $5,000 per year if you are married and file a joint tax return or if you file as single or head of household. (If MFJ, one person can get $5,000 when the other does not participate at all.)
  • $2,500 per year if you are married and file a separate tax return. (If MFS, both of you can get $2,500 individually.)

Similar to the Healthcare FSA, these funds must be claimed during the year deducted (plus any grace period) or you will lose the funds. “Use it or lose it”.

Total tax benefit
When you are able to pay with pre-tax money, you are avoiding taxes on:

  • Federal income tax
  • State income tax
  • FICA (Social Security tax)
  • Medicare tax

For 2018, the Social Security tax rate is 6.2% on the first $128,400 wages paid. The Medicare tax rate is 1.45% on the first $200,000 and 2.35% above $200,000. For us in the 22% federal marginal tax rate, that’s a total of 22 + 6.2 + 1.45 = 29.65%. So we’re nearly at a 30% savings even ignoring state income taxes. A 30% total tax savings on $5,000 in childcare expenses is $1,500. This is definitely worth enrolling and submitting a few receipts, even if our claim submission system is a bit slow and clunky.

This is also separate from the Child and Dependent Care Tax Credit. You are not allowed to “double-dip” and claim the same specific expense for both this DCFSA and the tax credit. But if you have enough total expenses, you can get both.

Bottom line. If you pay for childcare or care for a disabled adult dependent, you should check if your employer now offers a Dependent Care Flexible Spending Account (DCFSA). The times to check are when you get a new job, have a new child, change marital status, your spouse loses benefits, or during Open Enrollment. If you pay for full-time care, it is quite likely you can max this out and save some serious money. Just be sure to file those claims on time!

Filed Under: Frugal Living, Taxes //

Best Interest Rates on Cash – December 2018

Posted on December 3, 2018 // 16 Comments

Here’s my monthly roundup of the best interest rates on cash for December 2018, roughly sorted from shortest to longest maturities. Check out my Ultimate Rate-Chaser Calculator to get an idea of how much extra interest you’d earn if you are moving money between accounts. Rates listed are available to everyone nationwide. Rates checked as of 12/3/18.

High-yield savings accounts
While the huge megabanks like to get away with 0.01% APY, getting higher rates is as easy as transferring money electronically from your checking account to an online savings account. The interest rates on savings accounts can drop at any time, so I prioritize banks with a history of competitive rates. Some banks will bait you and then lower the rates in the hopes that you are too lazy to leave.

Short-term guaranteed rates (1 year and under)
I am often asked what to do with a big wad of cash that you’re waiting to deploy shortly (just sold your house, just sold your business, legal settlement, inheritance). My usual advice is to keep things simple and take your time. If not a savings account, then put it in a flexible short-term CD under the FDIC limits until you have a plan.

  • No Penalty CDs offer a locked-in rate with no early withdrawal penalty. That means your interest rate can never go down, but you can still take out your money (once) if you want to use it elsewhere. Ally Bank 11-month No Penalty CD is at 2.25% APY for $25k+ balance, Marcus Bank 13-month No Penalty CD at 2.15% APY with a $500 minimum deposit, and the CIT Bank 11-Month No Penalty CD at 2.05% APY with a $1,000 minimum deposit. You may wish to open multiple CDs in smaller increments for more flexibility.
  • Live Oak Bank has a 1-year CD at 2.85% APY ($2,500 minimum) with an early withdrawal penalty of 90 days of interest.

Money market mutual funds + Ultra-short bond ETFs
If you like to keep cash in a brokerage account, beware that many brokers pay out very little interest on their default cash sweep funds (and keep the money for themselves). The following money market and ultra-short bond funds are not FDIC-insured, but may be a good option if you have idle cash and cheap/free commissions.

  • Vanguard Prime Money Market Fund currently pays an 2.30% SEC yield. The default sweep option is the Vanguard Federal Money Market Fund, which has an SEC yield of 2.19%. You can manually move the money over to Prime if you meet the $3,000 minimum investment.
  • Vanguard Ultra-Short-Term Bond Fund currently pays 2.64% SEC Yield ($3,000 min) and 2.74% SEC Yield ($50,000 min). The average duration is ~1 year, so there is a little more interest rate sensitivity.
  • The PIMCO Enhanced Short Maturity Active Bond ETF (MINT) has a 2.66% SEC yield and the iShares Short Maturity Bond ETF (NEAR) has a 2.75% SEC yield while holding a portfolio of investment-grade bonds with an average duration of ~6 months.

Treasury Bills and Ultra-short Treasury ETFs
Another option is to buy individual Treasury bills which come in a variety of maturities from 4-weeks to 52-weeks. You can also invest in ETFs that hold a rotating basket of short-term Treasury Bills for you, while charging a small management fee for doing so. T-Bill interest is exempt from state and local income taxes.

  • You can build your own T-Bill ladder at TreasuryDirect.gov or via a brokerage account with a bond desk like Vanguard and Fidelity. Here are the current Treasury Bill rates. As of 11/30/18, a 4-week T-Bill had the equivalent of 2.30% annualized interest and a 52-week T-Bill had the equivalent of 2.69% annualized interest.
  • The Goldman Sachs Access Treasury 0-1 Year ETF (GBIL) has a 2.18% SEC yield and the SPDR Bloomberg Barclays 1-3 Month T-Bill ETF (BIL) has a 2.07% SEC yield. GBIL appears to have a slightly longer average maturity than BIL.

US Savings Bonds
Series I Savings Bonds offer rates that are linked to inflation and backed by the US government. You must hold them for at least a year. There are annual purchase limits. If you redeem them within 5 years there is a penalty of the last 3 months of interest.

  • “I Bonds” bought between November 2018 and April 2019 will earn a 2.82% rate for the first six months. The rate of the subsequent 6-month period will be based on inflation again. More info here.
  • In mid-April 2019, the CPI will be announced and you will have a short period where you will have a very close estimate of the rate for the next 12 months. I will have another post up at that time.

Prepaid Cards with Attached Savings Accounts
A small subset of prepaid debit cards have an “attached” FDIC-insured savings account with exceptionally high interest rates. The negatives are that balances are capped, and there are many fees that you must be careful to avoid (lest they eat up your interest). Some folks don’t mind the extra work and attention required, while others do. There is a long list of previous offers that have already disappeared with little notice. I don’t use any of these anymore.

  • The only notable card left in this category is Mango Money at 6% APY on up to $2,500, but there are many hoops to jump through. Signature purchases of $1,500 or more and a minimum balance of $25.00 at the end of the month is needed to qualify for the 6.00%.

Rewards checking accounts
These unique checking accounts pay above-average interest rates, but with unique risks. You have to jump through certain hoops, and if you make a mistake you won’t earn any interest for that month. Some folks don’t mind the extra work and attention required, while others do. Rates can also drop to near-zero quickly, leaving a “bait-and-switch” feeling. I don’t use any of these anymore, either.

  • The best one left is Consumers Credit Union, which offers 3.09% to 5.09% APY on up to a $10k balance depending on your qualifying activity. The highest tier requires their credit card in addition to their debit card (other credit cards offer $500+ in sign-up bonuses). Keep your 12 debit purchases just above the $100 requirement, as for every $500 in monthly purchases you may be losing out on cash back rewards elsewhere. Find a local rewards checking account at DepositAccounts.
  • If you’re looking for a non-rewards high-yield checking account, MemoryBank has a checking account with no debit card requirements at 1.60% APY.

Certificates of deposit (greater than 1 year)
You might have larger balances, either because you are using CDs instead of bonds or you simply want a large cash reserves. By finding a bank CD with a reasonable early withdrawal penalty, you can enjoy higher rates but maintain access in a true emergency. Alternatively, consider building a CD ladder of different maturity lengths (ex. 1/2/3/4/5-years) such that you have access to part of the ladder each year, but your blended interest rate is higher than a savings account. When one CD matures, use that money to buy another 5-year CD.

  • Mutual One Bank has a 19-month CD at 3.04% APY ($500 min). 6 month early withdrawal penalty.
  • Greenwood Credit Union has a 5-year certificate at 3.75% APY ($1,000 min). Early withdrawal penalty is 6 months interest. United States Senate Federal Credit Union has a 5-year Share Certificate at 3.63% APY ($60k min), 3.57% APY ($20k min), or 3.51% APY ($1k min). Note that the early withdrawal penalty is a full year of interest. Anyone can join this credit union via American Consumer Council.
  • You can buy certificates of deposit via the bond desks of Vanguard and Fidelity. These “brokered CDs” offer FDIC insurance, but they don’t come with predictable fixed early withdrawal penalties. As of this writing, Vanguard is showing a 2-year non-callable CD at 3.10% APY and a 5-year non-callable CD at 3.55% APY. Watch out for higher rates from callable CDs listed by Fidelity.

Longer-term Instruments
I’d use these with caution due to increased interest rate risk, but I still track them to see the rest of the current yield curve.

  • Willing to lock up your money for 10+ years? You can buy long-term certificates of deposit via the bond desks of Vanguard and Fidelity. These “brokered CDs” offer FDIC insurance, but they don’t come with predictable fixed early withdrawal penalties. As of this writing, Vanguard is showing a 10-year non-callable CD at 3.60% APY. Watch out for higher rates from callable CDs from Fidelity. Matching the overall yield curve, current CD rates do not rise much higher as you extend beyond a 5-year maturity.
  • How about two decades? Series EE Savings Bonds are not indexed to inflation, but they have a guarantee that the value will double in value in 20 years, which equals a guaranteed return of 3.5% a year. However, if you don’t hold for that long, you’ll be stuck with the normal rate which is quite low (currently a sad 0.10% rate). I view this as a huge early withdrawal penalty. You could also view it as long-term bond and thus a hedge against deflation, but only if you can hold on for 20 years. As of 11/30/18, the 20-year Treasury Bond rate was 3.19%, so this EE bond is no longer offering a huge premium.

All rates were checked as of 12/3/18.



Filed Under: Banking, Deals & Offers, Investing //

Shel Silverstein “The Voice” and Financial Freedom

Posted on December 2, 2018 // Leave a Comment

I remember being both amused and confused by Shel Silverstein’s poems as a kid. When I read them again today to my own kids, my reaction is mostly the same, except some of them are even darker than I remember!

I ran across a Fatherly roundup of inspirational quotes from Silverstein and really enjoyed this one called “The Voice” from his newer book Falling Up:

There is a voice inside of you
That whispers all day long,
“I feel this is right for me,
I know that this is wrong.”
No teacher, preacher, parent, friend
Or wise man can decide
What’s right for you–just listen to
The voice that speaks inside.

For me, after shock-proofing, the path to financial freedom was all about finding alignment with this voice. I’m still working on it, but there is less of an inner struggle when you’re not also stressed about how to fix the heater and also cover the rent due next week.

Filed Under: Inspirational //
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