Creating a Savings Plan: Pay Yourself First

Creating a Savings Plan: Pay Yourself First

You’ve probably heard the phrase “pay yourself first.” But what does it really mean? It means you should consider your savings account in the same manner you consider your monthly bills—as a necessary expense. In fact, you should pay yourself before you pay your monthly bills. Professional blogger J.D. Roth lists these three reasons why:

·         When you pay yourself first, you’re mentally establishing saving as a priority. You’re telling yourself that you are more important than the electric company or the landlord. Building savings is a powerful motivator—it’s empowering.

·         Paying yourself first encourages sound financial habits. Most people spend their money in the following order: bills, fun, saving. Unsurprisingly, there’s usually little left over to put in the bank. But if you bump saving to the front—saving, bills, fun—you’re able to set the money aside before you rationalize reasons to spend it.

·         By paying yourself first, you’re building a cash buffer with real-world applications. Regular steady contributions are an excellent way to build a nest egg. You can use the money to deal with emergencies. You can use it to purchase a house. You can use it to save for retirement. Paying yourself first gives you freedom—it opens a world of opportunity.

Virginia Saves offers a variety of resources to help you get started—join today!

Paying Off High Interest Debt


Paying Off High-Interest Debt

Borrowing more money than you can afford is costly in many ways. Americans spend well over $75 billion a year just on credit card interest and fees. That means that families who revolve credit card balances pay an average of $1,500 a year in interest and fees. If they saved that $1,500 in an account with a five percent yield, in 40 years they would have nearly $200,000! Taking on too much debt also lowers your credit score. That means you will end up paying higher interest rates on all your consumer and mortgage loans. A low credit score can also make it harder to rent an apartment, get utility services, and even get a job.

Too much debt isn't just expensive. People with lots of debt often say they lack peace of mind. They worry constantly about paying off debts and making ends meet. The stress of these worries affects their family life, work performance, and other areas of their lives.

Are you in Trouble?

If you answer "yes" to any of the following questions, then you probably need to get your debts under better control:

  1. Can you only afford to make minimum payments on your credit cards?
  2. Do you worry about finding the money to make monthly car payments?
  3. Do you borrow money to pay off old debts?
  4. Have you used a home equity loan to refinance credit card debts, and then run up new revolving balances on your cards?
The good news is that there is hope. With planning, discipline, patience, and maybe some outside help, almost anyone can reduce their debts and start to accumulate wealth.

How to reduce your Debts

The first step in getting out of debt is to stop borrowing. To do that, you have to stop spending more than you earn. So, make a budget and cut out any expenses you can. It may help to cut up your credit cards or lock them away in a safe place.

      Set a Goal.

  •  Example: I want to pay down $5,000 in debt in one year.

      Make a Plan.

  •  Figure out the most you can afford to pay each month to reduce your debts, then make those payments without fail. See if you can automatically pay your bills each month to ensure you make your payments on time.
TIP: If you have debts on more than one credit card, either pay off the card with the highest interest rate first and work your way down to the card with the lowest rate, or pay off the smallest loan first and work your way up to the largest. Once you've paid off your debts, don't give in to the temptation to start over spending again. Instead, take the money you were paying each month on  your debts and begin to save it. That will give you a financial cushion the next time an emergency strikes.

Where to get help

In communities, there are agencies that can help you manage your debts.

           Consumer Credit Counseling Services 

            The most helpful and most widely available are non-profit Consumer Credit Counseling
            Services (CCCS). CCCS counselors can work with you privately to help you develop a   
            budget, figure out your options, and negotiate with creditors to repay your debts.
            Call 1-800-388-2227 to locate the office nearest you.

            Cooperative Extension Offices

            Some national credit counseling non-profits, who provide advice online or over the phone,
            can also be helpful. However, others charge high fees for little service, so be sure to shop
            carefully. In many communities, Cooperative Extension offices offer workshops, home-study
            courses, and other services to help people manage their money, including their debts.
            Cooperative Extension offices are listed in the blue pages of the phone book under county

Are you ready to set your goal?

Virginia Saves is a non-profit that encourages individuals and families to save money and build personal wealth, can help you develop your goals and take action. When you join as a saver you'll receive the following benefits:
  • Free subscription to the quarterly American Saver newsletter
  • Free monthly e-mail newsletters with savings advice from national experts.
  • Free access to the members-only Savers Tracking Tool to help you reach your goals
  • Access to online financial prizes and games. Get 100 bonus credits with SaveUp at
  • Like us on Facebook at: Virginia Saves
  • Join today at


Saving for a Large Purchase

Saving for a Large Purchase

Traditionally when we think about saving for a large purchase we think about saving for a car or a home. But there are other short-term and life event purchases that could also fall into this category. For example, saving for a new computer, a vacation, or a wedding could all fall nto the large purchase category.

No matter what you are saving for, the way to achieve your goal is the same:

          Set a Goal.

    • Decide what you want to save for.

          Make a Plan.

    • Determine how much you want to save a month and for how long.

           Save Automatically.

    • Set up direct deposit or put part of your pay into a savings account automatically each month.

Strategies for Saving for a Large Purchase

  • Build adequate emergency savings -  Before you begin to save for any large purchase, make sure you have adequate emergency savings. You wouldn't want to save for months or years only to have to dip into your large purchase savings in order to pay for an emergency.
  • Pay Yourself First - Once you have set your goal and made a plan on how long it will take to reach your goal, having money automatically put into an account through direct deposit or an automatic transfer from your checking account.
  • Keep your savings safe and protected
    • If you are looking to save for a few years, consider putting your savings in a Certificate of Deposit (CD), a U.S. Savings bond, or a 529 account (for college savings). These types of accounts generally yield more than a typical savings account but also have limitations to when you can access your funds. Learn more about financial products to help you save.
    • Some large purchases, like saving for an appliance, a computer, or a vacation take less time to save for. For these types of purchases consider putting your savings into a savings account or share account. This will keep your money safe and secure and you can usually access your savings at any time.

Are you ready to set your Goal?

Virginia Saves are here to help. Virginia Saves can help you develop your goals and take action. When you join as a saver, you'll receive the following benefits:
  • Free subscription to the quarterly American Saver newsletter.
  • Free monthly e-mail newsletters with savings advice from national experts.
  • Free access to the members-only Savers Tracking Tool to help you reach your goals.
  • 100 bonus credits with SaveUp

Courtesy of Katie Bryan, America Saves communications manager

A Lesson from the IRS for Students Starting a Summer Job

School’s out, but the IRS has another lesson for students who will be starting summer jobs. Summer jobs represent an opportunity for students to learn about the tax system.

Not all of the money they earn will be included in their paychecks because their employer must withhold taxes.

Here are six things the IRS wants students to be aware of when they start a summer job.
1. When you first start a new job you must fill out a Form W-4, Employee’s Withholding Allowance Certificate. This form is used by employers to determine the amount of tax that will be withheld from your paycheck. If you have multiple summer jobs, make sure all your employers are withholding an adequate amount of taxes to cover your total income tax liability.

2. Whether you are working as a waiter or a camp counselor, you may receive tips as part of your summer income. All tips you receive are taxable income and are therefore subject to federal income tax.

3. Many students do odd jobs over the summer to make extra cash. Earnings you receive from self-employment – including jobs like baby-sitting and lawn mowing – are subject to income tax.
4. Even if you do not earn enough money to owe income tax, you will probably have to pay employment taxes. Your employer will withhold these taxes from your paycheck. If you earn $400 or more from self-employment, you will have to pay self-employment tax. This pays for benefits under the Social Security system that are available for self-employed individuals the same as they are for employees that have taxes withheld from their wages. The self-employment tax is figured on Form 1040, Schedule SE, and Self-Employment Tax.

5. Food and lodging allowances paid to ROTC students in advanced training are not taxable. However, active duty pay – such as pay received during summer camp – is taxable.
6. Special rules apply to services you perform as a newspaper carrier or distributor. You are treated as self-employed for federal tax purposes regardless of your age if you meet the following conditions:
  • You are in the business of delivering newspapers.
  • All your pay for these services directly relates to sales rather than to the number of hours worked.
  • You perform the delivery services under a written contract which states that you will not be treated as an employee for federal tax purposes.
    If you do not meet these conditions and you are under age 18, then you are generally exempt from Social Security and Medicare tax.
More information about income tax withholding and employment taxes can be found at, the official IRS website.

Big Purchases, Big Decisions

FDIC Consumer Newsletter Offers Tips on Buying a Bank CD, Paying for Education, Financing a Car

Big purchases - and the financial decisions that come with them -- can have major implications for consumers. The Spring 2012 issue of FDIC Consumer News features practical tips for buying a certificate of deposit (CD), paying for higher education, and financing the purchase of a car.

Spring 2012 FDIC Consumer News

Retirement Shortfall Risk Making College Saving Tougher, Even for Affluent


Financial planners are helping affluent families confront a financial quandary that most families didn't face 30 or 40 years ago: How to plan for both their retiremnt and their children's college tuition. 
National studies show that most Americans run the risk of running out of money in retirement thanks to the combination of factors, which include record unemployment, declining wealth, low savings rates, investment losses and falling home values. For more click here.

Courtesy of Financial Advisor and Virginia 529

Student loans: 5 steps to pay down your debt

Student loans: 5 steps to pay down your debt

Student loans should be paramount in your mind if you've recently graduated college. The school halls are empty, the weekly speeches for your English class are complete, and you’re cleaning up after your graduation party. Now comes the hard part: paying for the education that you’ve just completed. Where to begin? Collect all your loan paperwork and then follow these five smart steps to paying off your student loans.
– Maura Kastberg is a financial-aid expert and director of student enrollment at RSC, Your College Prep Expert, a college- and career-prep service based in Schenectady, N.Y.

For the 5 steps to pay down your debt.

Courtesy of The Christian Science Monitor

Financial Planning for College

If you have children in high school, now is the time to begin planning for college.  Take a look at this article to help you start the process. click here for more information from the Washington Post.

Help Your Graduate to Manage Money

Help Your Graduate to Manage Money

Parents provide the most influence on their child's financial knowledge, attitudes, and behaviors. So, whether your child just graduated from high school or will be home soon from college for summer break, now is the perfect time to help him or her learn to manage money and exercise wise financial decision making. For more click here.

Courtesy of 

Use the IRS Data Retrieval tool when applying for a student loan

Use the IRS Data Retrieval tool when applying for a student loan  

If you are a student or parent you can now access your IRS tax return information using the 2012-
2013 IRS Data Retrieval Tool. This is an easy and secure way to access and transfer your tax
return information directly into your Free Application for Federal Student Aid form. If you are eligible to use the IRS Data Retrieval Tool, we highly recommend using the tool for several reasons:

1. It’s the easiest way to provide your tax data.

2. It’s the best way of ensuring that your FAFSA has accurate tax information.

3. You will not need to provide a copy of your or your parents’ tax returns for your financial aid

Who can use it? 

If you or your parents meet the following criteria, you’ll be given the option to retrieve, display and
transfer your federal tax information:

  •  If you filed a 2011 tax return  
  •  If you have a valid Social Security Number  
  • If you have a Federal Student Aid PIN 
  • If you do not have a PIN, you will be given the option to apply for one  
  •  If your marital status has not changed since Dec. 31, 2011.  

Who should not use it? 

If any of the following conditions apply to you or your parents, you should not use this tool:

  •  If you filed an amended federal tax return for 2011  
  •  If you did not file a federal tax return for 2011  
  •  If your 2011federal tax filing status is married filing separately  
  •  If you filed both a federal tax return and a foreign return  
  • If you do not use the IRS Data Retrieval Tool to provide tax information and your college requests a copy of your tax return or your parents’ tax return, you may be required to obtain an official tax transcript from the IRS. To order tax transcripts, go to Order a Return or Account Transcript at  
Courtesy of IRS Outreach Corner

Saving for college: Tips on 529 plans, scholarships

Saving for college: Tips on 529 plans, scholarships

In today's economic environment, many parents may decide to start their child's college savings account at birth.  Here's why.  A year of tuition and fees at the average four-year private college cost $28,500 in the 2011- 2012 school year, says the College Board. To find out more click here.

Courtesy of USA Today and Virginia 529

Backyard Parties

As the summer heats up, our activities gravitate to the great outdoors. Hosting a backyard party during the summertime can be a great way to connect with family and friends. Here are some ideas to help you throw a party to be remembered for years to come.

Engage other friends and family: You don't have to do it all. Consider how you can include the participants in the planning where possible. Family members will enjoy the party more when they had a part to play. Aunt Susie may be an awesome cook and might take charge of the food planning (that doesn't mean that she has to do it all but she now has an area that she oversees). Cousin Tommy, might be great at games, someone else on decorations, invitations, pictures, music, set up, clean up.... You get the idea. All you need is a theme and then begin the plan. By engaging all family members in the process you build anticipation for the fun day and increase the joy on the day.

Be Available: Prior planning can help you to be available more during the big party. People came and they want to see you. Disappearing to take care of logistics behind the scene makes the event work for you and not what your guest had hoped for. By creating a checklist and assigning duties, everyone gets to enjoy more of the fun.

Plan For Weather: Have a plan in case it rains or the weather does not cooperate. Having a covered shelter or a tent can be a great way to give people a way to stay dry if a sprinkle or two should crop up. Also if you have decorations for your party, make sure they are securely fastened in case a wind should blow up (don't forget about paper products - they blow nicely if they are not secured).

Lighting: If your party will go into evening hours be sure to have plenty of lighting around the yard so your guests don't have to search for their food and drinks! If you don't have outdoor lights, consider renting them from a local rental supply.

Food: Have as much of the food prepared in advance as possible. That way you are not slaving over preparations while the guests are there. Also consider foods that cook quickly like burgers and dogs to maximize the enjoyment of the fellowship with friends. If you are having guests bring a dish help them to know what would be helpful. You might suggest that they bring their dishes in low cost aluminum containers so they don't need to worry about taking empties home and you don't have to stress about reconnecting people with their dishes.

Bugs: Citronella candles can be a great addition to a backyard party. Also consider having a few cans of bug spray floating around for guests to use. Don't forget to provide cover for the food as well. Having a mesh tent for the food can keep bugs out and make your life much easier.

Chairs: Have extra chairs available for people to sit and enjoy the event. For those who do not bring a folding chair consider having some extra available.

Games and Activities: Simply providing a soccer ball or football can be enough to get a game started. In addition to the list below, check out our summer games list:

-:- Backyard cricket
-:- Basketball shoot out
-:- Discus throwing using a frisbee.
-:- Egg and spoon race
-:- Relay race with batons
-:- Sack race
-:- Volley ball match

Pictures: Your party is an event that you want to remember, so don't forget to take pictures not only of the set up before hand, but also of the guests enjoying themselves.

Music: Don't forget the music! Select music that is in keeping with the theme of your party to help your guests get into the mood.

Decorations: The internet can be a great resource for creating themed decorations without spending a lot of dough. If you decide to use a theme for your party, you can create the mood by creating decorations that convey the character of the theme. Decorate your fence with balloons and streamers to add to the festive nature of the event.

Theme Parties:
  • Luau: Go polynesian by decorating with a luau theme. Bamboo mats and floral decorations can create a wonderful mood. Fruity drinks with umbrellas can make the occasion very festive.
  • Garden Party: This can be a great excuse to get some of that landscaping done! Add some baskets and buckets of plants and flowers around and you have created a feeling of lushness.
  • Years Gone by: Create a theme of fifties, sixties or seventies to add a little life to the party. Guests come dressed in theme. Decorate with items from the time gone by. Vinyl records, muscle cars, drive-ins, create the appearance of going back in time!
  • Outdoor Theater: create the effect of the outdoor drive in by hosting a movie outdoors!

Summer Projects

Making a summertime memory doesn't have to be done in a day. Taking on a family project like a garden or a family craft that can be used as a gift later in the year can be a great way to bond together as a family.

We would love to hear about your ideas for taking on a project with your family. Your ideas contribute to the Vacation Planning Guide!

Disney has a website with some great family fun activities. From building a clubhouse to starting your own pumpkin patch there are some great ideas to start your family project. Combining learning and play family activities can be designed with a larger purpose in mind!

Crafts can also be a great way to let your children explore their creative side while having a barrel of fun.

Backyard Nature Crafts Who needs to purchase craft supplies? Nature can provide them just by exploring your own backyard!

Backyard Forts: Is building in your plans? Find all the how-to's here with lots of great ideas from forts to playhouses!

About.Com offers a great list of fun ideas to try for crafts and summer projects. Check it out!

Tell us about your fun projects!

Back to Vacation Guide

Great Summer Games for the Whole Family

They say the family that plays together stays together. Remember the games you used to play as a child? As a culture, we have become so accustomed to being entertained, that we have lost touch with all the great interactive games of old. Here are some ideas we found on various game sites to get you started; we encourage you to share yours as well:
Ring Toss - All you need is a stake and some "rings" to toss. Horseshoes would work just as well.

Mother May I? - The adult can play the part of the "Mother" who instructs the children to take steps, or hops, towards her. For example the "Mother" could say "Take five baby steps towards me." or "Take two bunny hops towards me." Meanwhile the child she speaks to must reply with "Mother may I?" before proceeding, otherwise they are kicked out of the game. The last child standing or first child to reach "Mother" wins.

Treasure Hunt - In the mood for some summer adventure? Organize a game of treasure hunt. You draw up a map and burying the treasure throughout the yard. You can leave small mounds of dirt where each treasure is buried to make it easier for the kids to find the buried treasure. Or you could mark the area around the buried treasure as another way of giving your kids a hint. The actual treasures can be things like marbles, beaded necklaces, quarter machine toys, coins, and other small objects.
Scavenger Hunt - What could be more fun than going on a scavenger hunt? Scavenger hunts can be simple or hard depending on the "clues". Simple clues would be "Find something blue.", "Find something soft.", or "Find something shiny." Harder clues could be made up using a combination of two easy clues "Find something blue and shiny." You can divide the teams up with one adult and one child per team. Whoever finds the most items or finds them all first wins.

Hide and Seek - The ultimate hunting game has always been "hide and seek". One player is the counter who must cover their eyes while the others hide. The player who is found first becomes the counter during the next round. Adults can easily participate in a game of hide and seek, either as an individual game or as a team game with their child.

Kick Ball - With just a ball and a few family members you can have hours of fun and competition playing this variation of baseball. Instead of hitting a small ball with a bat, you kick the ball and then run the bases!

Egg Relay
- Two spoons, one egg, are the basics of the classic egg relay game. To play a game of egg relay with adults and children you can have the adults line up in a row and the children line up in another, facing each other. Give each child a spoon with a boiled egg and have them race to their adult partner meanwhile trying not to drop their egg. The first one to reach their assigned adult wins. Then you play again allowing the adult to carry the egg on the spoon back to the child.

Three Legged Race - The three legged race is a classic summer barbeque game where two people tie one of their legs to the other and race to the finish line. This game can be played by both adults and children though I would not recommend mixing the two unless the child is older or the adults understand that they need to keep pace with the child and not the other way around.

Water Balloon Toss - Looking for a way to cool down at your summer barbeque? A game of water balloon toss may be just what you need to cool off during the warm summer months. Two people stand within feet of each other and one tosses their water balloon over to their partner who in turns catches the balloon. If they are successful they each take one step back and repeat. If they aren't successful the water balloon bursts and someone has just managed to cool themselves off meanwhile being kicked out of the game. The last dry pair is the winner. Kids and adults can play this game together or separated by age group.

Tag Remember how much fun it was to play a simple game of tag? When kids of decades past wanted to play something fun outdoors, tag was always at the top of the list.
Hide-and-Go-Seek A favorite outdoor game from yester-year. Find a good hiding spot where no one else would think to look, and to make the game even more challenging, move to a new hiding spot after the seeker begins searching.

Ghosts in the Graveyard This outdoor game that kids loved to play on a moonlit night. One person was chosen to be the ghost, and everyone else hid in the yard. The ghost would begin counting, one-o'clock, two-o'clock, three-o'clock, and so on until shouting midnight! At that point the ghost would search the yard for kids to run after and tag. Once they were tagged they also became ghosts who went in search of those hiding in the bushes and elsewhere in the yard.

Looking for more great fun? Check out 50 Ideas for Old-Fashioned Summer Fun

Summer Vacation Planning Guide

Take a Break without breaking the bank!
Vacation is a time for taking a break from our routines of life to reconnect with the important things in life, like family and friends while taking time to unwind and get rejuvenated. Virginia Saves is here to help your family create a vacation to remember!

National Survey Reveals Important Income Protection Needs, and Opportunities, for Employees and Their Families

Monday, April 30, 2012
Jack Gillis, CFA, 202-737-0766
MC Guenther, Unum, 866-750-8686

Research by CFA and Unum shows workers know little about disability insurance, despite expecting financial hardship if unable to work
Once informed about employer-sponsored coverage, almost all workers
want this insurance and are willing to pay for it
Washington, DC – In a national survey of nearly 1,200 employees, the Consumer Federation of America (CFA) and Unum learned that workers know little about group disability insurance, even important characteristics of what coverage they may have.  But when given information about this financial protection benefit, nine out of 10 employees say they want this coverage and would pay for it.
In the CFA-Unum survey,  only 13 percent of all employees say they know "a lot" about this insurance, and less than half of those who say they have coverage know how much it costs (41%) or what its benefits are (47%). When given information about disability insurance, a very large majority (90%) say they want this coverage, and nearly as many (86%) say that, if required, they would pay half of a $30 monthly premium, with more than half (56%) saying they would pay all of this premium, to gain income protection.
"Almost all workers wisely want disability insurance protection and are willing to help pay for it," said Stephen Brobeck, CFA's Executive Director.  "But since only about one-third have long-term disability insurance, there is a huge gap between worker desire for coverage and the extent of actual coverage."
Group disability insurance provides financial protection to employees unable to work because of injury or illness.  Depending on the specific plan, within one week to six months after an employee stops working, he or she begins receiving payments equal to about 60 percent of his or her income.  About one-third of workers are protected by long-term disability insurance, whose monthly premiums – paid for by the employer, employee, or some combination – usually range between $10 and $30.
Employer-sponsored disability insurance provides income protection that is not available from workers’ compensation or Social Security Disability Insurance.  Workers’ comp is available only to those employees who are injured or made ill on the job, but the large majority of injuries and illnesses causing work loss are suffered away from work.  Social Security Disability Insurance benefits average only $13,000 a year.
"The ability to earn a living – our income – is the most valuable asset we have, and protecting that asset is increasingly important,” said Thomas R. Watjen, president and CEO of Unum. “A disabling illness or injury can cause real financial hardship for many individuals and their families, and disability insurance creates a backstop against significant income loss during the period of absence, recovery and return to work.”
The high value employees place on the availability of disability insurance, and their personal desire for insurance coverage, certainly reflect the fact that most workers say they would suffer financial hardship if not able to work.  More than three-quarters of all employees (77%) say they would suffer great or moderate financial hardship if they did not work for three months because of injury or illness, with half (50%) indicating great hardship.  And more than three-quarters (78%) say they would experience great financial hardship if they did not work for 12 months.
Lower-income workers are much less likely to have access to disability insurance coverage, but are more likely to want this coverage, than are upper-income workers. Fewer than half (46%) of employees with household incomes under $25,000, but 80 percent of those with household incomes of $100,000 or more, say that their employer offers disability insurance. Yet, 72 percent of the lower-income group, but only 51 percent of the upper-income group, say that it is very important to them personally to have this insurance coverage.  And lower-income workers are nearly as willing as higher- income workers to pay for this coverage.
"As an employer, I consider group disability insurance to provide important income protection for our employees,” said Brobeck.  “This insurance complements and supplements better-known workers’ compensation and Social Security Disability Insurance programs. The Consumer Federation of America believes that consumers, most of whom rely on wages and salaries for purchasing power, would be well-served if all employers offered employees the opportunity to purchase disability insurance."
Additional highlights of the CFA-Unum survey include:
Employees Lack Knowledge About Reasons for Disability, Disability Insurance, and Their Own Insurance Coverage
    Employees don’t understand the reasons for disability that result in time away from work, underestimate the extent to which workers will miss work, and know little about group disability insurance, including the coverage they may currently have.
    • Nearly twice as many employees think that injuries (66%), not illnesses (34%), keep employees from work for at least three months, but the large majority of all disability claims paid are for illnesses and health conditions.
    • Employees think that 25 percent of those who become disabled and are unable to work for at least three months remain disabled for at least two years.  But in actuality, it’s twice that. Half of the disabled workers who are out of work for three months remain disabled for more than two years.
    • Only 13 percent of employees say they know "a lot" about group disability insurance, while just over one-third (35%) say they know only "a little." More than half (52%) say they know "not very much" or "nothing at all."
    • Among employees who think they are covered, fewer than half say they know how much it costs (41%) or what the benefits are (47%), and little more than three-fifths (63%) say they know whether they "pay any or all of the monthly payments."
    Employees Support Policies to Increase the Availability and Quality of Group Disability Insurance
      Because employees strongly support the value of group disability insurance for all employees and for themselves personally, it is not surprising that they support policies to increase its availability and quality.
      • More than three-quarters of employees (76%) say it is a good idea for employers to automatically enroll employees in a disability insurance program that these employees could decline only at the outset and annually thereafter.
      • When employees are informed that small employers are least likely to offer disability insurance, a large majority (71%) favor "the federal government providing these employers a one-time tax incentive to help them create a group disability insurance option."
      • More than three-quarters (77%) favor the creation of "independent standards that were used to evaluate individual employer plans."  Despite the ambiguity of the question – what are the standards and who creates and enforces them? – most employees said these standards are a good idea.
      The CFA-Unum survey was administered by Opinion Research Corp International (ORC) over three weekends in late March and early April this year by cell phone and landline.  ORC interviewed 1,191 full- and part-time employees who are broadly representative of the population of all employees, then weighted the survey data to more exactly represent the characteristics of all employees.  The margin of error of the aggregate data is +/- 3 percentage points.  Additional information about the survey methodology, and the survey data themselves, are available on request from CFA.  Also available is a CFA-Unum report on the survey data, "Employee Knowledge and Attitudes About Employer-Provided Disability Insurance."
      CFA is a non-profit association of nearly 300 consumer groups that was established in 1968 to advance the consumer interest through research, advocacy, and education.  Unum (NYSE: UNM) is a leading provider of employee benefits in the United States and the United Kingdom. In the future, the two organizations will seek to increase consumer, employee, employer, and policymaker understanding of group disability insurance through dissemination of these survey findings and related information.

      Courtesy of  CFA and Unum 

      What every student should know about summer jobs and taxes

      What every student should know about summer jobs and taxes 

      Do you have a summer job during your time off from school? Do you know that you have to pay tax on the
      money you’re earning from that job? Here are a few tips about earning money and paying taxes.

      • Be sure you fill out Form W-4, Employee’s Withholding Allowance Certificate. Your boss uses this form to determine the amount of tax to withhold from your paycheck. If you have more than one job, you should
      make sure all your employers are withholding enough taxes to cover your total income tax liability. To
      ensure your withholding is correct, visit the IRS Withholding Calculator on

      • When determining how much income to report, include all the money you earned while working. This
      usually means wages, salaries and tips.

      • In some jobs, like waiting tables, you may receive tips from customers. Tips are considered income, just like your hourly wages. Therefore, you must pay tax on them. This includes tips customers give you directly, tips customers charge on credit cards and your share of the tips you split with your co-workers. For more
      information about reporting your tips, read Publication 531, Reporting Tip Income.

      • Are you doing odd jobs like babysitting and lawn mowing? These jobs are considered self-employment, and the money you earn is taxable. It’s important to know whether you are considered self-employed or a wageearner. You can get more information about this on the IRS website.

      • If you have net income* of $400 or more from self-employment, you will have to pay self-employment tax.
      This pays for your Social Security and Medicare benefits, which are normally paid for by withholding from
      wages. The self-employment tax is figured on Form 1040, Schedule SE. *Net income is the money you
      earned after any deductions — such as business expenses — have been subtracted.

      • Generally, newspaper carriers or distributors under age 18 are not subject to self-employment tax. See the
      special rules that apply to services you perform as a newspaper carrier or distributor if you are considered a
      direct seller and should be treated as self-employed for federal tax purposes.

      • If you are in the ROTC and participated in advanced training, the subsistence allowance you received is
      not taxable. However, active duty pay — such as pay received during summer advanced camp — is

      Now that you’re working this summer, you may be wondering whether you’ll have to file a tax return. The
      answer depends on a number of factors  from how much you’re making to whether or not your parents claim you as their dependent. You can read the rules and dollar thresholds in Publication 501, Exemptions, Standard Deduction and Filing Information, or use the IRS interactive tool to find out.
      To learn more about taxes, including how you might qualify for a tax credit to pay for college or other qualifying education, visit Tax Information for Students on


      Understanding Taxes – The Hows of Taxes shows you how to apply tax principles, while the Whys of Taxes explains tax history and theory.

      Courtesy of IRS Outreach Corner

      Saving Tips

        Southeast Rural Community Assistance Project's Savings Tips

      ·         Save your loose change. Putting aside fifty cents a day over the course of a year will allow you to save nearly 40% of a $500 emergency fund.

      ·         Keep track of your spending. At least once a month, use credit card, checking, and other records to review what you’ve purchased. Then, ask yourself if it makes sense to reallocate some of this spending to an emergency savings account.

      ·         Never purchase expensive items on impulse. Think over each expensive purchase for at least 24 hours. Acting on this principle will mean you have far fewer regrets about impulse purchases, and far more money for emergency savings.

      ·         Use debit and credit cards prudently. To minimize interest charges, try to limit credit card purchases to those you can pay off in full at the end of the month. If you use a debit card, don’t rely on an overdraft feature to spend money you don’t have. With either approach, you’ll have more money available for emergency savings.

      ·         Are you looking for an effective way to establish a budget? Beginning on the first day of a new month, get a receipt for everything you purchase. Stack and review receipts at the end of the month, and you will clearly be able to see where your money is going.

      ·         It pays to practice preventative dental care, since a good cleaning routine helps prevent fillings, root canals, and dental crowns, which are expensive and no fun.

      ·         Most people don’t track what they spend and may not realize when expenses add up to more than their budget can handle. To keep track of what I spend, I put what I think I should spend for the month on transportation, food, entertainment, etc., into envelopes. This helps me avoid buying things I don’t need, and what’s left over goes into saving.

      ·         Take advantage of discounts and/or incentive programs provided through your employer. For example, the company I work for offers discounted rates for computers, fitness center memberships, movie tickets and passes to summer festivals. Check your corporate intranet or talk to your human resources representative. And don’t forget the best deal of all – investing in your 401 (k)!

      ·         One way to establish a savings discipline is to “save” an amount equal to whatever is spent on nonessential indulgences. Put a matching amount in a cookie jar for expenditures for beer, wine, cigarettes, designer coffee, etc. If you can’t afford to save the matching amount, you can’t afford the $4 super almond low-fat latte.

      ·         Take the amount the item costs and divide it into your hourly wage. If it’s a $50 pair of shoes and you make $10 an hour, ask yourself, are those shoes really worth five long hours of work? It helps keep things in perspective.

      ·         Aim for short-term savings goals, such as setting aside $20 a week or month rather than long term savings goals, such as $200 over a year. People save more successfully when they keep the short-term goal in sight.

      ·         Save money by buying items online, in bulk. Some companies even offer free shipping on large orders. Clearance items are sometimes available, and good savings can be found on non-perishable groceries and diapers. This saves time and money!

      Courtesy of Southeast Rural Community Assistance Project, Inc.

      Stair-Step Spending

      We often talk a great deal about the need to save. I wanted to share an article by Syble Soloman on "Stair-Step Spending" which also reminds us to enjoy life but be financially frugal too. This is also good information when planning family vacations! For full story click here.

      Courtesy of Inspired Savings Syble

      Getting Gassed!

      Getting Gassed!

      If you are like the average American, you use your car to transport yourself almost everywhere.  You drive to work, to school, to buy groceries, even for a quick getaway.  According to the US Department of Transportation Federal Highway Administration, the Average American travels an estimated 13,476 miles each year. 

      As the cost of gasoline continues to be volatile, families are feeling the pinch on their monthly spending plans.  It isn’t uncommon to hear around the water cooler that a fill up is costing $60, $70 or even $80 at the pump.  You are probably feeling it too.

      To find out what this really means for the household spending plan, Virginia Saves took a look at how much an increase of a gallon of gas might cost your family.  We analyzed various price increments in the cost of gasoline compared with the miles per gallon your car might get.  Certainly, if you can go farther on a gallon of gas, your costs are lower.  Assuming that we actually drive the average distances outlined above, if a gallon of gas increases $1.00 you could see a hit to your annual household spending of close to $900!  That is almost $75 each month.  The average driver has seen an increase this year alone of $20 per month in the cost of gasoline.

      Price Increase
      MPG/Cost Increase Per Year
       $       0.10
       $          89.84
       $    67.38
       $    53.90
       $    44.92
       $       0.25
       $        224.60
       $  168.45
       $  134.76
       $  112.30
       $       0.50
       $        449.20
       $  336.90
       $  269.52
       $  224.60
       $       1.00
       $        898.40
       $  673.80
       $  539.04
       $  449.20

      With extra dollars taken away from your budget to pay for gas, we need to be all the more vigilant in maintaining control of expenses.  This money could have been spent on increasing your savings, reducing your debt or paying for the other components of your monthly expenses.  Here are some ideas to help you save more at the pump discovered at

      1.       Drive sensibly: can increase your MPG 5 – 33% (.18 – 1.20/gallon)

      2.       Observe the speed limit:  can increase your MPG 7 - 23% (.26-.84/gallon)

      3.       Keep your car maintained:  can increase your MPG up to 4% (.15/gallon)

      4.       Maintain properly inflated tires: can increase your fuel MPG up to 3% (.11/gallon)

      5.       Use recommended grade of motor oil: can increase your fuel MPG up to 2% (.04/gallon)

      6.       Avoid unnecessary idling: can cost you up to 3 cents per minute without AC and 4 cents per minute with AC on.

      7.       Remove unnecessary weight from your car:  unloading 100 lbs could save you .04 - .07 per gallon

      8.       When replacing your vehicle look at the fuel economy rating to get more MPG and save you $$$.

      9.       Where possible combine trips to cut down on miles travelled.  Pick up the groceries on the way home from work rather than making a special trip. 

      10.   Walk or bicycle where possible.  This is a great way to cut costs and improve your physique!

      Tell us how you are coping with the increased costs in fuel and how you are adjusting your spending or activities to make ends meet!  Your ideas can increase savings for everyone!

      Courtesy of Lori Irwin