I “was” always a saver. I say “was” because I’ve been on Short Term Disability since 10/06/21 due to an off the job injury. What I did save will be depleted by the time I return to the job sometime after April.
Any Advice?
~ Marvina
Damon says:
Do you have short-term disability insurance?
Here’s the great thing: The fact that you had money saved helped you during this time while your paycheck was reduced or interrupted! THANK GOD you saved!!
Secondly, your savings will not be depleted until you return to work. THANK GOD you saved!!
What should you do? I don’t know the full story. But I’ll offer up this advice:
Get Healthy: Full recovery is the focal point here. Once you’re fully recovered and able to return to work earning an income—problem solved.
Keep spending to the bare minimum: Extending the longevity of your savings when you’re no longer making any deposits boils down to spending primarily on necessities only.
Essentials first: If it gets to a point, where you can’t pay for everything – cover these expenses first in this order – food, housing, utilities, basic transportation.
Contact Creditors: If need be, contact creditors and inform them of your temporary disability. Ask if they have any programs available to defer payments for a month or two with no negative impact to your credit. Only employ this method if things get REALLY tight, because in the end, you’ll still have to pay.
Upon returning to work, continue to save: If you don’t have short-term or long-term disability insurance – you need to get it. You’re more likely to become disabled than you are to die over a 30-year working career. The cheapest place to get both short-term and long-term disability insurance is through your job. Most companies had a benefit open enrollment period in the month of October. You may have missed out this year. You can get both through private insurance. We can discuss details of this offline
Get well!! Wishing you a speedy recovery!!
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Can you explain the pros and cons of a Savings Account? Also, what Banks do you recommend to get the most for your savings?
~Christina
Damon says:
Cons: Ridiculously low interest rate! You’d be hard pressed to find any savings account paying more than .5 percent in interest. The ROI (Return on Investment) Sucks!!!!
The good thing when it comes to saving, you’re not overly concerned about the ROI. Your primary concern is ROP (Return of Principal) or return of the money you saved in full.
Saving is the cornerstone of sound money management. It fosters financial stability, financial security, and financial independence. If you want to flex your money muscles, you do so by saving money.
It’s important to note that saving money and investing money are two separate categories. They’re categorized based on the Time Horizon—the window of time you have before you need to spend your money.
Any saving goals where the time horizon is 5-years or less, stashing money in a savings account, money market account, credit union, or online banking saving account is the best practice.
Any saving goals where the time horizon is greater than a 5-years, you can consider parking this money in the stock market using something like Index Funds where return on investment is upwards of 10 percent.
Pros: Liquidity: Meaning money in a savings account is readily accessible to you. Both Banks and Credit Unions have insurance on savings up to $250,000 per individual.
You develop the habit of savings: It’s nice to watch your money pile up in the account plus you have money parked in a savings account when you need it for things like emergencies, vacation, large purchases etc.
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Question big bruh, within the next couple weeks I will be leaving my job where I have a Pension to a new company that doesn’t offer a Pension. What’s the best place for me to place the money that I’ve built to keep it growing?
~Manny
Damon says:
It’s a pension or a 401(k)? Pensions have vesting rules and in many cases are not as portable as a 401(k).
It’s definitely a pension.
~Manny
Damon says:
If the plan allows, do a Direct Rollover into an IRA – Individual Retirement Account. This means no money is given to you. The check is cut from the Administrator of the Pension Plan to the new Discount Brokerage Company you will use to establish an IRA. By not doing a Direct Rollover and having money made payable to you directly, you subject yourself to potential tax consequences. There’s also a good possibility you’ll spend some—if not all of the money, in effect stealing money from your future self. You’ll have more investment options and more control over your money in an IRA.
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If you don’t want someone to claim your kids would it be a form for that? My daughter has form 8332. I don’t think that’s the right form
~ Tanisha
Damon says:
I don’t know of any forms. But here’s the general rule: It’s who files the tax return and claims the child first who will receive the tax benefits of the child. The second person who tries to file the tax return and claims the child will be flagged, causing delays in processing the tax return. By law, it’s the Custodial Parent who provides more than 51 percent of the child’s care who has legal authority to claim the child.
(Damon Carr, Money Coach can be reached at 412-216-1013 or visit his website at www.damonmoneycoach.com)
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