This Week in Your Wallet: Are You Missing a Billion?
Earlier this month, I spent a fun weekend (Mother’s Day, actually) with my kids in Chicago. My son is in college there and although I usually stay at a hotel within walking distance of campus, this time I got shut out. I stayed about a 10 minute drive away instead.
Did I rent a car? Nope. I thought about it – looked at prices — and decided to rely on Uber for the weekend instead. I haven’t been a huge Uber user in and around my NYC base. The price of cabs these days makes me angry, so I try to take the subway (or walk) as much as possible. But Uber has occasionally bailed me out of a long taxi line. (Once, after waiting outside Penn Station for a cab for 10 minutes in a line that didn’t move, I Ubered – yes, it’s a verb – and watched a smart, waiting driver pull a u-turn to pick me up.)
Then, as during my Chicago weekend, Uber was a pleasure. The drivers were friendly, the cars were clean, and the prices seemed reasonable. One of our errands that weekend was to buy a bike at a cool place called The Recyclery, which refurbishes donated bikes and sells them at prices that are no where near new. (Does it make sense to buy a new bike on a college campus where thefts are all too frequent? No, it does not.) Uber came through in 5 minutes with a vehicle large enough to get it back to my son’s house.
Anyway, I tell you all of this because Uber got in touch with me and asked me if I’d like to give all of you a promo code for a free ride worth up to $30. I said, absolutely! So, here you go. I hope your experience is as good as mine. Click here for the code: Uber Promo Code.
Are You Missing A Billion (Or 24?)
$24 billion. That’s the amount of money workers are leaving on the table in untapped 401(k) matching dollars. Roughly 25 percent of Americans are missing out on their full company matches by not saving enough, according to a new study from Financial Engines, an independent investment advisory firm. As The Wall Street Journal reports, employees who fall short leave an average of $1,336 on the table each year (for a grand total of $24 billion altogether).
If that’s you — and you’re not at a place where you can comfortably save more to get that match — then commit to saving some or all of your future raises and bonuses. Or, if your company has an “auto-escalation” program that automatically ups your savings rate once a year (usually by a percent or two of your salary), then having the decision made for you might do the trick.
Either way, it’s important to understand how your company match is designed — and to work towards it. Here’s why: If a 25-year-old starts saving 6 percent of his or her salary, pockets a full match of 3 percent and reaps a 5 percent annual return (we’re assuming, that is), then he or she will have well over $480,000 by 65 years old. Without the match, it’ll amount to 33 percent less, or $320,000 total. Saving something is better than nothing, of course, but having that company match can be hundreds of thousands of dollars better.
Think In Days, Not Years
If your savings efforts could use a boost (or a kick in the behind), then consider changing the way you think about time. A new study published in the journal of Psychological Science finds one way to boost savings (or any goal for that matter) is to reframe your conception of the future. Instead of viewing the future as far off in the distance, think of the future as right now.
Hmm, sounds easier said than done — and wait, haven’t we heard this before? Yes, yes to both. (Humans aren’t really hard-wired for the whole delayed gratification thing that comes with long-term goals. We prefer immediate gratification.) But, as MONEY reports, this research takes it a step further by suggesting how you can retrain your brain. The trick? With long-term — aka future — savings goals, assign deadlines for them in terms of days rather than years.
Take one part of the study, for example, in which participants were asked when they would start saving for their hypothetical newborn’s college education. Some were told they had 18 years, while others were told they had 6,570 days. (If you do the math, both are the same amount of time.) Though the participants who were thinking about their deadlines in days said they would start saving four times sooner than those thinking in years. So, instead of saying, “I want to have $30,000 worth of emergency savings in the next five years,” reframe the future and say, “I need to save $30,000 in 1,825 days.” And you can chunk it down by automating $125 into your rainy-day account every seven days. The bottom line: the longer you think you have to accomplish a goal, the easier it becomes to procrastinate. Sidestep the procrastination by channeling a little immediacy.
How To Deflate Your Car Insurance Bill
When was the last time you asked your car insurer if you’re eligible for a discount? I ask, because new data from insuranceQuotes.com shows only 16 percent of Americans have asked for the most common discounts. This means many of you might be paying more for car insurance than you need to be. It’s not your fault — or an oversight per se. Laura Adams, insuranceQuotes.com’s senior analyst, says people aren’t asking, because they don’t know these discounts exist. And if they’re listed anywhere in the pamphlet or online, don’t be surprised to find them in the (very) fine print.
The discounts will depend on the provider, of course, but some common ones that need to be self-reported have to do with your mileage, marital status, occupation, academic standing and defensive driving skills. “You literally have to raise your hand and ask for them [discounts], because they’re not going to know about you and the changes you’ve had in your life,” says Adams.
For example, if you’re driving less, because your commute changed, and you’re down to 5,000 miles a year, then you’ll pay an average of 8 percent less than someone who puts in 15,000 miles. (The savings for mileage will vary by state.) Insurers also charge less if you’re married. But again, only 13 percent of Americans let their carrier in on the nuptials. As for occupations, teachers, nurses and accountants are all viewed as safer drivers — and can save money because of it. Adams suggests picking up the phone or emailing your agent and asking, “What else might I qualify for?” Or, “Hey, can you send me a list of your discounts?” From there, make it an annual conversation so that what you’re paying reflects any favorable (and possibly fruitful) changes in your life.
Have a great week,
Jean
