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This Week in Your Wallet: myRA Is Underway & Why You Should Ask For More Pay

It’s week three of my 52-week savings plan. If you haven’t jumped on board yet (but like the idea of amassing nearly $1400 this year) you can catch up by saving $6 this week.  If you’re already there, here’s another tip to keep you going.

Week 3: Save $3

Total Savings $6

Get visual. Okay, so you’re on board. But do you know why you’re doing this? Do you have an actual picture of what you’re saving for in your mind? You should, because research shows that when we actually have an image of our goals, we’re more likely to meet them. For many of you, I’ll bet this challenge is a great way to build an emergency cushion. So maybe the image is you looking more relaxed — and less stressed out — about money than you do right now. But maybe you’re doing this so that you can take a trip next winter, or so you don’t have to float the 2015 holidays on a credit card. Whatever. If you can see it, you can be it.

Ready, set, myRA!

And while we’re on the topic of saving…if your employer doesn’t offer a retirement plan (or pension) and your savings are getting the short end of the stick, now you can try myRA, the new retirement savings account backed by the federal government and geared towards millions of workers like you. (Note: It’s also available to supplement existing 401(k)s for married couples earning less than $191,000 a year, and for individuals earning less than $129,000 a year.)

We first heard of myRA in last year’s State of the Union address — and as of last month — it’s now a reality. For workers at companies that decide to offer myRAs: CNNMoney says if you’re enrolled in direct deposit for your paychecks, you can sign up and start saving today. You can open an account with just $25, and contribute as little as $5 per paycheck. Your money will be invested in the same government bond fund used for the federal employees’ Thrift Savings Plan, which means you — the investor — will never lose principal. And similar to a Roth IRA, you can withdraw your earnings tax-free in retirement, and at any time without penalty.

It’s important to note, though, that with myRA accounts, you shouldn’t expect to see stellar returns (especially if interest rates continue to stay low). The 10-year average annual return on this investment is 3.6%. While you can contribute up to $5,500 a year, your account can’t exceed $15,000 total. When your account hits $15,000 — or it’s been open for 30 years — it has to be rolled over into a private Roth IRA. See more on myRAs here.

Why you should ask for a raise

Here’s some good news: Research from Mercer says the average employee should see a salary bump of 3% this year. (Top performers, or company MVPs, can expect 5%.) At the rate we’re creating jobs, unemployment is expected to drop to 5.4% come 2016 — and instead of employees stressing about losing their jobs, 57% of employers are stressing about keeping their employees. This is up from 20% in 2010, according to PayScale.com’s Compensation Best Practices Report.

The tables are turning in the right direction, making this year a good one to go for a raise. This Money.com piece offers a step-by-step plan for sealing the deal. Step one: Pencil yourself in on your boss’s calendar ASAP. Take the early bird approach and don’t wait until performance-review time to ask for the raise. If you wait, you can expect more competition from coworkers, and possibly a finalized budget (for the year) that doesn’t allow room for the raise you want. Yes, asking for more money can be downright uncomfortable, but know that it’s worth the nerves. A recent PayScale survey found 44% of people who went for a raise received exactly what they asked for. Plus, another 31% of people received the raise, too — it was just less than what they were shooting for.

Is it time to dump your data plan?

How much data do you use and how much are you paying for? If you don’t know the answer to either question, then it’s time to tap into your phone plan to see if you’re overpaying. As I reported on Today last week, 86.5% of consumers buy more data than they need. So if it feels like you’re living in data-draining hell — or are experiencing a little something I like to call “bill creep” — then look to my new article on RetailMeNot.com on how to find the best data plan for you. Here, a few bytes to get you started:

To see how much data you’re using…Check your recent phone bill or see if your phone has a built-in data-tracking feature, like the iPhone does. Some providers offer calculators on their sites. You can check out Verizon’s here.

If you think you need unlimited data…know that the average person uses 1.5GB a month.

And if you still think you need unlimited data…know that the speed at which you access your data can be limited. You might get “unlimited data,” but only a small percentage of it will be high-speed. The FTC recently called out AT&T for charging customers for unlimited data while reducing their data speeds by up to 90 percent. So make sure to check how much high speed data your unlimited plan allows.

For mega savings…check out third-party carriers (or MVNOs, mobile virtual network operators) like FreedomPop, Virgin, Republic Wireless, Boost Mobile, which buy service wholesale from big carriers and resell it for a fraction of the price you’d pay at the bigger companies. See the rest here.

Go generic to save

A $10 co-payment for a 30-day supply of drugs sounds like a pretty good deal, but $4 for the same supply is even better. You can save the $72 this year by going generic. Switching to the generic version of your prescription medication (pending your doctor’s approval, of course) is a major way to save money on your meds. In fact, generic drugs can cost as much as 80% less than their brand-name equivalents. This week Kiplinger lists a few pharmacies (i.e. Walmart and Target) that charge as little as $4 for generics, and tells you how to price compare before handing over your insurance card at the counter.

Have a great week,

Jean

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