Living paycheck-to-paycheck may be perhaps one of the most exhausting lifestyles out there. An unforeseen emergency may put you in debt when there’s nothing left to use in the bank at the end of every month. This can lead to you not just living from one check to another, but now you’ve also got a credit card bill to pay for. [Read more…]
Every Homeowner Should Have Flood Insurance-Here’s Why!
No homeowner imagines being the victim of a natural disaster. A serious flood can be devastating. Floods can damage your home and personal property with surprising speed. However, not having flood insurance can make the entire situation worse. Without the right coverage, your losses may not be covered. If you’re wondering why every homeowner should have flood insurance. Here’s what you need to know.
What Flood Insurance Is and What It Covers
Flood insurance is a type of coverage that is separate from a traditional homeowners insurance policy. Anyone who lives in an area with flood risk can potentially purchase this supplemental policy.
It specifically focuses on flood-related damage caused by natural disasters, as well as other causes. Usually, flood insurance covers damage in specific categories.
First, flood insurance will commonly handle structural damage to your home. This includes the actual building, as well as some related systems, like electrical, plumbing, and HVAC.
Second, flood insurance may cover your personal property. This includes damaged furniture that isn’t salvageable and similar household items, as well as clothing. However, this isn’t always part of the starting flood insurance policy, so you may need to request it be added if you want this protection.
Now, certain high-value items may not be fully covered by base flood insurance. This can include art, antiques, jewelry, firearms, or electronics above a certain value. In those cases, you may need flood insurance riders to add that coverage, just as you do with traditional homeowners policies.
Additionally, it’s important to note that every policy is different. Before you make assumptions about your coverage, review your flood insurance policy carefully. Ask questions about what is and isn’t protected, and request add-ons if needed to provide you with the level of protection you’re after.
Why Homeowners Need Flood Insurance
Typically, flood insurance fills a gap that many homeowners have in the primary policy. While homeowners insurance does cover some types of water damage under the hazard insurance segment of their policy, flooding events usually aren’t classified as the covered kind of hazard. As a result, damage caused by a flood may not be covered, leaving you without financial support to repair your home or replace your personal property.
Essentially, if you don’t have flood insurance, you’ll have to handle all related costs out of pocket. For most homeowners, this simply isn’t feasible. Flood repairs to a structure can be incredibly costly. Similarly, replacing all of your damaged personal belongings could take thousands and thousands of dollars.
It’s also important to note that homeowners with mortgages who live in higher-risk areas may be required by their lender to have flood insurance. This is especially true for anyone who uses government-backed financing sources, as there are federal laws requiring the coverage for properties they finance in high-risk zones. However, other lenders often follow suit, even if there isn’t a legal requirement.
The mandate for flood insurance through a company like this Minneapolis water damage restoration service, is similar to them requiring homeowners insurance in general. It ensures the property is protected should a flood event occur and, since the lender is technically the owner until you pay off the mortgage, they have a vested interest in protecting its value.
How to Find Out if You’re in a High-Risk Flood Area
If you want to see if a property is in a high-risk flood area, the simplest way is to use the Federal Emergency Management Agency (FEMA) Flood Map Service Center. Simply enter your address into the search bar, and the site will display a map that identifies your home’s risk level.
You may be able to turn to other state and local resources as well. State emergency management agencies may have flood maps, for example, so they can be worth checking if you find the FEMA results lacking.
Should Low-Risk Property Owners Skip Flood Insurance?
No, homeowners in low-risk areas shouldn’t skip flood insurance. Even if you live in a low-risk area, going without flood insurance means you aren’t protected should the unexpected occur.
Low-risk doesn’t mean risk-free. Many natural events are unprecedented. But even if they weren’t deemed likely, your base homeowners policy won’t cover the related damage if it is excluded in your policy.
Additionally, risk levels can change over time. An area that wasn’t previously flood-prone can suddenly become so for a variety of reasons. Climate change, land development, and similar shifts can alter water flow through regions, turning areas that previously didn’t experience flooding into moderate or high-risk areas.
Where to Get Flood Insurance
If you need flood insurance, you can call your homeowners insurance company to see if they offer it. Some insurers have flood insurance riders, while others may require a separate policy for that specific kind of coverage.
However, not all insurance companies offer flood insurance. If that’s the case, you may not be able to secure flood insurance through your homeowners policy provider. Instead, you’ll turn to the National Flood Insurance Program, a system run by FEMA, that can help you find a provider that covers homeowners in your area.
Do you think every homeowner should have flood insurance? Have you decided to risk it and go without flood insurance? Has flood insurance ever saved you from financial hardship? Share your thoughts in the comments below.
Read More:
- Which Life Insurance Fits Your Needs Best
- Top Reasons You Need Car Insurance
- Is Cheap Insurance Worth It?
Tamila McDonald is a U.S. Army veteran with 20 years of service, including five years as a military financial advisor. After retiring from the Army, she spent eight years as an AFCPE-certified personal financial advisor for wounded warriors and their families. Now she writes about personal finance and benefits programs for numerous financial websites.
What’s Up With Oil?
Oil is in the news a lot right now because of what’s currently happening on the East Coast of the United States. There was a hack of an oil pipeline, and the hackers have since been identified, but the consequences of that hack are being felt by the company and by consumers.
Due to the hack, the pipeline shut down. This pipeline provides the East Coast with nearly half of its gasoline and jet fuel. As a result, gas, and oil prices have gone up, there are gasoline shortages, and consumers are behaving erratically. Some are hoarding gasoline. Others are chasing down supply trucks and are behaving in a way, akin to when an animal’s food supply is threatened.
With all that said, I do want to talk about oil today. Not just the recent news about the hack, but also the price of oil, the supply and demand dynamics, and what my thoughts on the future of the precious fossil fuel are.
Oil Price, Supply and Demand
The price of oil is back to pre-pandemic levels. Back in the early days of the pandemic, however, there was a tremendous shock to the system. Oil prices dove into negative territory because demand projections dropped.
Everyone started staying home due to Covid and mandatory quarantines, so demand dried up. A lot of analysts said that pre-Covid was peak oil demand. More people are going to work remotely, which means less commuting and less consumption. More businesses are going to conduct meetings via Zoom instead of flying to different locations, which also means less consumption.
Do I think the “pre-Covid era” was peak oil demand? I think so, but it’s difficult to say with certainty.
The future of oil
I do believe, however, that the overall demand for oil will trend down going forward. With that said, oil producers are focused on their bottom line. If they see demand trending down, they’ll be inclined to reduce production to protect the price per barrel from plummeting.
There’s another force at play here – clean energy. We will continue to see start-ups and agile new companies bring new technology to market. I think the runway for clean energy, in terms of growth and return potential, is very large. However, don’t count out the big energy companies quite yet.
These companies (Exxon, BP, Chevron, and the like) have been investing a lot of money in green/clean energy. They see the forces at play and they see the direction in which the market is going. It’s in their best interest to plan for an energy market dominated by renewables.
How should we invest?
That’s a good question and due to regulatory constraints, I can’t tell you specifically. Do I think there’s a place for oil in your portfolio? Maybe in the short-term, but not for long.
Investing in energy will be more nuanced than it has in the past. Big oil companies, as I mentioned, are investing in clean energy, but I believe renewable startups and green energy companies will attract the majority of investment.
Keep up to date with what’s happening in the energy market and do your due diligence when it comes to selecting investments.
Related reading:
Inflation, Gold, Semiconductors
**Securities offered through Securities America, Inc., Member FINRA/SIPC. Advisory services offered through Securities America Advisors, Inc. Securities America and its representatives do not provide tax or legal advice; therefore, it is important to coordinate with your tax or legal advisor regarding your specific situation. Please see the website for full disclosures: www.crgfinancialservices.com
My name is Jacob Sensiba and I am a Financial Advisor. My areas of expertise include, but are not limited to, retirement planning, budgets, and wealth management. Please feel free to contact me at: jacob@crgfinancialservices.com
What Is a PACE Loan and Are You Eligible for One?
When you want to update or upgrade a property, finding the right kind of financing options is often essential. For some property owners, PACE loans may be the perfect fit. However, it won’t work for everyone. PACE loans have unique benefits. Yet, they can only be used under specific circumstances. If you are wondering what a PACE loan is and whether you’re eligible for one. Here’s what you need to know.
What a PACE Loan Is
A PACE loan is a property improvement financing option that focuses on energy efficiency-related upgrades. PACE actually stands for Property Assessed Clean Energy, denoting the purpose of the program.
There are two segments of the PACE program. First, there are commercial PACE loans that focus on business properties. The second option is a residential PACE loan. This is also known as an R-PACE, that is available for qualifying residential projects.
With a PACE loan, the property itself serves as collateral, similar to what you’d see with a renovation mortgage, a cash-out mortgage, or other options many people pursue to finance improvements. However, with a PACE loan, you can finance up to 100 percent of the renovation costs, all without having to cover a down payment or go through a traditional underwriting process.
Plus, unlike those alternatives, the PACE loan is tied to the actual property, not the property’s owner. Since the loan is associated with the property, the remaining balance can be passed from one owner to the next if the property is sold.
Additionally, how a PACE loan is paid back also differs. Instead of the typical monthly payment approach, PACE loans are subject to property assessments. The assessments occur regularly over the course of a set amount of time, usually between five and 20 years, depending on the life of the improvements involved in the project.
The assessment functions similarly to a property tax. Once the assessment is complete, the property owner pays the identified amount. Failing to do so usually carries consequences that are a lot like what you encounter if you don’t pay property taxes.
PACE Loan Eligibility Requirements
The primary eligibility requirements for a PACE loan are two-fold. First, you have to be a property owner, not just a renter or lessee. Second, the updates must be energy efficiency improvement-related. This can include a wide range of project types, including solar panel installations, boiler upgrades, and LED installations, as well as for certain disaster preparedness purposes, like earthquake seismic retrofitting.
It’s also important to note that your project may need to meet a minimum cost requirement. For example, you typically have to borrow at least $2,500.
However, a few other factors may disqualify you. For example, being behind on your mortgage or property taxes, a recent bankruptcy, or liens or judgments on the property could prevent you from securing PACE financing.
Otherwise, you have to be in an area with an active PACE program. The PACE loans are usually administered by a local municipality or through a partnership between a government entity and a private company. They aren’t broadly available, particularly for residential property improvements.
It’s also important to note that you may have to choose from a select list of approved contractors. You’ll need to review your local PACE loan program to determine if only specific contractors are permitted.
How to Apply for a PACE Loan
If you want to apply for a PACE loan, you’ll need a loan servicer in your local area, as that may be the only entities you can work with based on how the programs are usually structured. Since these are administered at the local level, some of the application processes may vary.
However, applying tends to be straightforward and not completely unlike securing other kinds of renovation financing. You’ll need to provide details about yourself – including credit and wage-related information – as well as information about the property and your proposed project.
Once you submit that information, your eligibility is determined quickly. After approval, the funds are disbursed for the qualifying project in accordance with program rules.
Have you ever gotten a PACE loan? If so, what was your experience like? If not, do you feel it is a good option for you? Share your thoughts in the comments below.
Read More:
- Is It Ever Worth Buying Solar Panels for Your Home?
- Home Improvements That Can Save Money on Homeowners Insurance
- Prioritizing Home Renovations
Tamila McDonald is a U.S. Army veteran with 20 years of service, including five years as a military financial advisor. After retiring from the Army, she spent eight years as an AFCPE-certified personal financial advisor for wounded warriors and their families. Now she writes about personal finance and benefits programs for numerous financial websites.
Can an Employer Charge Fees to Turnover Your 401(k) After You Quit a Job?
Nobody wants to pay fees to turnover your 401(k). When you quit a job, you usually lose access to the various benefits your former employer provides. However, while the company may manage your 401(k), that doesn’t mean you don’t have a right to the funds. In some cases, you may even be required by your former employer to move the money out of their program.
While you may have the option of leaving your retirement savings in place, there are also benefits to rolling over your 401(k). However, you may be worried that your former employer will charge you a fee to make that happen. If you want to ensure you’re fully aware of the potential costs, here’s what you need to know.
Can an Employer Charge Fees to Turnover Your 401(k) After You Quit?
Generally, no, a former employer can’t charge a fee if you are rolling over your 401(k) into a new retirement account after quitting. They have to turn over the balance that belongs to you. At a minimum, this means your personal contributions, along with any vested matching funds from your employer.
Now, if you have a match from your employer but it isn’t fully vested, then the employer can keep that money. Until it vests, it isn’t technically yours. So, while losing the unvested match may feel like a fee, it actually isn’t.
It’s also important to note that you may have to contend with fees when you roll over your 401(k) from the company or program that is managing the receiving retirement account. All retirement programs come with costs, and they can vary from one program to the next.
However, there usually isn’t any fee to actually complete the rollover. Instead, the new account will come with unique maintenance and administration fees, commission costs, or similar expenses.
You may also have to deal with taxes or withdrawal penalties. When you are not of retirement age and choose to cash out your 401(k) when you leave your former employer, you’ll have to deal with both. If you are of retirement age, then you’ll bypass any early withdrawal penalties but will still owe taxes in most cases.
If you choose to roll over your 401(k), you may or may not have to pay taxes. That will depend on how the rollover is managed, as well as the kind of account receiving the funds.
Can You Keep Your 401(k) With Your Former Employer?
If you like the 401(k) program your former employer offered, keeping it in place may seem like a good idea. However, whether that is an option depends on the company’s program and policies, along with other factors.
With a 401(k), the employer is responsible for the program’s management, and that comes with costs. As a result, they may not want to shoulder that burden for former employees. Instead, they require them to transition the money out of that account and into another one, such as by rolling it over into a new employer’s 401(k) or an IRA.
Mandating that you move the funds is more common for 401(k)s with contributions made – and earnings achieved – during your time with that employer totaling to less than $5,000. It isn’t actually the balance that matters; it’s the amount of money added to your account while you were working for that company.
For example, if you rolled over a previous 401(k) worth $9,000 and then contributed $4,000 to the account while working with the new employer, your balance would be $13,000. However, only that $4,000 is factored into this decision process.
Contribution Factors
With contributions below $5,000, the expenses associated with managing the account may seem unreasonable to them, and they are perfectly within their right to tell you to move the money.
If the contributions are below $1,000, the company might just cut you a check for the balance. In most cases, this is something you want to avoid, as you’d end up owing taxes on the money and may also have to pay an early withdrawal penalty, depending on your age. Luckily, you usually have 60 days to transition the funds into a different kind of retirement account, giving you a pathway for avoiding the fees and taxes.
If the contributions are between $1,000 and $5,000, your former employer may even initiate an involuntary cashout. With this, they transition your money to an IRA of their choice, suggesting you don’t take other action. To avoid this, you’ll need to handle a rollover within 60 days, giving you the ability to choose the destination.
For accounts with contributions above $5,000, you can typically keep the money in place. This can be beneficial if there is a unique aspect of the program that you can’t get in your new employer’s plan or with an IRA. For example, if the fees are far lower than what’s common or there are investment options that are hard to access otherwise, it could be worth leaving the savings in place.
However, you won’t be able to make new contributions to a former employer’s 401(k) plan. Instead, it will simply exist as-is, only growing based on the investments themselves.
What It Means to Rollover a 401(k)
Rolling over a 401(k) simply means transitioning the money into a different retirement account. It isn’t a withdrawal, as you won’t actually gain access to the cash. Instead, it’s shifting the held assets straight into another similar retirement plan.
Generally, you have two options for rolling over a 401(k). First, if you have a new job with an employer that has a 401(k) or similar retirement plan, you might be able to roll over the money into that account. This would allow you to centralize and consolidate your 401(k) savings into a single place, which could make it easier to monitor and manage.
Second, you could roll over a 401(k) into an IRA. With this option, you may get access to a wider range of investment opportunities, have the ability to choose a company with a better fee structure, or, if you already have an IRA, consolidate some of your retirement savings.
With a 401(k) to IRA rollover, you will be responsible for overseeing the account. If you decide to roll over your 401(k) into your new employer’s program, they’ll handle most of the management, though you may still need to set asset allocations or make similar decisions.
Should You Rollover your 401(k)?
Whether you should roll over your 401(k) depends on several factors. First, it may not be optional, particularly if your contributions are under $5,000.
Generally speaking, if your 401(k) contributions are below $5,000, it’s wise to plan for a rollover. There is a decent chance the company may require it, so it’s best to prepare for that situation. However, if you like your 401(k) offerings and the company is fine with maintaining your account, you can always opt not to initiate the rollover.
If your balance is below $1,000 and your former employer would cut you a check for that amount, rolling it over is more urgent. If you don’t, you’ll owe taxes, as well as an early withdrawal penalty if you aren’t of retirement age.
For contributions above $5,000, then you’ll want to look at the virtues of the program. If it has a low fee structure, unique investment options, or other benefits you can’t get elsewhere, then you may want to leave it in place. If not, then exploring your rollover options is wise, as it may let you pay less in fees, access investments you can’t tap currently, and more.
Have you ever had an employer try to charge a fee to turn over your 401(k) after you quit a job? If so, what did you do? Share your thoughts in the comments below.
Read More:
- 7 Tips to Get the Most Out of Your 401k v/s Pension
- Investment Tips: How Much Should I Have in My 401k?
- 401k Withdrawal Taxes and Penalties
Tamila McDonald is a U.S. Army veteran with 20 years of service, including five years as a military financial advisor. After retiring from the Army, she spent eight years as an AFCPE-certified personal financial advisor for wounded warriors and their families. Now she writes about personal finance and benefits programs for numerous financial websites.
Inflation, Gold, Semiconductors
There are a lot of moving parts in the economy right now. Inflation has become a concern, people are looking at gold more as a hedge, and there’s a shortage in semiconductors. In this piece, we’ll explore some of those dynamics and what some of the investment implications are.
Inflation
Inflation will most likely increase. Many projections estimate the FED will meet/beat their target of 2%.
I do believe that an increase in goods and services will not affect demand as it would have in the past. Stimulus payments to consumers created enough excess cash that people didn’t mind, or even notice, an increase in prices.
I do realize I’m painting with a broad brush here, and undoubtedly there will be some that will notice the difference. I’m simply stating that demand will not suffer from price creep as it used to, at least while the government continues writing checks.
Gold
We could see another uptrend in gold. There’s a certain recipe that makes the case for a bullish perspective on gold – inflation pressures, increased money supply, and low-interest rates.
The FED continues to supply the market with liquidity with its asset-buying program. An increase in the money supply dilutes the value of the dollar (USD). When the USD decreases in value, typically gold does well.
There is a caveat to that, however. Demand for US Treasury securities is weakening, specifically from foreign investors. To double down on that, foreign investors are net sellers of Treasuries. There have to be enough buyers to meet Treasury issuance, otherwise, the FED won’t have enough “reserves” to inject liquidity into the system.
With regard to low rates, that is a good sign for gold, but it’s also a good sign for equities (companies) with a high tendency to borrow. I’m mainly looking at the technology sector. Especially these unicorns that have high valuations, but low (or negative) profits.
Semiconductors
There’s also a current market disruption at play here…semiconductor shortage. Demand across many applications are at multi-year, sometimes multi-decade, highs. Personal computers, electric vehicles, autonomous vehicles, AI, and the like all use semiconductors.
A semiconductor shortage has many implications:
- Decrease in production
- Price increase
- Nationalist mentality
- R&D disruption
A decrease in production can hurt the bottom line. It all depends on when the shortage ends. If production reduces enough for a sustained period, adjustments will have to be made by corporations.
A price increase is likely because of supply and demand dynamics. The price of semiconductors will go up, so the price of the products they’re used in will also go up. This could hurt demand for those products and could hurt consumers.
There are a select few companies that supply the majority of the world’s semiconductors. This could have a similar effect as Covid had with regard to supply chain management. Companies relied on global trade and cooperation to sustain their supply chain operations. When countries shut down due to the pandemic, global trade suffered as a result. Countries might shift to manufacturing their own semiconductors instead of relying on supply from trading partners.
Semiconductors are only getting less expensive and more efficient. With a shortage, and possibly less money coming into the manufacturers, it’s possible that this dynamic of cheaper and better plateaus…at least temporarily. It’s also possible that the shortage improves operations and makes the manufacturers more agile. Some countries have a very unique ability to progress, strengthen, and adapt when a roadblock presents itself.
With that said, I believe semiconductors will be a great investment opportunity. Their demand is only going to increase because of the push to provide the world with electric vehicles and clean energy. I would, however, pay attention to the shortage and I might wait until that shortage ends and prices stabilize.
Related reading:
Does Economic Inflation Favor Borrowers or Lenders?
What You Can Learn from Different Market Environments
**Securities offered through Securities America, Inc., Member FINRA/SIPC. Advisory services offered through Securities America Advisors, Inc. Securities America and its representatives do not provide tax or legal advice; therefore, it is important to coordinate with your tax or legal advisor regarding your specific situation. Please see the website for full disclosures: www.crgfinancialservices.com
My name is Jacob Sensiba and I am a Financial Advisor. My areas of expertise include, but are not limited to, retirement planning, budgets, and wealth management. Please feel free to contact me at: jacob@crgfinancialservices.com
Does The Economic Inflation Favor The Borrowers or The Lenders?
Is inflation a good or bad thing? Many ask that very same question. But inflation is not necessarily a bad thing. [Read more…]
What Is An NFT?
The acronym NFT has been in the media a lot in the last year. With more of us at home and the US government supplying stimulus money, people have been looking for something to do and ways to make money. Enter in the NFT. The question is, what is an NFT and how do they work?
What is an NFT?
NFT’s can be used to sell digital art (music, photos, videos, etc.) or a gaming NFT marketplace is a great place to turn game collectibles into NFT’s, and be sold as exclusive content
NFT’s are part of the blockchain (most popularly the Ethereum blockchain). Ethereum is a cryptocurrency. Ethereum differs from the “mainstream” Bitcoin because it is open source, which means it can be edited, updated, and/or improved upon.
NFT’s can be used to sell digital art (music, photos, videos, etc.).
How’s it work with the artist?
NFT’s could give artists a more significant piece of the pie when selling their work. Right now, most of the profit goes to middlemen/women. Authentication in the form of NFT would enable the artist to participate more in the revenue sharing of their work.
On the other side of that coin, if you’re buying NFT’s, you have the ability to support your favorite artists. Also, owning the NFT is akin to owning the original. You’re able to “use” it without the fear of being sued for copyright infringement. The “proof of work” for owning the NFT is recorded on the blockchain.
All that being said, owning an NFT just means you own the original version. There can and will be copies of that thing on the internet. Copies can be made much more easily than if those things were in the physical world.
What to watch for
You need to be careful when you are bidding for NFT’s. Someone can create an NFT that’s a copy of an original NFT. Hopefully, though, the questions when creating the NFT weed out the copies and “fakes”.
Additionally, blockchains and cryptocurrencies use an extraordinary amount of energy. The carbon footprint created by mining a single Bitcoin is ginormous (Source).
Related reading:
How Do I Invest In Cryptocurrency?
Crypto, Reddit, and the Stock Market
If you’d like to learn more about NFT’s, NPR created a great piece on them.
*Securities offered through Securities America, Inc., Member FINRA/SIPC. Advisory services offered through Securities America Advisors, Inc. Securities America and its representatives do not provide tax or legal advice; therefore, it is important to coordinate with your tax or legal advisor regarding your specific situation. Please see the website for full disclosures: www.crgfinancialservices.com
My name is Jacob Sensiba and I am a Financial Advisor. My areas of expertise include, but are not limited to, retirement planning, budgets, and wealth management. Please feel free to contact me at: jacob@crgfinancialservices.com
How do I invest in cryptocurrency
Are you looking to purchase some cryptocurrency?
Whether you’re purchasing cryptocurrency for day trading or as a long-term investment strategy, you need to buy your cryptocurrency from a crypto exchange.
Crypto exchanges are online marketplaces that operate similarly to stock exchanges. However, there is a lot of planning that goes into purchasing cryptocurrency, and you shouldn’t just choose the first crypto exchange you come across.
Who are the best crypto exchanges? Read on to find out. [Read more…]
Are You Financially Prepared to Return to The Office?
Now that vaccine rates are rising, and restrictions on gathering are loosening. Many professionals will soon be returning to their traditional workplaces. While the idea of transitioning back may not seem like a big deal. As many people have years and years of experiencing going to an office. That doesn’t mean there won’t be an impact. Returning to the office will come with a financial burden. If you aren’t ready, it can be hard to start shouldering again. If you want to make sure you’re financially prepared to return to the office. Here’s what you need to know.
The Costs of Heading Back to the Office
Often, you can’t determine if you’re financially prepared to return to the office without first understanding the costs you may face. That way, you can estimate how they may impact your budget, giving you a chance to make adjustments in advance.
Commuting
One of the biggest shifts in your expenses will involve your commute. Since you won’t be working from home, you’ll need to tackle transportation costs that may not have been a part of your life for some time. This can include increases in fuel expenses, tolls, parking fees, and wear-and-tear costs if you drive your own vehicle. If you use public transit, then you may need a new pass or to factor in the price of tickets.
Lunch, Drinks, and Snacks
Another point you may need to cover is food and drinks. While you can certainly pack a lunch to bring with you and only drink beverages available for free at work, meals and drinks out may also be part of the equation. If you don’t plan on bringing your own, you need to factor in these costs.
Wardrobe
Additionally, you may have to spring for new clothing. You’ll need to look at your wardrobe to determine two things. First, you need to see if your clothes are in good repair. Second, you need to find out if they still fit.
Many people saw their weight change during the pandemic, as being stuck at home altered activity levels and may have also led to diet changes. Since you want to look professional when you head back to the office, you need to make sure your clothing is the right size for you now.
PPE
Finally, you may need to cover some PPE costs that you didn’t have to shoulder before. This could include a higher quality mask, particularly if you aren’t yet vaccinated, and your job doesn’t allow for six feet of separation, as well as personal stashes of hand sanitizer, gloves, or other items that may not be available through your employer.
Child Care
If you have children at home, you may need to make child care arrangements for when you head back to the office. This is especially true if your children aren’t school-aged or if schools have not reopened in your area and your kids aren’t old enough to take care of themselves.
It’s also important to note that these costs may be higher than they were pre-pandemic. Many child care facilities have seen their costs rise and may still be dealing with restrictions about the number of kids who can be on-site at a time. As a result, they might have had little choice but to raise their prices in order to sustain their operations.
How to Financially Prepare to Return to the Office
If you want to make sure that you’re financially prepared to return to the office, your biggest step is to review your budget. Estimate the cost of any expenses you’ll have to cover once you start heading to a workplace and see if you can cover them comfortably. If not, you may need to cut back in various areas, ensuring that any costs that you can’t avoid can fit into your budget.
Additionally, for any items you need to buy – like clothing or PPE – shop around. Discount retailers like TJ Maxx or Ross Dress for Less may help you stretch your budget, or you may find solid options from thrift stores.
It’s also wise to keep a close eye on your food and drink expenses. Dining out is convenient, but it typically costs far more than bringing your own meals, snacks, and beverages. If you’re worried about safety, consider investing in an insulated lunch box or thermos if you need to keep items cold or hot. That way, you don’t have to store your food or drinks in areas that all employees can access, which may give you more peace of mind.
Finally, try to make room for saving. Keeping a solid emergency fund and your retirement on target should be priorities. While you may have to scale back while you regain your financial footing, try to stay committed to setting aside as much as possible. That way, you can maintain your savings habit.
Do you have any tips or insights that can help people financially prepare for a return to the office? Share your thoughts in the comments below.
Read More:
- 5 Details to Pay Attention to Regarding Your Job
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Tamila McDonald is a U.S. Army veteran with 20 years of service, including five years as a military financial advisor. After retiring from the Army, she spent eight years as an AFCPE-certified personal financial advisor for wounded warriors and their families. Now she writes about personal finance and benefits programs for numerous financial websites.
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