Friday Financial Five – September 25, 2015
Friday, September 25, 2015
Dan Forbes, GoLocalProv Contributor
With financial markets experiencing turmoil over the last few months, the surest way to guarantee some positive returns is to review these parts of the personal budget:
Moving to a Health Savings Account
The Health Savings Account is a smart concept that has caught fire as businesses, governments and individuals explore different options to save money. Using HSA’s often results in lower monthly premium while the account holder accumulates a tax deferred retirement supplement. It’s only allowed in high deductible plans and the money not paid for health services remains in the account. The concept also incentivizes insureds to use medical services only when truly necessary.
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Energy assessment savings
Small business owners and homeowners should partake in an energy assessment whenever possible, such as the one offer by National Grid. For those that qualify, the review could result in a complete overhaul of all lighting for free. Higher efficiency bulbs, which are expected to last for a longer period of time than traditional bulbs, may cost the owner nothing and be installed free of charge. So, the business or homeowner is looking at the possibility of free lights that will last longer and reduce monthly costs. What’s not to like about that?
Comparison of all insurances
One of the easiest ways to reduce expense is to put all personal insurances under the microscope. Home and auto insurance is a reasonable first place to look. Companies will incentivize the packaging of coverages, and while loyalty can be a good thing, there is always the possibility of significant savings with just a little bit of research. While savings is the goal, coverage shouldn’t be compromised and the insured shouldn’t absorb a large hurricane deductible to save a few dollars.
Utilizing the company match
Retirement plan participants that have an employer matching provision should take all measures necessary to contribute at least the amount of the match. In very few other situations in life is 100% return guaranteed, but this is one of them and it saves tax dollars while putting money away for retirement. For those that are skeptical of the market, it still makes sense to get the match and leave the money in a cash account or stable value fund. Only in certain situations, such as the inability to meet basic monthly needs, should workers forgo the contribution up to the match.
Various options can replace cable TV
Many pay a hefty monthly amount for cable TV but also utilize subscription services like Netflix, Amazon and Hulu. It may make sense cut that cable cord. For Apple users, Apple TV will seamlessly stream music, videos and movies. For others, there’s Roku, Amazon Fire TV, and Amazon Firestick. These devices allow access to apps and hundreds of different sites, including HBO Go, Hulu, and Netflix. Amazon Prime members gain access to thousands of movies and television shows. Sling TV is a monthly subscription service (like Netflix) that will cost $20 per month to access the best of live TV and sports. One possible sticking point is access to local news stations, which might require an antenna. For those unafraid of technology and looking to save money, there now exists a multitude of options to investigate.
Dan Forbes is a regular contributor on financial issues. He is a CFP Board Ambassador. He leads the firm Forbes Financial Planning, Inc in East Greenwich, RI and can be reached at [email protected].
Related Slideshow: RI Business Rankings in US
See how Rhode Island stacked up.
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WalletHub
Rhode Island has 2015's eighth highest insurance premium penalties for high risk drivers, according to a WalletHub report.
Rhode Island ranks fifth overall in the category of speeding over 20 mph annual premium increase at $482. While ranking third overall in the category of 2 accidents annual premium increase at $2,721.
Rhode Island ranks ninth overall under the reckless driving annual premium increase at $749.
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WalletHub
Rhode Island has been ranked as the 8th most eco-friendly state in the country, according to a recent study by WalletHub.
Rhode Island ranks third in environmental quality and 16th in Eco-Friendly Behaviors Ran landing them in 8th overall.
RI is behind Washington and New Hampshire who are in the six and seven spots respectively, and in front of Connecticut and Hawaii who come in at the nine and ten spot.
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WalletHub
Rhode Island is 2015's 4th Worst State to be a taxpayer, according to a recent WalletHub report.
Rhode Island ranks 48th of 51 with an average state and local tax price of $7,159 which is good for a 27% difference from the national average.
The states that are directly behind Rhode Island are Wisconsin at $7,159, Nebraska at $7,298 and Illinois at $7,719 for a 37% difference from the national average.
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WalletHub
Rhode Island has the highest vehicle property taxes in the country, paying an average of $1,133 according to a report from WalletHub.
Virginia and Kansas are the two states just ahead of Rhode Island in the 49 and 50 spots, paying $962 and $905 respectively.
RI also ranks 42nd in average real estate tax, paying an average of $2,779, according to the WalletHub report.
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Gallup
Providence-metro ranks at the bottom for job creation in 2014
Rhode Island has been ranked amongst the worst in job creation, according to a recent survey done by Gallup.
Gallup gives the Prov-metro area an index score of 23, the lowest score is the New York- New Jersey area with 20.
Salt Lake City, Utah and Austin-round Rock, Texas rank the highest with a score of 37.
See the rest of the rankings here.
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Forbes
The 2014 state rankings by Forbes has just been released and Rhode Island moved up two spots from #48 in 2013 to #46 in 2014.
What does Forbes say about RI's business environment"
After Michigan and Illinois, Rhode Island has experienced the third worst net migration out of its state in the country over the past five years. With a recent unemployment rate of 7.6%—lower than only Georgia and Mississippi—residents are leaving the state in search of jobs. Rhode Island has been stuck in the bottom five overall for six straight years. One plus: labor costs are 5% below the national average, which stands out in the expensive Northeast.
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Tax Foundation
Findings from The State Business Tax Climate Index were released this morning by Tax Foundation which found Rhode Island to have the 45th best tax climate for businesses for 2015. The state's rank has not changed since last year after The Index analyzed 100 different tax variables in multiple categories.
Read more about the report here
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Thumbtack/Kauffman
Providence is the second worst city in America for small business, according to a new survey conducted by Thumbtack.com and the Kauffman Foundation.
More than 12,000 small businesses in 82 cities across the country participate in the survey. Providence received an overall "F" grade for small business friendliness.
Full Survey Results Here.
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The Economist
Small Business Friendliness Grade: F
The Economist grades states on an A+ to F grading scale for its small business climate. Rhode Island is one of just 6 states to earn an "F" grade.
Overbearing bureaucracy and excessive licensing is stifling small business in America.
Read More About The Economist Grade Here
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Forbes
Forbes ranks each state in business costs, economic climate, and growth prospects. RI is third worst in 2013.
The most damning in the commentary:
After Michigan, Rhode Island has experienced the second worst net migration in the country over the past five years.
Read More About Forbes Ranking Here
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Tax Foundation
#46 Tax Foundation
Tax Foundation ranks each state in corporate tax rank, sales tax rank, and unemployment insurance tax rank.
Rhode Island and the other states in the bottom ten suffer from the same afflictions: complex, non-neutral taxes with comparatively high rates.
Read More About Tax Foundation Ranking Here
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ALEC
#47 ALEC
ALEC ranks each state in economic performance and outlook.
Although Rhode Island ranked low in economic performance, a forward-looking forecast is based on the state’s standing in 15 important state policy variables. Some of these variables include top marginal personal income tax rate and sales tax burden.
Read More About ALEC Ranking Here
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Kauffman Foundation
#50 Kauffman Foundation
Kauffman Foundation ranks each state in entrepreneurship.
Entrepreneurial activity generally is highest in Western and Southern states
and lowest in Midwestern and Northeastern states.
Read More About Kauffman Ranking Here
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Free Enterprise
#47 Free Enterprise
Free Enterprise ranks each state in performance, exports, innovation + entrepreneurship, business climate, talent pipeline, infrastructure.
Rhode Island has continued to feel the direct impact and ripples from the recent recession—it ranks 47th overall in economic performance. However, positive rankings of 15th in talent pipeline and 16th in innovation and entrepreneurship suggest the existence of a foundation on which to build the future.
Read More About Free Enterprise Ranking Here
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Gallup
10th Worst in Gallup's Annual Ranking of State Job Markets 2014
Rhode Island has been ranked 10th worst for job creation in Gallup's annual ranking of state job markets in 2014 with a job creation index number of 21
Rhode Island is one of two (Connecticut) states to rank in the bottom ten each year since 2008.
The 2014 State level findings have were drawn from 201,254 interviews with employed adults across the nation.
See the full list of rankings here.
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