Six ways to save money as a employee in 2010

Since the beginning of the new year, employee benefits have maintained or increased and should continue to do so as the year rolls out. Taking advantage of these benefits can keep money in your bank and out of the hands of bill collectors.

Perhaps the most notorious benefit of being an employee are premium HMO, POS, PPO plans you have available.

Usually, you’ll get to choose from more than one health plan, or qualify for a particular health plan. Most insurances plans are simply deducted from your paycheck, eliminating you yet another bill to pay every month.

Insurance rates can differ depending on the plan, but usually the more expensive the plan, the lower co-pays, prescriptions, visits to specials you will have.

The second employee benefit is the ability to maintain healthcare spending accounts that are convenient for your spending budget. There are a few types of employee savings account packets. The FSA dependent care plan has a $5,000 annual cap, and the health care FSA plan is a $3,000-$5,000 flexible limit. Both allow employees to save their “pretax dollars” to be used for expenses.

Third, your employer can pay for your health expenses with health reimbursement accounts. These accounts pay for your health problems only while you are employed. They are no longer funded if you are no longer working at the specified business.

Of course, there are always the 401(k) plans open to full time employees. Planning for the future is never too
late or too early. Any percentage of your annual salary that is put into a 401(k) is not taxed. A great way to save now and later.

Another way of saving money on unforeseen medical expenses or medical emergencies are having HSAs or health savings accounts. Any money that accrues from premiums can be used as this “pretax” dollar and put into a health savings account for such expenses.

The last way to save you money as an employee are health incentives. Doing weight-loss programs and fitness
plans can knock down your health insurance costs. Some companies even offer cash bonuses or discounts to employees who participate in health fitness programs.

Joint Savings Accounts and If You Should Have One

The purpose of a savings account is to store money in a place where it accrues small amounts of interest. Banks, money market funds companies, and credit unions offer such checking and savings accounts to customers. Savings accounts are safe places to store money as they are insured up to $250,000 by the Federal Deposit Insurance Corporation, not to mention that customers earn interest on the deposits. This insurance is in place should the financial institution declare bankruptcy or have mismanaged funds.

At one time, banks would offer higher interest rates than credit unions, though presently credit unions have competitive rates. Money market funds’ rates fluctuate based on the stock market. It is wise to shop around for the best incentives prior to opening a savings account.

Savings accounts are profitable for financial institutions because the customer is lending the money to these institutions who then loan out that money to other customers with a higher interest rate, some of which goes back to the lender-customer. As such, both the financial institutions and the original lender-customer profit from the savings account.

Savings accounts generally require a minimum deposit of $100, though most banks allow for certain circumstances. Children can open savings account with $5. Savings accounts are also advantageous should the customer not plan on spending money for a few months. Whereas checking account pay less interest and may charge the customer bank fees for using the account, savings accounts generally have higher interest rates and do not penalize customers for failing to access the account in a given time.

Joint Savings Account
Joint savings accounts are established to benefit multiple individuals. Often, married couples establish these accounts to build financial security; other groups such as domestic partners, friends, and even minor children have joint accounts for short term projects or long term financial security. Joint savings accounts are less volatile than most other investments strategies, as their interest returns, though nominal, are consistent and secure. As such, these are good strategies for those who do not care for aggressive and risky forms of investing.

Joint savings accounts have other advantages too. If both parties on the account are employed, then they can apportion some of their wages to the account, which makes it easy to grow savings without the burden of manual deposits. Also, joint savings accounts can be very beneficial should an account holder dies. In this situation, the assets of the account will be available to the other account holder; otherwise, the assets would be frozen until the will specifies who receives what. Because the account will not be frozen, the surviving account holder will still have some, if not, full access to his funds, though this may depend on the jurisdiction. It is important the account holders understand the local rules that apply in addition to trusting their fellow account holders.

Finally, one can utilize joint savings account to fund checking accounts, which can prevent potential overdrafts should the account holder face an unexpected situation.

What is a Savings Account: Savings Account Basics

Savings accounts are a safe place to keep money that is not immediately needed. Though they are not as liquid as checking accounts, the money is still fully accessible. Presently, there are two kinds of basic savings accounts. First, a customer can receive a passbook account, where the bank gives a person a booklet used to record withdrawals, deposits, and interest. There are few fees, low interest rates, and virtually no minimum balances. Second, a customer can acquire a high yield savings account, where the higher the balance, the higher the interest rate. Here, a customer cannot use checks with this savings account though he can link the two for deposits and withdrawals.

When keeping savings in mutual funds or stocks, a person will likely have to pay tax penalties to access the money. Savings accounts have no such tax penalties, though there may be some fees for closing the account or withdrawing a certain amount.

Time Deposit
Savings accounts are a common examples of time deposits, which are a form of savings where the depositor has restrictions when withdrawing funds. These accounts are usually set with a fixed term where the depositor may not withdraw funds until a certain time. Time deposits also benefit the depositor, as the restrictions on accessing funds result in the bank customer being inhibited from frequently drawing out small amounts from his savings accounts.

Health Savings Accounts
Health savings accounts are medical savings accounts that taxpayers who are enrolled in a High Deductible Health Plan can utilize. When the funds are not spent, they roll over and accumulate every year and are also not subject to federal income tax when deposited. Deposits are rolled over for either future medical expenses, or they can used to reimburse expenses qualified under health savings account plans from years before. The fund owners can withdraw them for qualified medical expenses without any tax liability, though expenses withdrawn for non-medical needs can incur penalties. Like any other investment, health savings accounts are subject to market risk as there are potential upsides and the possibility of downsides and capital losses.

Benefits of HSAs
Health Savings Accounts can help make individuals more responsible for their own health care by encouraging savings for future health care expenses. The premiums are generally less than those for conventional health insurance, and there is more flexibility to pay on a pretax basis for qualified medical expenses such as vision, dental, and non prescription medications, which are often not covered under traditional health insurance. Accounts can also accrue considerable assets that can be used for health care tax free or used for retirement on a tax-deferred basis.

HSA Drawbacks
Some consumer organizations claim health savings accounts only benefit healthier, younger people while proving costly for everyone else. People who generate little income likely do not earn enough for the tax breaks to be effective, and there is some concern that those who cannot fund these accounts may forgo the necessary medical care due to the relatively high deductibles.