Federal Student Loan Forgiveness: Four Ways to Wipe Out Your Debt

Nearly seven in 10 graduating seniors left college with student loan debt in 2014, with an average debt-load of $28,950 per borrower.

Some student borrowers find themselves in difficult straits after graduation. About 20% of borrowers owe more than $50,000; 5.6% owe six figures. Plus, any amount of debt can be too much if you can’t find a job after graduation, or a job that pays enough to support you while paying back your loans.

For these and other reasons—a layoff, an unexpected move, a family emergency—you might find yourself unable to pay back your student loans. Before you ignore the situation and go into default, consider these methods of securing forgiveness for your federal student loans:

1. Income-Driven Repayment Plan

OK, this first option isn’t technically student-loan forgiveness, but if you’re looking at possible default because of inability to pay, this is your first stop. Depending on your income, your monthly payment could be as low as $0. This is also the first step if you’re considering Public Service Loan Forgiveness.

There are four repayment plans based on income:

• Revised Pay As You Earn Repayment Plan (REPAYE Plan): This generally caps payments at 10% of your discretionary income (defined as income in excess of the federal poverty line).
• Pay As You Earn Repayment Plan (PAYE Plan): Generally capped at 10% of your discretionary income, and never more than the amount you’d owe under the 10-year Standard Repayment Plan.
• Income-Based Repayment Plan (IBR Plan): Generally capped at 10% of your discretionary income for borrowers after July 1, 2014 (15% for earlier borrowers), and never more than the amount you’d owe under the 10-year Standard Repayment Plan.
• Income-Contingent Repayment Plan (ICR Plan): Payments are capped at 20% of your discretionary income or less.

For details on the different programs and to apply, see the U.S. Department of Education’s Federal Student Aid site.

2. Public-Service Loan Forgiveness

If you’ve been diligently paying your student loans for 10 years (120 payments) and work for a qualifying government or nonprofit employer, you might be entitled to student loan forgiveness via the Public-Service Loan Forgiveness (PSLF) Program.

Only loans secured through the William D. Ford Federal Direct Loan (Direct Loan) Program qualify for the PSLF program. Other loan programs, such as the Perkins Loan, do not. (Although you have other options with Perkins Loans, as we’ll see in a moment.)

Qualifying employers include government organizations, including those at the federal, state, local, and tribal levels, as well as tax-exempt not-for-profit organizations, and other types of nonprofit organizations that provide certain public services. Labor unions and partisan political organizations don’t qualify.

Payments don’t need to be consecutive, but they do need to be for the full amount shown on your bill, whether it’s through a Standard Repayment Plan or an Income-Driven Repayment Plan. It’s also important to note that while some of your payments can be made through a standard plan, the majority must be paid through an income-based plan. Visit studentaid.ed.gov more details and to apply.

• Related: Student Loan Forgiveness: Jobs That Pay Off Your Debt

3. Perkins Loan Cancellation

Under certain conditions, you can apply to the school that extended your Perkins Loan for loan cancellation. If you were active duty military or a full-time firefighter on or after Aug. 14, 2008, or a police or corrections officer, full-time nurse or medical technician, a staff member of a Head Start program, or various other jobs, you might qualify. See this chart for details.

4. Teacher Loan Forgiveness/Cancellation

If you teach for five consecutive years at a school that serves low-income families, you might be able to secure student loan forgiveness for up to $17,500 on your Direct Subsidized and Unsubsidized Loans and your Subsidized and Unsubsidized Federal Stafford Loans. See this page for details on which types of teachers and schools qualify.

Meanwhile, if you teach full-time at a low-income school, and financed your education with a Federal Perkins Loan, you might be able to have your loans cancelled. See this page for details; contact your college or university to apply.

Note: The methods described here are specific to federal student loan forgiveness. To see your options regarding private student loans, consult our Student Loan Consolidation Guide or contact your lender.

Related Articles:

• Student Loan Forgiveness: Move to a Place That Pays Your Loans
• Take These Steps to Deal With Massive Student Loan Debt
• Student Loan Deferment and Forbearance: What They Mean and When to Use Them

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Dept. of Agriculture accepting applications for Pa. conservation programs

The U.S. Department of Agriculture’s Natural Resources Conservation Service is accepting applications to help producers improve water and air quality, build healthier soil, improve grazing and forest lands, conserve energy, enhance organic operations, and achieve other environmental benefits.NRCS will be able to provide funding assistance directly to Pennsylvania farmers and landowners in Fiscal Year 2017 to help them implement conservation practices through the Environmental [...]

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Wannabe a Spice Girl? The ‘90s Super Group is Looking for New Members

Baby Spice.

That’s the one I wanted to be. We all had one.

And don’t worry — I won’t make you admit it. But I know you wanted to be one. Were you Sporty, Posh, Scary, Ginger or Baby?

The Spice Girls garishly represented every kind of woman a ‘90s girl wanted to be: the tomboy, the snob, the sweet one, the sexy one and the crazy one. We latched on to our favorite, wore her clothes at Halloween and sang only her parts of their songs.

Never one to dabble lightly in an obsession, I even remember doodling the British bombshells in my sketchbook during class… and adding one extra member.

It was me. Yes, I drew myself into the Spice Girls.

I called myself Mini Spice — because I was younger than the rest of them. I think that’s pretty clever for a 12-year-old, but I’ll let you form your own opinions.

Make Your ‘90s Childhood Dream Come True

Ridiculous as my adolescent daydream sounds, I was apparently not very far off (told you, Mom!). The Spice Girls may be recruiting.

“Twenty years after they first conquered the charts, the Spice Girls are recruiting new (members) – using a BBC talent show,” the Daily Mail reports.

Two saucy, cheeky fans could have the chance to flaunt their Girl Power on stage next to Baby, Ginger and Scary next July to mark the 21st anniversary of “Wannabe,” the group’s first number-one single.

If you need a refresher, that’s Emma Bunton, Geri Horner (formerly Halliwell) and Mel B, respectively. The trio have recently reformed the group as GEM — without Victoria “Posh” Beckham or Melanie “Sporty” Chisholm, who are occupied with other careers.

The British tabloid reported last week that the three remaining members have approached BBC about a talent show, and they would be judges.

BBC has declined to confirm the rumor, but the entertainment world (and fans!) are all abuzz about the possibility after Mel B teased a reunion recently on “The Late Late Show With James Corden.”

The hunt would “involve auditions and heats over five consecutive nights next April, culminating in a live final on BBC1,” according to The Daily Mail.

We’ll keep an eye on the development to let you know just how you can get on that stage next year.

Meanwhile, you focus on the important stuff: Will you look better in a tracksuit, pigtails, a little black dress, leopard print or a cropped Union Jack?

Your Turn: Would you audition to be an honorary Spice Girl?

Dana Sitar (@danasitar) is a staff writer at The Penny Hoarder. She’s written for Huffington Post, Entrepreneur.com, Writer’s Digest and more, attempting humor wherever it’s allowed (and sometimes where it’s not).

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Chipotle’s Hiring 5,000 People — You’ll Get $28,000/Year and Free Burritos

Despite a rough year of press, Chipotle continues to chug along.

And many people, myself included, continue to eat there. (That sofritas bowl is just too dang tasty.)

So, surprising as it might be, the fast-casual chain is actually hiring people. Lots of people — 5,000 on a single day. And you can even schedule your interview online.

Here’s what you need to know.

How to Get a Chipotle Job on National Career Day

Chipotle plans to hold its second annual “National Career Day” on Wednesday, Sept. 28, 2016.

On this day, “managers of each U.S. restaurant location will hold open interviews for up to 100 applicants from 8 a.m. to 11 a.m. and 3 p.m. to 5 p.m.”

Want to register for an interview? Choose a location and time slot on the National Career Day website.

The company, which currently employs 60,000 people, hopes to hire 5,000 more.

To be eligible, you don’t need any experience. Instead, “Chipotle bases its hiring on a specific set of 13 Characteristics that indicate an applicant’s potential for success within the company.”

These characteristics include being “conscientious, respectful, hospitable, high energy, infectiously enthusiastic, happy, presentable, smart, polite, motivated, ambitious, curious and honest.”

Unlike most other restaurant chains, Chipotle offers benefits to both hourly and salaried employees, including:

• Health, dental and vision insurance

• Paid sick leave and vacation time

• Tuition assistance and heavily-discounted undergraduate/graduate classes

• A 401(k) with match and an employee stock purchase program

• The opportunity for twice-annual merit increases and an annual bonus

Oh, and of COURSE: a free shift meal, plus a 50% discount when you’re not working.

But, best of all is the fact this might not be “just a job” — since more than 90% of Chipotle’s managers are hired from within.

“Over the last year, the company has promoted more than 11,000 people from hourly crew into management roles,” the press release states.

In fact, if you work your way up to the restaurateur position, you could earn $125,000 per year — and get a company car!

So what are you waiting for? Sign up for an interview today.

Your Turn: Will you apply to a job at Chipotle?

Susan Shain, senior writer for The Penny Hoarder, is always seeking adventure on a budget. Visit her blog at susanshain.com, or say hi on Twitter @susan_shain.

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Have an Idea for a Board Game? Hasbro Will Pay You $25K for It

Hasbro Gaming Lab is inviting creators, innovators and independent artists to submit their best board game ideas to its fall 2016 Next Great Family Game contest.

The contest seeks the next face-to-face game that will “make the most epic family game night.” Think of the classics you played as a kid: Candy Land, Battleship, Sorry!

Remember when Bop It! came out? It changed my 10-year-old life.

You could create the next board game that helps bring families together.

The Rules

To submit an idea, your game should:

• Have complete rules (not just a premise)

• Be playable

• Draw players into the world of the game with a “conceptual narrative” and a “visual style.”

• Be your intellectual property or something you have permission to use

Judges will score your game based on:

• How well it crosses generations — it should be fun for the whole family.

• The strength of the content, narrative and visuals matching the theme.

• Viability and potential for success — can it be manufactured and sold to a wide audience?

In early November, five finalists will be chosen and receive $2,000 to run an Indiegogo campaign for their game.

Judges — including Daymond John of “Shark Tank” — will consider these campaigns when choosing a grand prize winner around the end of February 2017.

The grand prize winner will will receive $25,000 and a trip to Hasbro’s world headquarters in Pawtucket, Rhode Island, to meet with relevant business leaders for potential game development. You must be available between March 1, 2017 and June 30, 2017 for travel.

The contest is open to anyone in the U.S. and Canada, except citizens of Quebec. Submit your idea to Hasbro by Oct. 23 to enter.

How to Win the Contest

Wondering exactly what they’re looking for? Check out last year’s winner: Irresponsibility: The Mr. Toast Card Game. It’s now available exclusively at Target stores around the country!

“Essentially in one day, I went from being an independent artist to being a part of the Hasbro family,” says Dan Goodsell, the game’s creator and contest winner.

As a finalist, Goodsell’s game was funded through a Hasbro-backed Indiegogo campaign and, finally, chosen for production and retail distribution. He got to visit Hasbro HQ to put together a new version of the game for retail, including a nicer box, more concise rules and revised artwork.

“As an independent artist, having ‘Mr. Toast’ in stores across the country is a game changer,” Goodsell says. “The visibility is something I have never had before.”

In the month the game has been at Target, he reports an increase in his web traffic and sales of other products.

What can you do to be sitting in Goodsell’s seat this time next year?

“My advice is to try to maximize whatever it is that you are bringing to a game,” Goodsell explains. “I have my (existing) characters, Mr. Toast and his friends; I have my humor, and I had an idea about what kinds of games I like to play.”

He wove his unique elements together to invent a game no one else could have created. He also pointed out a good game should:

• Be easy to learn

• Yield different outcomes every time

• Involve a balance of luck and strategy

And if you have a great idea — but not all the skills you need to execute it — Goodsell recommends working with a team and submitting your game together.

“My motto is work on as many projects as you can,” he recommends. “You just never know when one will come together perfectly and win you Hasbro’s Next Great Game Challenge!”

Your Turn: Do you have a brilliant idea for a board game?

Dana Sitar (@danasitar) is a staff writer at The Penny Hoarder. She’s written for Huffington Post, Entrepreneur.com, Writer’s Digest and more, attempting humor wherever it’s allowed (and sometimes where it’s not).

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If You Love Soft Pretzels, You Won’t Want to Miss This Deal

It’s PretzelPhest at the Philly Pretzel Factory.

What does that mean for you? I’m so glad you asked: You can purchase 20 pretzels for just $5.

I’m not talkin’ frozen grocery-store SuperPretzels here. I’m talkin’ figure-eight-style, Philadelphia-beloved soft pretzels. They’re crispy on the outside, chewy on the inside, and it’s nearly impossible to eat just one.

That $5 bulk-buy price means your pretzels cost just a quarter each. I haven’t gotten that good of a deal since I went to Catholic elementary school, where I could buy soft pretzels at snack time. I won’t tell you what year it was.

Where to Get Your Pretzel Fix

Participating Philly Pretzel Factory locations are offering this special until October 2, 2016. You can make one 20-for-$5 purchase each day, and you can’t combine it with any other offer.

Philly Pretzel Factory has tons of locations in Pennsylvania and across the mid-Atlantic. But you can find franchises in Indiana, Georgia, North and South Carolina, Florida and even Texas, too!

So, What Can You Do With 20 Pretzels?

A few ideas:

• Grab a bunch before having the gang over to watch the big game.
• Take ‘em into work as a treat for your co-workers, just because.
• Bring them to your kids’ scout meeting to keep the kiddos and adult chaperones full and happy.
• Peel them apart, freeze them, then pull one out about an hour before you’re ready for a snack.
• Sell them for a buck each as a fundraiser at your school’s next sporting event.
• Take them to the next party you’re invited to. Perfect hostess gift, says this hostess.
• Hand them out to the hungry folks you pass on the street every day.
• Stop by your local fire or police department with a box, just to say thanks.
• Warm your hands over them while they’re still toasty hot from the store.
• Thank your lucky stars that soft pretzels exist in your world.

Your Turn: What would you do with 20 pretzels?

Lisa Rowan is a writer and producer for The Penny Hoarder. She’s from Philly, and she can never eat just one soft pretzel.

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Don’t Think About What You Want. Think About What It Would Take to Get It.

One of the easiest personal finance tips out there is to simply stop wanting more stuff. It’s simple, but it’s true – if you had an easy way to basically eliminate your desire to acquire anything new aside from things to cover your barest needs, personal finance would become incredibly easy.

Sadly, humans don’t work that way.

Our desires run amok for a lot of reasons. We want things for personal enjoyment. We want them because they’ll fill an emotional hole in our life. We want them to impress others or to keep up with the Joneses. We want to feel rewarded for the hard work we put into our lives.

All of those things – and many more – wind up being justifications for the non-necessities that we spend our money on.

I’m guilty of the same thing myself. I can name tons of things that I want, for various reasons. There are a couple of long-out-of-print board games that I’d love to have (if you happen to have a copy of 1862, let me know), for example. I’d love to have some more Baron Fig Vanguard dot grid notebooks – they’re wonderful for taking notes, but they’re more expensive than I can really justify. I’m going to want an electric car as soon as they’re really viable and approach anything close to cost-effective.

There are non-material things that I want, too. I want to get this mostly-finished novel that stares at me from my desktop screen completed, edited, and published. I want to actually launch a different project that I’ve been working on for most of a year. I want to be in better physical shape (I’m working on that). I want to be better read. I want my office to be better organized.

I could throw either money or time – or in some cases, both – at any of these things and transform that “want” into a reality.

But here’s the problem: everything has an opportunity cost.

When you spend money on something, you’re taking away every other thing you could have done with that money.

When you spend time on something, you’re taking away every other thing you could have done with that time.

The reality of life is that you can have some things, but you can’t have everything. Whenever you have something, that means you’re choosing not to have something else.

I could have all of the material items I listed above, but I’d quickly wreck all of our plans for the future.

I could take care of all of the projects I listed above, but I’d have to eat into time that I spend on other things, like spending time with my children.

The truth is this: I want to spend every dollar and every moment of my life on the most valuable thing that I can spend it on. I think that’s a goal that most of us share. (It’s also a call to frugality, but that’s neither here nor there.)

My solution to all of this is simple: whenever I want something, I try not to think about how much I want that thing and how great it is; instead, I think of what I’ll have to give up to have it.

Here’s specifically how I do that.

I think of how many hours I’ll have to work to buy this item, and what those hours might represent. I do this by first calculating my true hourly wage – the amount of money I have in my pocket per hour of my life devoted to work. Let’s say it’s $10 a n hour for convenience sake.

If I’m at a coffee shop and I’m considering a latte and a bagel, the total might be $7.50. That means I have to give up 45 minutes of my life to work tasks to earn that coffee and a bagel. Is that really worth 45 minutes of my life, especially when I could get virtually the same thing at home for less?

Let’s say there’s a new board game I want (if you’re new here, tabletop board games are one of my main hobbies) and it costs, say, $50. Is it really worth five hours of my life lost to own this game, particularly if I have a similar game or if someone else that I regularly play games with also owns this game?

I try to think of the other things I might do with that time. I look at eight hours of value as being equivalent to retiring a day earlier or an extra day off of work doing something fun. Is that $80 item going to bring me more joy than a full day off of work doing whatever I want?

Similarly, 2,000 hours of silly purchases (at $10 per hour) is basically equivalent to an entire year where I don’t have to work and instead I can live off of the money I saved from those purchases.

Figure out your own true hourly wage and use that as a comparison point for purchases. If you’re on a retirement budget, figure that you’re “working” 40 hours per week for that money.

I think of the other things I could have with that same amount of money. I’m standing in line for that $7.50 bagel and coffee at the coffee shop when I realize I could have the same bagel and roughly the same coffee for about $2 at home, leaving me an extra $5.50. I could put that towards a portion of something else I want instead, or I could bank it to move half an hour closer to early retirement (using my true hourly wage).

When I buy this bagel and coffee for $7.50, I’m giving up those things. I’m basically willing to give up some progress toward retiring early just to have this coffee at the coffee shop instead of at home. I’m willing to give up a portion of the cost of that book that I want (probably about half of the cost) or that board game that I want (probably about an eighth of the cost).

Is that bagel and coffee here worth it to me?

This idea is called “opportunity cost,” and I use it all the time to show myself that I’m not spending money in an optimal way in terms of what I want out of life.

All you have to do to use it yourself is think of other things you might do with the money you’re about to spend on that non-essential purchase. Is it really worthwhile? Is it worthwhile to spend $7 on the name brand version of a product when you could spend $5 on the store brand and have $2 in your pocket for other things? Keep making those comparisons until it seems natural and eventually you’ll find yourself naturally guided to the most worthwhile purchases and away from the less worthwhile ones.

When I’m trying to justify spending time on a project, I think of the least effective uses of my time right now. I think of the most useless websites I’ve visited in the last week, for example. I think of the time I spent leafing through a magazine and not really reading anything of value. I think of the time I spent sitting in the car staring off into space listening to a radio program that I actually can’t remember in any detail.

I waste a lot of time in my life. I also use time in less-than-worthwhile ways. When I think about spending time on a new project, I try to think of the less-worthwhile things I do with my time and I ask myself whether I’m okay with eliminating that time to support this new project.

If I don’t have the time, I don’t even start. If I do have the time, I make sure to de-commit from those other things first.

This might seem like a bit of a negative approach, but the truth is that if you don’t commit serious time to a serious project, it’s going to fail. You’re not going to achieve it and whatever time you do commit is going to go to waste. If you can’t give up the time to make a project work, don’t bother. Focus instead at succeeding at your other priorities.

Something has to be worth what you’re giving up for it or else it’s not worthwhile. When you spend money, you’re giving up something else you could buy; when you spend time and focus and energy, you’re giving up something else you could be doing. If you’re giving up something that actually has more value to you, then it’s simply not a good trade.

It seems obvious, but it’s something that people overlook all the time as they’re overcommitting to projects and overspending. They’re making trades where they’re giving their money and time and energy to things they feel like they want in that moment, but if they step back, they realize later that it’s a pretty bad trade.

Think about what you’re giving up before you give up your money or your time or your energy. Make sure you’re getting the better end of the deal compared to what else you could do with that money.

Good luck!

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These For-Profit Colleges are Forgiving $23.5 Million in Student Loans. Here’s Why

Students of Ashford University and University of the Rockies are due for a refund amounting to $23.5 million, according to the Wall Street Journal.

Bridgeport Education, Inc., a for-profit education company, runs these schools, and it just got the shakedown by the Consumer Financial Protection Bureau (CFPB).

The CFPB said Bridgepoint advertised in-house student-loan payment plans as low as $25 per month, although such a generous repayment plan was far from likely. And that false advertising is going to cost the company, big-time.

Almost 1,300 People Will Say Goodbye to Student Loans

After paying an $8 million fine to the CFPB, Bridgepoint will refund about $5 million to students who had started paying back loans issued between 2009 and 2013. Bridgepoint will then forgive the remaining $18.5 million outstanding on such loans.

Approximately 1,277 current and former students are affected, according to a Bridgepoint press release.

In addition, all students of Bridgepoint institutions will need to use the CFPB’s financial-aid-disclosure tool. The online tool guides users through college costs, financial aid and repayment options, and potential earnings after graduation.

“The quality of the education Bridgepoint institutions are providing to students or the value of the degrees they are working towards was not disputed by the CFPB,” Bridgepoint’s statement declared.

Your Turn: Did you attend Ashford University or University of the Rockies? How excited are you about your refund?

Lisa Rowan is a writer and producer for The Penny Hoarder.

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Disney Wants to Send 10 Families to Iceland for a Commercial (Pay is $10K!)

What’s the only place more magical than Disney World?

It just might be Iceland. I went earlier this summer and almost didn’t come back.

So it’s with great excitement I announce….

Disney has put out a casting call for REAL families to star in a commercial — in Iceland!

Keep reading to learn all about this insane opportunity.

How You Could Star in a Disney Commercial in Iceland

Your eyes ain’t lying: Disney’s looking for real families for an upcoming commercial shoot. In Iceland. And you’ll get paid.

Diana Lopez of Miami Talent Casting, one of the agencies searching for families, estimates 10 families will be sent to Iceland in early October.

If selected, Disney will pay you $2,500 per person (a total of $10,000 for a family of four), and cover all of your travel expenses.

Talk about a dream gig, right? Well, here’s who they’re looking for…

The company asks you not apply unless you meet all of the following requirements:

• You’re a family of four: you, your partner and two children. If you have more kids, you can apply — but only two children can accompany you on the trip.

• You and your partner are in your 20s-50s — and your kids are 8-16 years old.

• You’re Caucasian, African-American, Latino or mixed ethnicity.

• ALL family members have valid passports and are able to travel for 7-8 days between Oct. 1-15, 2016

Think you’ve got what it takes?

Email Lopez at miamitalentcasting@gmail.com with photos of your family, your names and ages, contact information and city where you live.

In your email, also note if you have experience with outdoorsy activities like snorkeling, hiking and boating. Being able to ride horses is another plus, but not a requirement.

Lopez said Disney hasn’t given her an “official closing date,” but advises sending in your photos as soon as possible. “Before the end of the week would definitely be good.”

Personally, I am off to find a husband and pop out some rapidly-aging babies… Iceland beckons!

Your Turn: Will you apply for this awesome opportunity?

Susan Shain, senior writer for The Penny Hoarder, is always seeking adventure on a budget. Visit her blog at susanshain.com, or say hi on Twitter @susan_shain.

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Annuity rates on track for worst ever year

Kyle Caldwell

falling-chart.jpg

Annuity rates are on track to post their biggest ever annual fall, according to new research compiled by Moneyfacts.

Annuity rates are on track to post their biggest ever annual fall, according to new research compiled by Moneyfacts.

The data provider looked at how annuity rates for a healthy 65-year-old male with £50,000 had changed since the start of 2016. Moneyfacts found that rates had declined by 15% year-to-date.

read more

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The Myth of the Ruthless Business Mogul (or Why It Pays to Be Nice in the Workplace)

It’s still commonplace for bosses to think that they need to rule with an iron fist. This is never more apparent than in the sports world. Football coaches behave like military generals. They yell, degrade, and even hit to motivate their players. They think that if they’re not feared, there will be mutiny. Turn on the TV on any Saturday or Sunday in the fall and you’re likely to see a stout man in a hat screaming in the face of a 20-year-old kid.

I’ve been on the receiving end of this behavior as a basketball player, and the situation can go one of two ways: You do what the man is saying because he put the fear of God into you, or you spitefully keep doing your own thing because that guy clearly doesn’t respect you.

While this is an extreme example (managers at Big Box, Inc. probably don’t call their employees “worthless sacks of human garbage”), the question of whether the hard-nosed style of motivation is the right way to lead applies to all workplaces.

Thankfully, the trend seems to be shifting towards workplaces that value cooperation, constructive criticism, and employee empowerment. This is because people are researching the effects of different management styles, and the power of benevolence is winning out.

If you’re in charge of a group of people, you’d do well to heed the flood of research coming out that shows that nice bosses make happy people, and happy people make more money for themselves and the businesses they work for. If you’re a manager, here are some guidelines to help you become a better boss with more productive employees.

It’s Not Good to Be Feared

As much as the coaches and generals would disagree, ruling by fear is ultimately harmful. As the Harvard Business Review pointed out in 2013, “Fear can undermine cognitive potential, creativity, and problem solving, and cause employees to get stuck and even disengage.”

While the boss might think that scaring someone into doing their work faster leads to more efficiency, in reality it just engenders distrust. This distrust manifests in lower work outputs and a toxic workplace environment. On the other hand, workplaces built on trust and respect “generally lead to higher economic gains,” according to the HBR.

Other studies bolster this point. Research out of North Carolina State University demonstrated that when bosses are thought to be fair, workers collaborate better in a group setting. The study’s authors conclude that, “If you think you are being treated well, you are going to work well with others on your team.”

More effective collaboration leads to more efficient product development, and ultimately the creation of a lower-cost and higher-quality product. Win-win!

Don’t Stress Out Your Employees

One thing everyone can agree on is that increased pressure from your boss leads to higher stress. I used to wear a heart rate monitor at all times while working an office job. This job somehow managed the double whammy of being both boring and stressful. That’s the worst of both worlds, like driving a minivan that’s less safe than a sports car.

I noticed that when my boss came out of his office, my heart rate would increase. This was before he even said anything. I was so programmed to be ready to put out a fire (or worse, to be told to make a cappuccino with juuuuuust the right amount of foam) that my body went into fight or flight mode the second his door opened. As you might imagine, that’s not a healthy reaction.

Stress in short bursts is a good thing. These are so-called hormetic stressors. Exercise is a hormetic stress. You briefly make your muscles do something difficult, which causes a slight breakdown in the tissues. But, with proper rest, they are rebuilt to be stronger than before.

This applies in the workplace as well. A tough boss who inspires fear in his or her employees might be effective in motivating them to complete a pressing project on time. But, if this tactic is used with impunity, it loses its desired effect. Like an athlete who overtrains, the constant stress eventually leads to injury.

The quality of a boss can have a direct effect on the extent of how injured their employees become. One 3,000-person study showed that disliked bosses managed a workforce with a higher likelihood of getting heart disease.

And it’s not just the heart. Studies show a 46% increase in employee health care expenses overall, as well as a higher employee turnover rate, especially among women. A high turnover rates is a drain on any business — it costs both time and money to recruit and train new employees – but turnover can be mitigated by fair, reasonable bosses. 

Leaders on the cutting edge are realizing the benefits of cultivating a positive workplace. Unlimted PTO (paid time off), in-office perks, and company ethics that center around inclusion and compassion are all on the rise. These practices can lead to more successful businesses in the long run. 

It’s Not All About Money

Contrary to what many people assume, employees value happiness more than high salaries. It’s amazing that we need science to tell us that people really want to be happy while doing whatever it is they do for 40 hours a week, but here we are.

Still, the happiness research begs the important question of what makes us happy at work. The answers can be highly subjective, but the studies point toward one possible common solution: Engagement. Those who find value in their work, enjoy spending time with co-workers, and believe that their boss has their best interest in mind are going to be happy. It seems obvious, but anyone who has spent any time in an office knows that finding a job that ticks all three of those boxes is like finding a unicorn.

Bosses who take the time to foster engagement among their employees are going to run a more successful business. That means employers who think outside the box to create a thriving company culture can be just as successful as those who only focus on paying the highest salaries.

Summing Up

If you’re a boss who leans towards the “NFL Football Coach” end of the bell curve, it could be time to loosen up a bit. And if you’re an employee working for someone who thinks that burning the candle at both ends while taking a blowtorch to the middle is the only way to do business, it could be time to put your resume out there. You’ll likely be healthier, happier, and ultimately more successful in a friendlier environment.

Related Articles:

• Do You Hate Your Job — or Your Boss?
• How to Get a Ton of Value Out of an Entry-Level Job
• The Power of Your Boss
• The Inspiration for Success in Everyday Life

The post The Myth of the Ruthless Business Mogul (or Why It Pays to Be Nice in the Workplace) appeared first on The Simple Dollar.

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Proposal for £500 advice at retirement is a 'gimmick', say Moneywise users

Helen Knapman

Plans to enable retirees to take £500 tax-free from their pension to put towards advice have been hailed as a “gimmick” by the majority of Moneywise.co.uk users.

Plans to enable retirees to take £500 tax-free from their pension to put towards advice have been hailed as a “gimmick” by the majority of Moneywise.co.uk users.

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Ask GFC 010 – Should I Payoff Debt or Invest an Inheritance?

Welcome to another Ask GFC! If you have a question that you want answered you can ask it here.

If your questions get featured on GFC TV or the GFC Podcast, you are the lucky recipient of a copy of my best selling book, Soldier of Finance, and a $50 Amazon gift card.

So what are you waiting for? Ask your question now!

This is one of the most common financial dilemmas.

You come into a windfall, and then debate whether or not to payoff debt, or to invest the money for the future.

Reader Katie asks the question this way:

“Hi Jeff – Congratulations! This is really exciting. A question I’m currently stewing over is this:

I’ve inherited some money that could get me out of about 85% of my credit card debt that I’ve been carry for ~8 years. My APR is 29%. Do I put it toward my credit card debt or do I look for other ways to invest it and start a cushion for my future?
Thanks for reaching out and encouraging us to ask questions.

All the best,
Katie D.”

Katie’s dilemma is a bit more clear-cut than most. But I’ll start out by looking at it from a more general perspective, and then get more specific about her particular situation.

First Things First: Make Sure You Have a Savings Cushion

The question involving windfalls, and particularly inheritances, is almost always between paying off debt or investing. I would suggest that there is a third option that can’t be overlooked in a lot of cases.

Before you either pay off debt or invest for the future, the first thing you need to do is to create a cash cushion for the present.

One of the biggest reasons for financial stress – and even for the inability to achieve long-term financial independence – is a lack of liquidity. The absence of any kind of liquid savings forces you to rely on debt any time there is a cash shortage.

It doesn’t take much imagination to realize that an absence of savings is a surefire recipe for a lifetime on the debt treadmill. Unfortunately, it starts early with most people. Because they never have a basic savings account, credit dependency becomes a lifestyle. Debt can suck the life out of your finances, because it represents a perpetual drain on your income.

In addition, having enough savings to cover your living expenses for a few months will do more to reduce financial stress in your life than just about any other single strategy. It eliminates worry over an unexpected expense, or even a temporary loss of a job.

For all of those reasons, my recommendation would be to first make sure that you have enough money in a savings account or money market fund to cover your living expenses or at least three months. That will give you the breathing room that need to do everything else.

The Case for Paying Off Debt

Using an inheritance to pay off debt is usually a can’t-miss strategy. That’s because the rate of interest that you pay on debt is just about always higher than what you can in an interest-bearing account. For example, if you’re paying 20% on your credit card debt, but you can earn no more than 1% in a savings account, you’ll be losing 19% per year if you put the money into savings, rather than toward paying off your credit cards.

Still another factor is income tax. Interest earned is taxable, while interest paid on consumer debt is not tax deductible. That means that even if the spread between interest on debt and interest on savings were closer, the tax imbalance would continue to work against you.

Some financial advisors recommend that you eliminate consumer debt, particularly credit cards and other unsecured lines of credit, before you even begin investing. While I don’t necessarily believe that advice applies in all cases, it’s still a sound strategy.

After all, the elimination of a debt with a 20% interest rate effectively translates into an investment that pays 20% guaranteed!

There’s also an imbalance in regard to rate of return. For example, the interest rate that you pay on debt is usually locked in. But the return that you earn on your investments is not, at least in the case of equity investments, like stocks and mutual funds. In fact, those asset values can drop in a market decline, while your debt level will only fall to the extent that you make payments to reduce it.

Then there’s the point that by paying off debt, you free up your income for other purposes, including savings and investments. It’s often true that people who have a lot of debt are never able to save and invest. By paying off debt, you will be in a position to do just that, and that can change your financial life for the better forever.

You really can’t go wrong with paying off debt.

The Case for Investing the Money

A strong case can be made for investing an inheritance. This is especially true if you currently have no investments, and don’t have any history of having them.

Sometimes the money from a windfall can jump start you into investing. You get a basic nest egg to invest, and then you start adding periodic contributions to the account. The investment then grows steadily, through a combination of continuing contributions and investment returns.

Long-term, this is a sound strategy. Your wealth will grow along with the size of your investment portfolio. As you become wealthier, it’s entirely possible that your debt problems will eventually become smaller. That is, the amount of your investments can outstrip the size of your debt. When it does, you’ll be in a position to both pay off your debt, and still have investment assets for continued investing.

This can be especially true if the investing is being done through some sort of tax-sheltered savings, like an IRA, Roth IRA, or even a 401(k) plan. The fact that you have an inheritance can even free up more of your paycheck to contribute to an employer-sponsored plan.

In a tax-sheltered plan your investment value grows even faster, because there is no tax liability to reduce your rate of return. This is a way to build your investment worth quickly. And it goes without saying that it creates the kind of long-term financial stability that can improve your entire situation.

My Recommendation in Katie’s Situation

OK, the long and short of it is that Katie has three good options with her inheritance. In truth, she can’t go wrong no matter which she chooses. But I think there is an order here, or some options are better than others.

Katie hasn’t told us the size of the inheritance, or the amount of her debt. What she has told us is that the inheritance is insufficient to completely pay off her debt. In fact, she said that it would be enough to pay off 85%.

Based on those circumstances, I would suggest she choose the following – in order:

1. Set up a savings cushion. The first recommendation is that she put enough of the inheritance into a savings account or money market fund to cover at least three months of living expenses. The fact that she has owed money on very high interest rate credit card(s) indicates that her financial situation is stretched pretty tight. The savings cushion will give her the room she needs to maneuver to seriously attack paying off her debt.
2. Use the balance of the inheritance to payoff debt. Obviously setting up the savings cushion will leave her with even less money to pay off her debt. But it would also leave her in a stronger financial position. By using the remaining balance to pay down her debt, she will also lower her monthly debt payments. Any savings from those reduced payments should be applied to paying off the credit cards sooner. She should also look to find any other ways either reduce her spending or increase her income to pay off her debt completely.
3. Begin investing only when the debt is paid off. Investing for the future has a lot of advantages, but in Katie’s particular situation I think that her priority has to be centered on improving her current circumstances. If she invests money immediately, she risks losing some of the money – without improving her situation. But if she creates a savings cushion and pays off her credit card debt first, she will be in a better position to throw everything she has at investing later on.

Katie, I don’t know if that’s the answer you were looking for, but it’s what I would recommend. You’re in a tight spot right now, and before you start investing for the future, you first have to secure present. Starting with the cash cushion, then paying off your credit cards, will enable you to do just that. Then you’ll have the rest of your life to invest away!

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I Tracked My Grocery Spending for a Week. Here’s What I Learned

It’s really easy to say you’re a careful, savvy grocery shopper.

But it’s also really (really) easy to toss that impulse pint of ice cream or giant bag of pretzels into the cart. Or to buy a bunch of produce with the intention of doing a Pinterest-worthy Sunday meal-prep sesh…

… only to end up with a slimy mess in your crisper drawer by Thursday. No bueno.

The first step in overcoming any problem, penny-pinching or otherwise, is to take a close look at your behaviors as they are.

So let’s get intimate.

I’m going to break down a week’s worth of my own grocery shopping, and show you all the penny-hoarding steps I take to make sure I save as much as possible — and point out what I could do better, too.

Before We Start, Some Caveats

Samantha Dunscombe – The Penny Hoarder

A couple quick notes before we get started.

I live alone and am responsible only for myself and my dog, Odin. So if you have a family of multiple humans, your grocery list will differ significantly from what you see here.

Furthermore, you’ll notice my list misses a few key staples you probably have on yours. That’s because I eat kind of weirdly.

I lost a bunch of weight a few years ago, and to maintain that, I follow certain dietary guidelines. Specifically, I don’t eat many carbohydrates. You won’t find cereal, pasta, rice, bread or even much fruit on my grocery list, which is strange, I know. My diet’s pretty much meat and green stuff — an expensive choice.

If you’re curious, it’s basically a modified version of the ketogenic diet; Gary Taubes’ “Good Calories, Bad Calories” is a great resource if you want to know more.

As another consequence of my weight loss, I’ve become something of a gym rat. I work out at least an hour a day — usually six days a week — and I particularly like picking up heavy stuff and putting it back down again.

Thus, I consume a lot of protein — and in general, a lot of food for a 5’3”, 135-ish pound woman.

TL;DR: I understand my grocery-buying habits are probably different than most folks’.

But then again, everyone’s lifestyle is different. What’s an “average” grocery list?

The saving techniques I use can be adapted to any diet, budget or life situation. It’s my hope that a complete picture of one particular grocery routine — even if it’s a little peculiar — might help you take a closer look at your own.

Step One: Secure Breakfast

Image from Quest Nutrition/Facebook

My grocery-buying adventures actually start online.

1 box S’mores Quest Bars: $24.99

1 box Chocolate Chip Cookie Dough Quest Bars: $24.99

Shipping: $4.95

Total at Quest Nutrition: $54.93

OK, so we’re starting off this Penny Hoarder’s grocery tell-all with a definite splurge item.

But given my active lifestyle and diet restrictions, Quest bars are worth the money to me — and no, the company’s not paying me to tell you this.

(Dear Quest Nutrition: If you want to pay me to say this, please reach out. I spend enough on your products that you’ll basically break even on me alone.)

These protein bars actually taste good incredible, and pair 20 or more grams of protein with a really low net carbohydrate count — pretty much unheard of in fitness nutrition.

They’re also basically the only remaining sweet thing I eat… so yeah, I’m totally gonna spend $50 on a month’s worth of perfect-with-coffee protein bars for breakfast. I’d give up cushy toilet paper first.

I order them straight from the source since they’re already so expensive. If I hit a health food store, I have to face an additional markup.

Even using Ebates’ 5% cash-back portal for GNC online won’t match buying direct — it only brings the $35.99 boxes down to an effective price of $34.19. That’s still almost a full $10 more than Quest’s prices — and I’d still have to pay for shipping.

Step Two: Everything Else

Samantha Dunscombe – The Penny Hoarder

Let me come clean right now: I break a cardinal rule of grocery shopping like a Penny Hoarder.

I don’t do meal planning.

This is probably because of the same character flaw that makes me a notorious over-packer, despite having done more than enough traveling to know better.

But making commitments ahead of time about what I’m going to eat or wear stresses me out. As I’ve said to travel companions before, “I just have to see what kind of day it is, you know?”

(Cut to me with an open suitcase and literally my entire wardrobe on my bed… one day, I’ll learn. I hope.)

Luckily, a majority of my meals consist of throwing a bunch of vegetables in a bowl or putting some meat with salt, pepper and granulated garlic into the oven. And as I mentioned, I eat a lot, and pretty much never eat out — so food waste isn’t usually a problem for me.

I also don’t coupon. (I know, I know. But what can I say? I’d rather spend my Sundays on the beach.)

This week, I went to Publix — not the cheapest grocery store in my area, but the only one that carries my greyhound Odin’s brand of dog food.

Although I’d normally do my weekly produce shopping at Trader Joe’s, I chose to simplify my life and save time by making only one stop.

Here’s what I got:

1 32-ounce container Chobani whole milk yogurt: $5.69

1 pound tomatoes on the vine: $1.72

1 red onion: $1.62

2 (gigantic) red bell peppers: $5.34

1 yellow bell pepper: $1.76

1 Hass avocado: $2.50

1 cucumber: 67 cents

1 6-ounce package fresh raspberries: $2

1 head broccoli: $2.99

1 10-ounce bag mini San Marzano tomatoes: $2.99 (on sale: $1 off)

2 pounds baby carrots: $2.29

2 bags Fresh Express baby kale mix salad (BOGO): $3.99

2 bags Fresh Express sweet butter lettuce (BOGO): $3.99

2 bags Fresh Express leafy green romaine lettuce (BOGO): $3.39

1 2-ounce package Brad’s raw kale chips: $3.99 (on sale: $1 off)

2 bone-in pork loin chops: $6.78 (on sale: 15% off)

2 pre-packaged Boar’s Head salami and cheese packaged snacks: $10.78 (yikes!)

1 4-count package pet waste bags: $5.99

1 14.5-pound bag Purina Beyond “superfoods” dog food: $25.29

Total, including taxes: $98.75

According to the bottom of my receipt, I saved $20.10 in promotional pricing, the bulk of which came from my bagged lettuce, it seems.

In scanning the receipt, one thing jumps out at me: Those pre-sliced salami-and-cheese packages were $5.39 apiece… for a 360-calorie plate I’d likely eat as a mid-afternoon snack!

Bad move.

They were totally an impulse buy, stocked in a refrigerated case in the checkout aisle — a sneaky sales technique stores purposefully deploy to encourage exactly this kind of spending.

Plus, I already have cheese and salami at my house — and pre-sliced stuff dries out quickly. Ugh.

I also realized I have a $3-off coupon for dog food in my wallet, which I totally forgot to use. At least it doesn’t expire soon, so hopefully I’ll remember next time!

Grocery Haul Takeaways: What I Learned

Samantha Dunscombe – The Penny Hoarder

My total grocery expenditure this week was $153.68.

Then, I earned back 50 cents through Ibotta: 25 cents on the red onion, 25 cents on the red bell peppers.

I also paid for my groceries with a rewards credit card that gets me one travel mile per dollar, so I earned 156 frequent flyer miles, a dollar value of about $2.34 (hey, everything helps!).

It’s important to note this week was a little odd: I only buy dog food about once a month, and the same goes for restocking my Quest bars.

That said, I already had meat, cheese, nuts, eggs and half-and-half at my house; I only bought the pork chops because they were on sale.

If I had to purchase any of those, or refresh any of my condiments, my total probably would have gone back up to about $100 — a good guess at my weekly average for grocery expenses — even without the $50 I spent on protein bars and dog food.

I’m doing a number of things really well as far as saving money at the grocery store… but there’s a lot I could improve, too!

What I do well:

• I use a rewards credit card (and always pay it all the way down each month to avoid paying any interest)

• I optimize where I’m shopping to some degree, and usually go to the store that has the best prices on items I buy regularly, per my own price comparison

• I use Ibotta to get rebates on the items I buy

• I avoid most impulse buys, although I slipped up this week

• I don’t buy junk food

• I avoid food waste

What I could do better:

• I could clip coupons before heading to the store — and remember the ones I do have

• I could check Ibotta first. As it turns out, a brand of deli meat I regularly buy had a $1 rebate available, and if I’d gone with a different brand of kale chips, I could have earned $2 back. Bummer!

• I could plan my meals

• I could actually go to different stores to get the best deals, and shop at lower-priced places like Aldi or Asian markets

• I could stop buying pre-bagged lettuce and baby-cut carrots, which are more expensive than whole vegetables

• I could stop needing so much darn protein (not happening)

• I could not have a dog (definitely not happening)

How to Save Money on Groceries — Every Single Time You Shop

Samantha Dunscombe – The Penny Hoarder

Luckily, since it’s just me and Odin — and I have an awesome job — I can get away with my slightly sloppy grocery habits.

But if you’re feeding a family, saving at the grocery store becomes even more important.

Good thing we’ve got lots of resources to help you out!

Start by taking a few tips from this mom, who feeds her family of five for $64 a week — $36 less than I spend just on myself and my dog.

One-up me and start meal planning — it’s not as hard as it seems, I hear!

You can create a coupon binder and fill it with free coupons, so you’ll be organized and prepared.

You can optimize which day of the week you go shopping to get the best deals (hint: It’s not over the weekend!)

And if you’re willing to get a little ridiculous, there are even more ways to save.

Meanwhile, I’m off to go bask in the glory of my full larder, impulse buys and all… and to find a good recipe for those pork chops!

Your Turn: What are your good grocery-buying habits? What could you do better?

Disclosure: You wouldn’t believe how much coffee The Penny Hoarder team goes through. This post contains affiliate links so we can keep the grinds stocked!

Jamie Cattanach is a staff writer at The Penny Hoarder. Her writing has also been featured at The Write Life, Word Riot, Nashville Review and elsewhere. Find @JamieCattanach on Twitter to wave hello.

The post I Tracked My Grocery Spending for a Week. Here’s What I Learned appeared first on The Penny Hoarder.

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