Earned Income Tax Credit unclaimed by one-in-five households

The Internal Revenue Service says One-in-five households in the United States eligible for the Earned Income Tax Credit does not claim it.Millions of Americans qualify for the credit and, for those who are low or moderate-income workers, taking it might allow the reaping of some or all of the money paid in taxes — sometimes a taxpayer can receive even more than that on their returns.“One-third of the population eligible for EITC changes each year as their [...]

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Your Weekend Just Got Easier: Here’s How to Score a Free Uber Ride

No matter how divided our society is these days, I think we can all agree on this: Uber is the best thing that ever happened to our Friday nights.

And now, everyone’s favorite ride-summoning service has teamed up with Google Maps to make your weekend plans even simpler. On both Android and iOS devices, you can now request an Uber directly from Google Maps — no switching between apps required.

Plus, for a limited time, Uber is offering a $15 credit when you try ordering your ride through this new feature in Google Maps.

How Do You Order an Uber With Google Maps?

First, make sure that both your Uber and Google Maps apps are up to date.

Next, open your Google Maps app and select your route like you normally would.

Then, swipe right on the transportation icons at the top of the screen until you see the stick figure holding a briefcase. (He’s the guy who looks like he’s hailing a cab after a very important stick figure meeting).

A bar will pop up at the bottom of the screen showing price and time estimates for the closest drivers. It will look a little different from the Uber interface, but it’s still the same process — just choose your preferred vehicle type and hit “Request.”

This will bring up a payment screen where you can either select the card you have on file or choose another payment method.

Finally, hit the “Book” button — and then wait awkwardly on the corner attempting to flag down every third car while you suddenly realize just how many white Hondas there are in this world.

Simplifying the Process

Everything you used to do in the Uber app you can now do in Google Maps (you can even contact your driver or cancel your ride directly through the Maps app) without the added hassle of searching for the address in Maps before plugging it into Uber.

If you want to leave your driver a review, however, you’ll still have to navigate to the Uber app. (And you should, because good reviews help good drivers stay in business.)

And if you’re looking for a new side gig to help you bring in some extra cash, consider becoming an Uber driver yourself!

Your Turn: How will you use your $15 Uber credit this weekend?

Grace Schweizer is a junior writer at The Penny Hoarder.

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Boxing Up Baby: Why New Jersey Will Give All New Parents This Item for Free

A Scandinavian tradition for new parents is coming to the United States. Well, just one state — for now.

A new program in New Jersey will provide sturdy cardboard baby boxes for free to every child born in the state, regardless of their parents’ income level.

Yes, it’s actually cool to put your baby in a box.

The program is offered by New Jersey’s Child Fatality & Near Fatality Review Board and funded through a grant from the Centers for Disease Control and Prevention. In 2017, it will give away 105,000 boxes from The Baby Box Co. to provide a safe snooze spot for newborns.

Aside from serving as a portable crib complete with a tiny mattress, each box contains items like diapers, wipes and even a onesie for your little wonder to wear. The boxes are an upgraded version of The Baby Box Co.’s basic box, the Bed Box, which retails for $69.99.

How to Get a Free Baby Box in New Jersey

It’s easy to sign up for your own baby box if you’re a New Jersey parent.

1. Register at Baby Box University, the education arm of The Baby Box Co., and make sure your contact info and mailing address are in New Jersey.
2. View New Jersey’s parenting education lessons on the website, and take a quiz about what you learned. The program includes topics like newborn care, breast-feeding and infant sleep safety.
3. Choose how you want to receive your baby box: by mail or pickup from a Baby Box University partner.

Why Baby Boxes are Important (Not Just Cute)

It sounds counterintuitive, but a box is one of the safest places a newborn can sleep.

It can be tempting to bring your infant into bed with you or fill their crib with blankets, toys and stuffed animals. But those items can block baby’s access to air, which can compound existing physical conditions and lead to Sudden Infant Death Syndrome, or SIDS.  

The safest sleep position for baby is on their back on a flat, firm surface. The box format promotes this while making it easy for baby and parents to share a bedroom without having to maneuver around bulky furniture.

Baby boxes have gained attention for their popularity in Finland, where families have been receiving these starter kits to prevent infant mortality since the 1930s.

Just a stone’s throw from New Jersey, Temple University Hospital in Philadelphia launched its own baby box program last year, doling out 3,000 boxes as part of its own sleep-safety education program.

A freebie that serves as a newborn starter kit and an educational guide for new parents? It’s the perfect pairing.

Our bet: You’ll be seeing similar programs spreading across the U.S. sooner rather than later.

Bring on those cute baby box Instagram snaps!

Your Turn: Have you ditched your baby’s crib for a baby box?

Lisa Rowan is a writer and producer at The Penny Hoarder. She has no use for a baby box but really, really wants to see all your Instagram photos of them in action.

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Prepare For Medical Costs In Retirement

Prepare For Medical Costs In Retirement

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Your Water Bill Will Likely Spike in 5 Years. Here are 6 Ways to Save Now

My boyfriend and I do this weird thing where we brush our teeth together, peering at each other in the bathroom mirror, toothpaste frothing up in our mouths.

However, this endearing habit often leads to us bickering.

Jacob lets the water flow freely from the faucet as he brushes. I automatically reach over and shut it off as images of cast-off plastic water jugs flood my mind. The environment. Money. Why.

Thanks to a recent PBS article, I have new, Penny-Hoarding ammo for these arguments and why he’s going to want to stop wasting water.

The PBS piece highlights a recent Michigan State University study, which predicts the average monthly water bill in America will increase $49 over the next five years.

This increase could leave many folks unable to afford the staple utility.

Why Water is Likely to Become More Expensive

The average water bill for American households is currently about $120 per month.

I have to say this number shocked me. But sure enough, my mom told me our average water bill here in Florida is about $160 a month. Like many others, she’s watched it increase over the years.

In fact, between 2010 and 2015, a survey of 30 major U.S. cities tallied a 41% increase in water bills.

Now? The Michigan State University researchers, led by Elizabeth Mack, are saying it’ll increase even more in the next five years — $49 more.

There are several driving factors behind this hike, the big one being our country’s water infrastructure; it’s seriously old. Much of our system dates back to World War II or earlier, PBS reports.

For example, take our nation’s capital — Washington D.C. Apparently, water still runs through wooden pipes from the mid-1800s.

This isn’t going unnoticed by lawmakers, either. This past Tuesday, Senate Democrats shared their $1 trillion structure plan, including $110 billion for water and sewer rehab and $36 billion for droughts, flooding and other fun stuff, PBS reports.

In addition to fueling new infrastructure, there are other factors, too — like urban flight. City-dwellers are moving out and leaving fewer people to cover the expense.

However, Water Environment & Reuse Foundation research manager Justin Mattingly told PBS the old infrastructure is the main reason for price increases.

What a Water Price Increase Means for American Households

We need water.

To drink, shower, brush our teeth, use the restroom, do laundry, prepare food, water plants… the list goes on.

Mack, the Michigan State University geographer who led the recent research, says most Americans assume water is a non-negotiable staple, something built into each budget.

However, Mack compiled some existing reports to reveal some pretty scary numbers. The EPA estimates water bills, on average, consume about 4.5% of a household’s income.

Once water prices cost more than that, money will have to be siphoned out of other areas of the budget.

Mack deducts that, to afford this hefty bill, a household has to earn at least $32,000 a year. Based on that assessment, nearly 14 million households couldn’t afford water in 2014.

If prices do rise 41% over the next five years, that puts 40 million Americans in danger of losing affordable water.

(If you want a more mathematical, scientific, thorough explanation, PBS has you covered.)

Will You See an Increase in Your Water Bill?

If you live in the South, an urban center or a low-income community, you face the highest risk of increased water bills, according to Mack’s research.

The most susceptible states include Mississippi, Louisiana and Alabama.

However, Mattingly told PBS no one is in the clear.

“Some regions are affected more than others in regards to rising water prices, but it’s unlikely that there are any regions that won’t see increases,” he says.

How to Save Money on Your Water Bill Before the Flood Hits

Sure, you can get creative and opt to pee in the shower. Or collect shower water in a bucket to use in your toilet.

You can also resort to simple hacks: Turn the water off while brushing your teeth (looking at you, boyfriend) and let your yellow mellow (aka don’t flush).

But here are a few simple steps you can start implementing now — and not have to think about every single waking moment of the day. A few of these tips might require you to initially invest a few dollars, but you’ll save more than that in the end.

1. Ask your water management company for a free audit.

Next time you get a bill in the mail, call your utility services and inquire about a free water audit. Someone will come out and let you know about any leaks or where you’re losing water.

If you have no such luck, do your own audit. The American Leak Detection has a great list of obvious signs you have a plumbing leak.

2. Invest in Tank Banks — or a brick.

Three of these little Tank Bank pouches cost $12.99 via Amazon Prime but can help you save $35 a year on your water bill.

All you have to do (cue infomercial voice) is clip the Tank Bank onto the side of your toilet tank. It displaces about 0.8 gallons of water — per flush. If you really want to go wild, clip two Tank Banks in the tank to save that hefty $35 per year!

You can also improvise and clunk a brick or two in the bottom of the tank.

3. Get a dual-flush toilet.

A bad toilet with bad settings can actually cost you more than $110 a year, according to the EPA.

So if you need a new throne, dual-flush toilets are a nice money-saving solution. They’re like the ones in Europe where you can opt for a small flush… or a larger one.

My namesake, Kohler, offers dual-flush toilets for $185. If that’s not in your budget, Amazon sells dual-flush conversion kits starting under $15.

If you don’t want to get a new toilet or install new parts, check in on your fill valve and float. If you don’t know what that means, we have all of your toilet needs covered right here.

4. Consider the water temperature.

If you think about it, cold water costs you twice: when you suck it into your home and when it leaves via the drain. Hot water costs even more because you have to heat it, too.

Using your clothes washer is an especially good time to remember these differences.

You can save $40 a year washing your clothes in cold water, according to one of our previous posts. And you’ll prevent color bleeding. Win-win.

5. Get a smaller water meter.

Do you know your house’s pipe needs? Yeah, me neither.

The size of your water meter directly affects your water bill, according to one of our archived posts. Unfortunately, the water engineer probably didn’t take detailed measurements to customize your meter.

“You got whatever was on the truck that day, whatever the company had in the store room and whatever the employees thought would cause the least customer complaints — which tends to be a larger meter,” Cade Simmons writes.

A bigger meter means a higher flow, which means more water and more money sucked away.

To see if your water meter is too big for your needs, read more about what Simmons had to say.

6. Check for rebates.

Yup, we love shopping rebates. Did you know you can get them for being energy efficient, too?

The EPA has a nifty tool that allows you to search by product and state to see what you can get a rebate on in your area.

Have a nice water-saving toilet? Perhaps you could get money back!

For more water-saving (aka money-saving) tips, read “Cut Your Water Bill by $250 a Year Without Changing Your Daily Routine.”

Your Turn: How much is your average water bill?

Carson Kohler (@CarsonKohler) is a junior writer at The Penny Hoarder. After recently completing graduate school, she focuses on saving money — and surviving the move back in with her parents.

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403b vs. 401k: What’s the Difference?

I know that you were losing sleep because I had not written a post yet that outlines the differences between a 403(b) vs. 401(k).

Oh wait….you weren’t? I thought everybody was a retirement tax code freak like me.

Either way, you or someone you know may have the option to fund a 403(b) and understanding how it compares to a 401(k) may prove to be helpful.

When people are first hired into a full-time job and some part-time positions, they get handed a variety of paperwork and decisions they have to make right away as a new employee. Among those items is the establishment of a company retirement account for their potential retirement savings from earnings.

Most companies today offer employees a standard 401(k) retirement deferred savings plan. However, if a person works for the government or some organizations, like nonprofits, different options can come up, including the 403(b) plan. This raises the question of which is better between a 401(k) vs. 403(b).

A variety of retirement plans exist today, approved by the Internal Revenue Service as legal tax shelters for earnings. In almost all cases, except for a Roth IRA, the plans involve pre-tax income that is deferred to a holding account and allowed to gain profit and interest through compounding and investment.

When the funds are finally withdrawn, usually later in a person’s life, they should – in theory – be part of a larger retirement balance which can be used when a person is no longer working, ergo at a lower tax rate.

This maximizes the value of the dollars saved, even with inflation taken into account. Each of these plans has a numerical name, referring to the tax code statute that authorizes the activity and given plan.

The 401(k) Plan – The Basics

Most people know of or are familiar with the 401(k) retirement plan. But whether you are or you’re not, here are the plan highlights:

Income Tax Treatment. Contributions to a 401(k) plan are deductible from your taxable income in the year they are made. Investment earnings within the account accumulate on a tax-deferred basis. Both contributions and investment earnings become taxable upon withdrawal, and are added to your other income for the year that they are taken. In this way you are shifting the tax burden from today until you retire, at which time you’ll presumably be in a lower tax bracket.

Contribution Limits. For both 2015 and 2016, the maximum contribution you can make to a 401(k) plan is $18,000. If you are age 50 or older, there is a catch-up provision of $6,000, enabling you to contribute a maximum of up to $24,000 per year.

Employer Matching Contributions. Employers can and often do match an employee’s contributions to a 401(k) plan. A typical match is 50% of the employee’s contribution, up to 6%, which means the employer contributes 3%, bringing the total contribution to 9%. There is often a vesting period for the employer’s contribution, up to five years, after which the total amount of the employer’s contribution is considered “vested” by the employee (it’s then fully the employee’s money). In theory, an employer match – plus the maximum employee contribution – can be as high as $53,000 per year, which is the maximum contribution per employee under IRS regulations.

Withdrawal Requirements. You can begin taking withdrawals from your 401(k) plan once you reach age 59 1/2, and once again, those distributions will be added to your income for tax purposes. If you take withdrawals before turning 59 1/2, you will have to pay an early withdrawal penalty tax of 10% of the distribution, in addition to the regular tax liability that will be owed.

Required Minimum Distributions (RMDs). Like nearly every other type of retirement plan (except Roth IRAs), 401(k) plans require that you begin taking withdrawals from plan no later than when you reach age 70 1/2. If you don’t withdraw an RMD, don’t withdraw the full amount of the RMD, or don’t withdraw the RMD by the applicable deadline, the amount not withdrawn is taxed at 50%.

401(k) Loan Provisions. One of the benefits of a 401(k) is that you can take a loan against your account, as long as it is permitted by your employer (they aren’t legally obligated to do so). You can borrow out up to 50% of the plan value, up to a maximum of $50,000, and must repay the loan within five years. However, if a 401(k) loan is taken for the purpose of purchasing the employee’s principal residence it can be paid back over a period of more than 5 years.

One thing to be aware of however is that if you leave your employer and you still have a loan balance outstanding, you must pay it back (within 60 days), otherwise it will be considered to be a distribution from the plan, and subject to regular income tax and, if you’re under age 59 1/2, the 10% early withdrawal penalty.

401(k) Portability and Rollover Provisions. If you leave your employer, you can take your 401(k) with you. You can then do a tax-free rollover either into the 401(k) plan of your new employer, a traditional IRA, a 457 plan, a SEP IRA, or a 403(b) plan. You may also rollover a 401(k) into a Roth IRA or a designated Roth that’s part of a traditional retirement plan (for example, a Roth 401(k) ), but the amount of the rollover will be subject to regular income tax in the year that the conversion is completed. (See IRS Rollover Chart for rollover summary details).

Note that rollovers can only be done after you’ve left the employer who sponsored the original 401(k) plan, and not while you are still employed.

401(k) Investment Options

Investment options in 401(k) plans run the gamut. In some plans you may be limited to a half-dozen mutual funds or ETFs, and your employer’s company stock. In others, you’ll have as many options as the plan trustee has available.

For example, if the plan is held with Fidelity, chances are you’ll be picking from a selection of Fidelity funds. That will likely income a selection of target date funds. Blah! In case you didn’t know, I’m not a big fan of target date funds, but that’s a story for a different post.

The 403b Plan – The Basics

403(b) plans are very similar to 401(k) plans, except that where 401(k) plans are sponsored by for-profit businesses, 403(b) plans are for not-for-profit organizations that are tax exempt under IRS Code 501(c)3. That includes educational institutions, school districts, governmental organizations, religious organizations and hospitals.

• Income Tax Treatment. Same as for the 401(k) plan.
• Contribution Limits. Same as for the 401(k) plan, except for the maximum allowable contribution (MAC) provision below.
• Employer Matching Contributions. Same as for the 401(k) plan.
• Withdrawal Requirements. Same as for the 401(k) plan.
• Required Minimum Distributions (RMDs). Same as for the 401(k) plan, except that 403(b) plans have a special allowance for plans that received pre-1987 amounts. If so, then distributions are not required until December 31 of the year in which the plan participant turns age 75 or, if later, April 1 of the calendar year immediately following the calendar year in which the participant retires.
• 403(b) Loan Provisions. Same as for the 401(k) plan.
• 403(b) Portability and Rollover Provisions. Same as for the 401(k) plan, except that a 403(b) plan can also be rolled over into a 401(k) plan of a new employer.

Special MAC Rule with 403(b) Plans

Those with 15 years of service to an employer can then add another $3,000 to their annual contribution limit, depositing a potential $21,000 per year in 2015 or 2016, or $27,000 if they’re over the age of 50. This is called the maximum allowable contribution, or simply MAC.

Unfortunately, just because MAC is allowed under the IRS code does not mean the employer has to honor it. They have to include it in their plan document for it to go in effect. I had a client that met the 15 year requirement but since she was one of the only ones that did, her employer wasn’t aware of the MAC rule and didn’t feel the need to include it in their plan.

403(b) Investment Options

Most 403(b) plans provide a choice of mutual funds or annuities for investment of saved funds. Ever since their was a shakeup in the 403(b) market a few years ago, I’ve seen quite a few mutual fund companies pull out. That means you’re seeing a lot more insurance companies offer some sort of annuity product in the plans. Personally, I’m not a big fan of this.

403(b) accounts typically appear in non-profit organizations, churches, school organizations and government. There is a significant administrative difference from a 403(b) as eligible organizations have less paperwork to file with the IRS versus under a 401(k) plan. Because the 403(b) plan is cheaper to administer as well, it’s favored by small entities with tight budgets but still wanting to offer workers a retirement perk.

Summary: 403(b) vs. 401(k)

Is one plan better than the other? In some respects, yes. But in most regards they’re the same plan, with the 403(b) plan serving the same purpose for government and nonprofit employers that the 401(k) plan does for profit generating employers.

The two areas where the differences are the most significant are with investments and the MAC. Investment options are generally more numerous with 401(k) plans, particularly if the plan trustee is one of the major investment brokerage firms that offer something close to unlimited investment choices.

But the MAC provision is a definite plus in favor of the 403(b) plan. It enables long term employees to make higher contributions, even in addition to the catch-up provisions that are normally offered to participants who are age 50 or older.

Both plans offer employees a significant ability to shelter income from taxes and save for their retirement, regardless of the differences between the two. In some cases, employers even provide a match to employees, depending how much they deposit from their own money. This match is essentially free dollars everyone should take advantage of as much as possible when available. That said, depending on the employer, a different plan type will be available. Few employers offer both types of accounts.

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Monday, Smunday: Heinz Wants to Make the Day After the Super Bowl a Holiday

In the wake of an unprecedented election, record-setting civil protests and executive actions that unnerve millions of Americans, food manufacturer Kraft Heinz Co. is tackling what really matters in 2017: your Super Bowl hangover.

In a two-minute YouTube ad, the company announced yesterday its U.S. employees will all get the day off Feb. 6, 2017, the Monday following Super Bowl LI.

Plus, it invites the whole country to join them.

“For the past 50 years, the best day on earth has been followed immediately by the worst day on earth,” laments a man dressed as a Heinz ketchup bottle.

He’s talking about Super Bowl Sunday, the biggest football day of the year. Kickoff is at 6:30 p.m. EST, after a day of pre-gaming with hot wings and nachos, followed by a night of drinking in either celebration or sorrow, depending on your team’s fate.

It makes for a rough Monday.

So rough, in fact, Heinz claims more than 16 million employees call in “sick” to work the following morning, probably based on a study The Workforce Institute released last year.

Producers even found people on the street to agree. “It’s the worst Monday of the year,” “It’s un-American,” and “You’re naturally just not happy,” disgruntled interviewees and apparent football fans say in the ad.

Should Super Bowl Monday Be a National Holiday?

“It is about time that we made that not-so-awesome Monday more like a Sunday,” says the ketchup bottle.

It’s a Sunday-Monday… a “Smunday,” Heinz has dubbed it.

It encourages us to sign a petition — an actual petition, taking up actual bandwidth at Change.org — to make the Monday after the Super Bowl a national holiday.

“If we get over 100,000 signatures, it will be sent to Congress,” the petition says.

(Never mind that Congress doesn’t create “national holidays,” which don’t exist. It creates federal holidays, which have no official say over when private companies can operate. But let’s not get caught up on details…)

The call for a new holiday is obviously a stunt to garner Heinz attention for a fraction of the cost of actually airing a commercial during the Super Bowl — and it’s working.

But its employees really do get the day off.

They don’t even have to be football fans. Sans hangover, they might be able to use that Smunday to make some extra smoney while their co-workers sleep it off.

Your Turn: Do you wish your company would make Super Bowl Monday a holiday?

Dana Sitar (@danasitar) is a senior 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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Facepalm: Bizarre Reasons People Have Really Given for Being Late for Work

“I forgot it wasn’t the weekend.”

If you’re looking for ways to downplay your lack of punctuality on Monday mornings, that excuse probably won’t get you very far.

Career Builder surveyed managers and workers about reasons people show up late for work.

Some of the answers are absolute doozies.

• I put petroleum jelly in my eyes.

• I had to watch a soccer game that was being played in Europe.

• My pet turtle needed to visit the exotic animal clinic.

• I was cornered by a moose.

• The pizza I ordered was late being delivered, and I had to be home to accept/pay for it.

• My dad offered to make me a grilled cheese sandwich, and I couldn’t say no.

How do bosses keep a straight face after hearing some of these?

I mean, I totally get the person who was late because of grilled cheese. However, I don’t think “mandatory soccer viewing” is actually a reasonable excuse you’ll find in an employee handbook.

Of course, not everyone is so cavalier about being late for work. For some of us, the idea of showing up late is literally a nightmare.

It’s Okay to Be Late for Work — Sometimes

The survey revealed a few realistic and relatable reasons for tardiness, like getting caught in traffic, bad weather or oversleeping.

Employers are pretty understanding because they know it happens to everyone sooner or later.

Of the companies surveyed, 29% say it’s okay for employees to be late once in a while, as long as it doesn’t become a habit.

On the flipside, 69% of workers say they’re willing to stay past their regular working hours to make up for being late to work.

Bravo for a good work ethic!

How to Avoid Being Late for Work

Career Builder also found that 17% of respondents arrive late for work because they procrastinate.

You may not feel like pulling yourself together and going to work in the morning but those bills aren’t going to pay themselves.

So what’s the answer?

Try one of these three ways to nip procrastination in the bud before it becomes a permanent habit that’s tough to shake.

1. Start small, then build. It’s more than just a smart approach to saving money, it’s also a great way to make incremental changes in your life that lead to long-term results.

2. If you put off leaving for work because you don’t like the commute, download podcasts you love and vow to only listen to them only after you’ve walked out your front door.

3. Embrace your inner procrastinator, but channel that inertia toward saving money. Take comfort in knowing that people who delay gratification are actually more content with their lives.

I don’t recommend intentionally slacking off and showing up late for work. But if you must, the only good excuse is, “I was busy reading The Penny Hoarder.”

Your turn: What’s the silliest reason you’ve ever been late for work?

Lisa McGreevy is a staff writer at The Penny Hoarder. If she’s ever late for work it’s totally because she got sidetracked by grilled cheese.

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Moneywise users could be incentivised to downsize

Helen Knapman

smaller-house.jpg

Older homeowners living in large properties may be encouraged to downsize and free up housing for families, according to plans expected to be announced by the government this month.

Older homeowners living in large properties may be encouraged to downsize and free up housing for families, according to plans expected to be announced by the government this month.

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31 Days to Financial Independence (Day 24): Investing and Saving for Education

“31 Days to Financial Independence” is an ongoing series that appears every Thursday on The Simple Dollar. You might want to start this series from the beginning!

Last time, we discussed steps that people need to take in order to use their “gap” money – the difference between their income and their spending – to begin saving for a robust retirement.

Today, we’re going to look at another major goal that many people have for their lives: saving for future educational expenses, both for their children and for themselves.

It’s the dream of many parents to save up enough money so that their children can go to a great college, yet parents often discover that achieving that goal is much harder than it seems. Is it an achievable goal? Is it even a worthwhile goal?

Many other people reach a point in their adult lives where they consider going back to school to continue their education, whether to obtain a master’s degree or to head down a new career path. Is that an achievable goal? Is it even a worthwhile goal?

Both of those matters rest upon the shoulders of a similar set of issues and questions. Is it better to save in advance for a college education? Or is it better to wait and rely on loans? Are there alternative strategies for achieving the training needed for work outside of the typical college route? How much of a child’s college education should a parent actually pay? If you’re saving for future educational expenses, how should you do that in a financially optimal way?

It’s a tangled mess of questions and matters to resolve and they end up becoming something that people put off and put off until suddenly their child is leaving for college and they’ve saved very little or until they’re standing in a career crossroads.

At those late points, the options are limited and many of the best opportunities have already been taken off the table.

Don’t let yourself wind up in that position.

Exercise #24: Planning and Saving for Education

Although there are definitely some action steps to be taken later in this exercise, much of this centers around reflecting on your own situation and figuring out whether saving for education makes any sense for you and your family. It’s not an easy “yes” or “no” question, so let’s start by untangling the knots together.

Do you think you should pay for the entirety of the college education of your children? If not, then how much should you pay for? This is a fundamental question that people need to ask themselves as they begin to drill into the question of saving for education.

Sarah and I have come to the conclusion that we’re willing to pay for a portion of our children’s education, but not for all of it. Here’s our rationale for that mindset.

On one hand, we both found it valuable for us to have some “skin in the game” during our college years, in that we understood that we had a personal financial stake in our college performance. Without that personal stake, it would have been easier for both of us to not take college seriously. We couldn’t just fail out without real personal financial consequence; it was our burden, too.

At the same time, we both recognize that college is incredibly expensive and that large student loan payments are a huge burden to overcome in your early professional years. It restricts your professional choices. It restricts your life choices. It forces you to make other financial choices that are suboptimal, like altering the decision as to when it makes financial sense to buy a house.

Our goal, then, is to pay for a portion of our children’s college educations, but not all of it. We expect them to pay for a large portion, likely a majority portion, of it themselves.

Answering this question now sets up some expectations for what you should be able to save for your child’s education. There is no “right” or “wrong” answer here. Some parents may want to pay for all of their child’s education. Some may choose to pay for most of it. Others may choose to pay for half or a little less. Some may simply want to cover just a small portion.

Why is that important? Well, US News and World Report, relying on Department of Education numbers, estimates that a four-year college degree will cost about $200,000 in 2030. If you’re planning on paying for all of it, then you need to be saving $200,000. If you’re shooting for half, that’s a $100,000 target. That’s an enormous difference, one that’s going to change your strategies for saving.

So, what’s your target? Are you going to try to pay for the whole thing? In that case, expect to be putting aside about $500 a month from birth until age 18. Are you going to pay for half of it? That’s going to be about $250 a month from birth until age 18. (This is, of course, assuming you’re investing in something that’s going to earn a 7% return).

Figure out your philosophy now, because your philosophy here directly influences how much you need to save each month.

Are you going to return to school in the future? And, if so, what might that look like? When would you go? Would it be full time, or would it be in the form of weekend and evening classes? Would your current employer be able to pay for some of the cost or would all of the expense be coming out of your pocket?

The truly important question here is whether or not additional education is in your future. Are you considering earning a higher degree to jumpstart your current career? Are you considering a career shift that will push you in a completely different direction and require a completely different degree? How likely are those things?

If those things are likely in the future, then saving for your education in an appropriate account now is a bright idea. It will save you quite a lot on your education expenses later on with no tax penalties.

The drawback, however, is that if you end up not getting an education and you don’t have anyone in your life to transfer those savings to (something we’ll get to in a minute), then you’ll get hit with an additional tax penalty when you use the money you’ve earned in that account.

So, here’s the deal: if you’re pretty certain that some form of additional education is in your future, you’re better off saving for it now in an appropriate fashion than you are waiting around. If you’re much less certain, saving up for it in an account without specific education benefits is probably a better all-around choice.

A 529 college savings plan is far and away the best vehicle to use for college savings, whether for you or for your child. If you are certain – or at least very confident – that post-secondary education is in the future for you or your child, the best tool you can use to start saving now for that future education is a 529 college savings plan.

A 529 plan is not all that different from a savings account on the outside. You deposit money into it, just like a savings account, and you can take money out later when you need it, just like a savings account.

There are a few differences, however, and two of those differences are really beneficial for education.

First of all, when you start a 529 college savings plan, you must name a beneficiary. The beneficiary is the person for whom the plan is designated to be used for in order to pay that person’s expenses. So, for example, I have three separate plans for each of my children, and in each plan, a different child is named as the beneficiary.

You can change beneficiaries among siblings without any tax consequences (and grandparents can move accounts among first cousins of the same generation), which is a real benefit for parents with several children or grandparents with lots of grandchildren. If, say, your oldest child doesn’t need their full savings, you can change the beneficiary to another child without tax consequences.

Second, while money is in a 529 account, you can designate it to be invested in stocks or bonds or real estate or other things in order to earn a better return. You can always just leave it in the form of cash and earn a steady slow trickle of interest, just like a savings account, but if you’re going to be leaving money in there for very long at all, you probably want options that offer a better return.

Third, when you withdraw money from a 529 plan for educational purposes, you don’t have to pay taxes on the investment return within that account. So, let’s say you put in $1,000 when your child was born and it grew to $3,000 by the time your child is 18. If that child takes out that money and applies it to tuition, that $2,000 in investment gains is tax free. If you save in other ways, that $2,000 is going to be taxed, eating away at your gains.

There is a drawback, however. If you take out money for non-educational purposes, you have to pay taxes on the gains, plus an additional tax penalty. What this essentially means is that you really shouldn’t put money into a 529 plan unless you’re quite confident that you’re going to be using that money for educational purposes at some point.

It’s worth noting here that grandparents, family members, and friends can contribute directly to 529 plans. This actually makes it very easy to centralize college savings and gifts intended for college savings for children.

If you or your child receives scholarships, you can make a tax free withdrawal from a 529 plan equal to the amount of that scholarship to use as you like. Let’s say, for example, that you’ve been saving up for your child, but then your child receives a National Merit Scholarship and has their tuition paid for. At that point, you can consider the option of taking some money out of the account for other expenses without any taxes at all, or else you could leave it in there for potential graduate school expenses.

Similarly, if the beneficiary dies or becomes disabled, there is no penalty for withdrawing the money. A 529 really does offer a ton of advantages when you’re saving for college, even if things don’t turn out the way you plan.

Finally, 529 plans often have special tax benefits if you open a plan in the state where you live and your state collects income tax. For example, in Iowa, if you use their College Savings Iowa 529 plan, your contributions are tax deductible if you’re an Iowa citizen paying Iowa state taxes.

Each state runs its own plan, with some variations between them. You can generally join a plan from another state if you prefer, but some states offer particular benefits for using the money from that state’s plan for education spending in that state or offer tax benefits as described above. Different states also use different investment houses on the back end of the plan. In general, however, using the 529 plan in your own state is usually perfectly appropriate if you’re unsure.

31 Days to Financial Independence
Day 1: The Shallows and the Deep
Day 2: Direction in the Deep End
Day 3: Finding Meaning
Day 4: Your True Hourly Wage
Day 5: A Living Budget
Day 6: The Big Boost
Day 7: Minimizing Debt
Day 8: Trim Housing Costs
Day 9: Trim Transportation Costs
Day 10: Trim Utilities Spending
Day 11: Trim Food Spending
Day 12: Trim Insurance Spending
Day 13: Cut Health Care Spending
Day 14: Cut Entertainment Spending
Day 15: Cut Apparel Spending
Day 16: Cut Education Spending
Day 17: Integrating Cost Cutting Measures
Day 18: Earning More at Your Job
Day 19: Getting Promoted at Work
Day 20: Finding a Better Job
Day 21: Starting a Side Business
Day 22: Avoiding Lifestyle Inflation
Day 23: Investing for Retirement

You can start saving in a 529 for your child before that child is even born. You do this by setting up a 529 plan with yourself as a beneficiary and then change that beneficiary after the child is born. However, when you change the beneficiary on the account from a parent to a child, it’s considered a gift and is subject to the usual tax rules of gifts, meaning that you need to keep the gift below the gift exclusion. In short, keep it under $13,000 and you’re fine if you’re not giving any other cash gifts that year, or keep it under $65,000 and you’re fine if you give no other gifts in the next five years.

I did this exact thing with my own children, as I started a plan for each of them before they were born and changed the beneficiary after their birth.

529 plans are usually built up through regular automatic transfers of money. When you sign up for a 529 account, the plan usually will have you set up an automatic transfer program from your checking account to that new account. That automatic transfer will take whatever amount you designate directly out of your checking and put it into the 529 account at whatever rate you designate.

So, for example, you might want to set up a $100 per month transfer (which would get you to roughly $40,000 if you start as a newborn and keep going until the child is 18), or $25 a week (which would get very similar results). You might choose to do more or do less. Once you set it up, though, it’s all automatic. You don’t have to think about it.

Automatic savings is the best way to save for any serious future goal. It takes the day-to-day decision making process out of your hands. You no longer have to decide after each paycheck whether you want to save money for that goal. You no longer have to remember it. It just happens automatically, and you have to put in effort to stop it.

Keep it simple when choosing investments. As with retirement, one area that often stymies a lot of people and keeps them from actually getting started is uncertainty about investment choices.

When you sign up for a 529 plan, you’re often bombarded with investment options. You can leave your money in cash. You can put it into stocks. You can put it into bonds. You can put it into real estate. You can even mix things up amongst all of those categories. Not only that, there are often many options within those broader categories, too.

In an effort to try to find the best option, people often get “locked up” by the sheer number of options and then fail to make any decision. They just put it off, and because of that, they fail to take advantage of the most valuable years of investing – the first ones.

This is a situation where “the perfect is the enemy of the good.” You are far better off choosing a “good” investment at random and starting now than twiddling your thumbs and putting it off and eventually finding a “better” one later.

For one, if you put it off, you miss out on contributions. Right at this very moment, you’re as far as you’ll ever be from the day you need that money, which means you have the most possible time for the power of compounding to help you earn a lot. The longer you wait, the less your investing dollars will earn because they’ll have less time to grow.

For another, within a 529, you can always change options later. If you do eventually find a “better” option, you can move that money around within your account.

If you’re unsure where to even start, almost every 529 plan has a pretty good default choice that anyone can use. It’s usually called a “target date” fund. Just figure out which year you or your beneficiary is likely to start using the money you’ve invested, then choose the “target date” fund that matches that year and put all of your money in there.

A “target date” fund automatically balances your investments for you so that you have more risk and more reward when you’re far from that date so that you can potentially earn more (with some risk), but that risk lowers as you get closer so that you don’t unexpectedly lose a lot of your balance. It’s a nice balancing act, and a “target date” fund does that for you automatically.

The perfect is the enemy of the good, and a target date fund is almost always a good option. Put your money there if you’re unsure what to do with it.

The sooner you sign up, the better off you are. The reason is simple. The sooner you sign up, the more time you have to make regular contributions to the account, so your total contributions will be higher between now and the start of college. Similarly, you’ll also have more time for those investments to grow, meaning your returns will be better, too.

For example, let’s say that you found an investment that earns 7% per year. You have a newborn child, and you’ve decided to save $100 a month. If you start right now, you have eighteen years of contributions and 18 years of growth. That $100 per month is going to grow to about $42,000.

Wait just one year, though, and that $100 a month will grow to only $38,000.

That’s right, waiting just one year on a $100 a month savings plan will cost you more than $4,000 when your child reaches college age.

The take-home point? Start saving sooner rather than later. You’ll be aided both by having more contributions in there as well as having more time for your investments to grow.

Next time, we’ll look at investing and saving for other goals, like down payments.

Related Articles:

• Roth IRA vs. 529 Plan: Which Is Best for College Savings?
• How to Save for Your Child’s College Education
• Six Biggest Myths About 529 Plans

The post 31 Days to Financial Independence (Day 24): Investing and Saving for Education appeared first on The Simple Dollar.

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7 Smart Tax Moves That Financially Successful People Always Do

UK motorists driving in France risk £117 pollution fine

Adam Williams

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New anti-pollution rules in France mean UK motorists driving through the country risk a fine of up to £117 unless they display the correct vehicle emissions sticker, according to motoring group the RAC.

New anti-pollution rules in France mean UK motorists driving through the country risk a fine of up to £117 unless they display the correct vehicle emissions sticker, according to motoring group the RAC.

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I Took My Part-Time Hustle From $12K to $30K in Just 1 Year. Here’s How

In the past year, I more than doubled my side hustle income.

And when I say doubled, I don’t mean I went from $500 in 2015 to $1,000 in 2016.

I made $12,000 from my side gig in 2015. But in 2016, I took home nearly $30,000, which many would consider a full-time income.

My original plan was to keep a full-time job in 2017 while ramping up my freelance income from writing and social media management. I didn’t plan to go full time as a freelancer until 2018. But because of a tough, unforeseen situation that won’t allow me to return to my full-time job, I plan to turn my freelance side hustles into a comfortable full-time income in 2017.

How I Got Started as a Freelancer

I started freelancing in 2011 as a college student. I was working full time and had a family, so I didn’t have much time to dedicate to a side gig.

But I was studying creative writing, and journalism piqued my interest, so freelance writing seemed like a natural fit. I was interested in higher education, finance, health and lifestyle, so I made these subjects my niches.

Eventually, I realized I wasn’t maximizing my earning potential as a freelancer. And I know there are probably so many people making the same mistakes I did when I got started.

Here, I’ll share the exact steps I took to maximize my earnings and how you can do so as well.

I Set Professional Rates From the Start

I hadn’t been writing as a freelancer for long, and I only had a few clips to present potential clients, so I thought I had to work my way up to professional rates.

But a recording from Ed Gandia, an award-winning freelance content creator and author of “The Wealthy Freelancer,” changed my perspective.

Gandia argues that setting professional rates from the start will make potential clients take you seriously, and you will be able to work less while making more money.

I used this rate sheet from Writer’s Market and reached out to other freelance writers I’d built rapport with to determine professional rates in my field.

At the time, I was writing blog posts for $15 or accepting work that paid 2 to 15 cents a word. I revamped this and decided I would accept no less than $50 per 500-plus-word blog post — and usually charge more, depending on the word count and research required.

As far as a per-word fee, I set my starting fee at 30 cents a word, which I also increase based on the complexity of the piece.

I now average $75 to $100 per blog post. One of my higher-paying clients pays $200 per post. My last per-word assignment paid 65 cents a word for 1,200 words.

I Started Pitching Clients Instead of Relying on Job Boards

I found work on Elance and Craigslist when I started freelancing. Most of it did not pay well, but I thought if I could find enough work, it was worth it. I spent quite a few hours searching job boards, writing intro letters and sending them off to potential clients.

Then I learned about pitching, which is when a writer comes up with an idea, does preliminary research and sends the proposal to an editor at a publication or marketing director at a business.

For many magazines, newspapers and blogs, a section editor is the person to pitch. Magazines usually have a masthead, which is a great resource to find editors’ information. Many online magazines and blogs also have a “Write for Us” or “Contact Us” page with detailed instructions on how to pitch an idea to the site.

Businesses are a little different. Generally, I pitch someone in the marketing department — usually a marketing manager.

At first, I thought the process would be too time-consuming to be worthwhile. Why do preliminary research on an idea that might not get accepted? I learned from other freelance writers that companies accepted only a tiny percentage of their pitches when they started out. But I decided to do a trial run, despite my reservations.

I started pitching blogs and publications I read often. These were easiest for me because I was most familiar with them. Sometimes, an idea would come to me that wouldn’t fit in any blog or publication I read. After fleshing out the idea, I would start researching publications the idea might fit into. For instance, I wrote an article about veterans, so I researched magazines that focus on the military and veterans’ affairs.

The pitch took a while to put together, but it landed me the 65-cent-per-word article I discussed previously — with a national publication.  

The key to pitching is putting in the effort upfront to impress your prospective client.

Here’s my step-by-step process for creating pitches:

• I come up with an idea for an article and research experts to interview on the subject.

• I craft a pitch that includes why the article would fit well in the publication, why it’s relevant to its readers, exactly how I’d format it and quotes from the experts I spoke with.

• Then, I fire it off.

Don’t get me wrong: I’ve had tons of pitches rejected — about 80% when I started out. But I kept sending them.

Sometimes, an editor wouldn’t reply at all. Other times, they would respond and tell me why my piece wouldn’t work. Every now and then, though, there would be an acceptance email.

I Let Go of Low-Paying Work

When I was writing blog posts for $15, I had a ton of work.

I’d contracted with a content company that had spreadsheets full of posts they needed written. I would sign myself up for 10 posts at at time. Most of them required some form of research and a specific word count. Each post took me an average of one hour to write, which translated to about $15 per hour.

But my one-hour time frame only came after I got used to writing this kind of content. There’s always a learning curve when it comes to writing for new clients, so in reality, I was making much less than $15 an hour because the posts took longer than an hour to write in the beginning. There were also times a post took more time to research or required interviews. I was earning a nominal fee for a ton of work.

After adjusting my rates and pitching potential clients, I realized these low-paying gigs were taking up valuable time.

In the end, I decided to let go of low-paying gigs, which opened up more time for marketing and writing for clients willing to pay more. On average, my hourly rate increased from $15 to $70.

I Kept Learning

One of the best ways to make sure you have the skills needed to compete in a competitive side hustle market is to keep learning.

I took a class on pitching clients to up my game. The class cost $299, but I made over $900 off one pitch I sent out after applying the strategies I learned.

Seasoned freelance writers Carol Tice and Linda Formichelli taught the class, and editors from national publications, like Redbook, were on hand to critique students’ work. The class focused on four major points of the pitching process:

1. How to flesh out an idea into a workable topic.

2. How to research publications where the idea will fit.

3. How to get quotes and interviews from experts.

4. How to take all this info and write a well-researched, solid proposal to send to editors.

I’ve just signed up for a class designed to help young freelance writers make more money. The class is a joint effort by Tice and Christina Vanvuren, who made $72,000 last year from freelance writing and social media management. Vanvuren set up each module as a step-by-step guide to help young freelancers get organized, set goals and leverage their experience as millennials to make more money.

I Joined a Community of People Doing the Same Work

This might be the most useful tip I can give when it comes to maximizing your side hustle’s earning potential.

A few years ago, I found and joined Tice’s online community of freelance writers, The Freelance Writer’s Den. I’ve been a member of for three years now, and it’s a nice mix of freelancing veterans and newbies. I’ve learned something from everyone I’ve interacted with.

In fact, all of the suggestions I’ve presented today I picked up from that group and implemented in my own career.

Whether you write, edit, photograph, walk dogs or make goods to sell on Etsy, it is beneficial to find a group of your peers to bounce ideas off of and learn from.

I don’t recommend joining the first group you come across. Do a little research to make sure the group will be worth your time. Here are some questions to ask yourself before joining.

• Is the creator of this group successful in the field I want to succeed in?

• Does the fee for the group (if there is one) seem reasonable?

• Will this group help me grow my side hustle?

Watch out for constant self-promotion and spamming. These are red flags that the group could be a waste of your time. Consider researching current members, if possible, and reaching out to them for more info.

Your Turn: Did you turn a minimal side hustle income into something substantial? How did you do it?

Nicole Slaughter-Graham (@nicoleg_86) is an editor at duPont REGISTRY Media and a freelance writer. She’s a true book-nerd and blogs about books and writing at manyhatsblog.com.

The post I Took My Part-Time Hustle From $12K to $30K in Just 1 Year. Here’s How appeared first on The Penny Hoarder.

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Find out how to beat the banks in February's issue of Moneywise magazine

Gary Adams

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February’s Moneywise magazine, which hits WH Smith stores today, will ensure you head into 2017 in the best possible way – by beating the banks at their own game in a world of low savings rates.

February’s Moneywise magazine, which hits WH Smith stores today, will ensure you head into 2017 in the best possible way – by beating the banks at their own game in a world of low savings rates.

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Get two FREE tickets to The National Homebuilding & Renovating Show

Moneywise staff

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Moneywise is offering readers two tickets each, worth £36 a pair to one day of The National Homebuilding & Renovating Show, which takes place at the NEC in Birmingham from 23-26 March 2017.

With more than 500 exhibitors, 16 free daily seminars and 35 master classes over four days, the show is essential for people aiming to start a new self-build, renovation or home improvement project or progress with one, which is already on its way.

Download your free tickets by 3pm on 22 March 2017 via the link below:

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5 Dumpster-Diving Treasures I Upcycled for $30 or Less

I am a dumpster-diving hipster.

I’ve been peeking in apartment complex dumpsters and checking the back of furniture stores since 2007, before it was called “upcycling,” back when Pinterest was nothing more than a quirky website my sisters used to plan their weddings.

Now, you can’t log in to Pinterest without seeing a “Quick Easy DIY Project!” or an upcycled wooden pallet project. Although Pinterest has ruled my browser search history for the past few years, I’ve found that many of these perfect pins end up costing you more to DIY than it would to just buy a brand-new piece.

But as long as you’re willing to check your local dumpster, I’ve found you can do most DIY projects for $30 or less.

Here are a few of my real-life, Pinterest-worthy projects that prove dumpster diving can help you create the home of your dreams.

1. Shoe and Storage Bench

$7.99 for one yard of fabric from Jo-Ann Fabric

$6.39 for one pack of batting and padding from Jo-Ann Fabric

$5 for one small basket and $10 for one medium-sized basket from Dollar General

Total cost: $29.38

A similar bench at Pottery Barn costs $399, so this DIY might have saved me about $369.62.

Where I Found It

I found this bench, which has helped me maintain some semblance of organization by my front door, sitting on a curb in a middle-class suburban neighborhood with a sign that read “JUNK. FREE.”

Total Trash or Obvious Treasure?

It had terrible, candy-cane-striped fabric, and although the paint was in good condition, the bench was filthy and smelled like an ashtray. My husband wanted me to leave it behind because it was clearly trash.

What I Did

To start this project, I unscrewed the wooden board holding the cushion onto the bench, and cut off the fabric and padding. Next, I cleaned off as much of the grime as I could using soap and water. I made sure not to completely soak the wood, which could have caused irreversible damage.

Using a hot glue gun, I secured the batting and padding onto the board, creating the seat. Once the batting was secure, I pulled the fabric over the bench — no sewing machine needed. Using a staple gun, I stapled the fabric in place on the back of the board.

Please note: If you have never worked with a staple gun before, it can be a little bit dangerous. Make sure to wear protective glasses and have a buddy to help you hold the fabric in place without getting anyone’s fingers too close to where you staple.

The stapling was the most frustrating part of the process, and caused several bouts of crying and general grumbling before it was complete.

Finally, I screwed the seating portion back onto the bench, put the baskets into the cubbies and voila! A shoe bench perfect for tying my shoes, hiding extra blankets and photo albums, and giving my front door a bit of pizzaz.

2. Armoire

$1.79 for paint brushes

$3.98 for a paint sample

Total cost: $5.77

A similar-size and -quality armoire costs $251 on Amazon, so this project saved me about $245.23.

Where I Found It

My armoire is, without a doubt, one of my best dumpster finds to date.

The trick to finding a great armoire to upcycle is to pay attention when a moving truck comes to your neighborhood.

If your neighbors are anything like mine (or the residents of several other apartment complexes I have lived in), an armoire is often the first thing to end up by the road instead of in the moving truck because of its size and weight.  

Total Trash or Obvious Treasure?

My armoire was somewhere in the middle of the trash-to-treasure spectrum. The inside was covered in stickers, so it had clearly belonged to a child.

It was also a little bit wobbly, which was easy to fix by unscrewing one of the legs a little bit to make it the same height as the other three legs. My husband tried to convince me it was trash, but I think that was mostly because it is very heavy and we had to carry it upstairs.

What I Did

I love the French farmhouse look when it comes to my furniture, which is easier to DIY than, say, a solid, perfectionist look. However, you can achieve nearly any look you like with a little bit of paint and a paint brush. The number of coats of paint you apply will determine how rustic or brand-new your finished piece will appear.

After two coats of paint from a Valspar paint sample (which was more than enough), I took a piece of sandpaper to some of the edges to give it that farmhouse feel. Within two hours, my dream armoire became a reality. This was one of my easiest projects yet, and painting the armoire was almost a zen experience.

Note that not all paint likes to stick on wood, particularly if it’s varnished. In these cases, it is best to ask the associate at your favorite home-improvement store to help you decide what paint sample to purchase. Alternatively, sand the varnish to make it rough, which will help the paint stick to the wood.

3. Wooden Crate Storage Shelves

$6.97 for one can of spray paint from Target

$2.50 for a pack of screws and anchors

Total cost: $9.47

Similar crates for shelves cost about $25 per pair, so I saved about $15.53.

Where I Found Them

Pinterest is full of great uses for wooden crates, so when I found two crates sitting outside my local Target, I knew I had to have them.

After asking the store manager for permission to take them and purchasing a can of turquoise spray paint, I was ready to begin.

Total Trash or Obvious Treasure?

When I found these crates, it was as though the heavens had opened up. Aside from a few spiderwebs, they were in fantastic condition. Evidently, they had been used to transport fruit, so they smelled a little better than other finds.

What I Did

My home office is important to me, so I knew turning these crates into bookshelves to hang over my desk would help me stay organized throughout the workday.

I began by spray-painting the crates outside. While they dried, I drilled anchors into the drywall to keep them secured to the walls.

Because of the weight of the books and the crates combined, it’s important to find a stud (see below) in the wall or to use anchors in the drywall. Just using screws alone in drywall means you risk the shelves and books falling on top of you, causing injury. When this happened to me, I not only lost my security deposit, but also sent my laptop to an untimely end.

To find a stud, I tap around the wall until I find the spot that sounds less hollow (like a dead spot). You can also buy an electronic stud finder if you prefer not to use this method.

Once the crates were dry, which only took about 30 minutes, I was ready to screw them into the anchors. If you don’t have a power drill, it is a great investment to make for projects that involve hanging anything on your walls. I purchased my power drill at The Home Depot for $28.83, but you can find most small drills for $25 or less.

If you don’t have access to a drill, you can use a screwdriver to safely secure the crate into the anchors, but it takes a lot more effort. You could also hang a project like this with heavy-duty nails — just be sure to nail through the crate itself and into a stud.

Within 45 minutes, the crates became shelves and the project was complete. This project involved minimal frustration, and I felt like I channeled my inner HGTV spirit guide.

4. Bookshelves

$3.98 paint sample

$6.72 for four-pack of L shaped brackets

Total cost: $10.70

Similar wall-hanging bookshelves cost around $22 for two, so this project saved me $11.30.

Where I Found It

We’ve all had that one bookshelf we bought in our first year of college for $20 that we never seemed to get rid of. That is, until the paper-like, mock-wood back panel detached and the entire shelf collapsed into a heap.

You’ll most often find these shelves in apartment complex and even local college campus dumpsters, and they’ll help you create a masterpiece. I found mine in the dumpster of my local university.

Total Trash or Obvious Treasure?

At first glance, it looked like I had just brought home a pile of garbage. Really — the original bookshelf had been ripped apart in a glorious show of exposed nails and splinters. But within that pile were two usable shelves.

(Note: I learned the importance of wearing gloves when you dig through a pile of wood. Don’t dig in the trash bare-handed. You will end up with more cuts, splinters and Tetanus shots than you want.)

What I Did

All you need are two or three of the center shelves from the bookshelf. I looked for shelves with at least one side of solid faux-wood.

To start, I painted my shelves with a color similar to the one I used for my crates. Since my office sometimes doubles as my niece’s bedroom, I chose a bright, kid-friendly color. While the paint dried, I got to work with the brackets.

When hanging the brackets for the shelves, it is important to not only use a measuring device, but a level as well. You can find free level apps for your smartphone that will do the trick. Mark on the wall where you want to screw in the brackets, and go ahead and insert the anchors.

Once I finished measuring, marking, drilling and hammering the anchors into the wall, it was time to screw the L shaped brackets into the bottom side of the shelf. When you screw the brackets into the shelves, you should use the measurements you used on the wall so everything lines up properly. I didn’t initially think about this and later had to fix it.

Once your shelves are on the wall, you can take them up another notch by screwing hooks into the underside of the lower one to hang anything else you might need. I use my hooks to hang my boxing gloves and wraps, while my niece uses hers to hang her artwork.

5. Chalk and Pin Board

$5.82 for one roll of chalkboard contact paper from Target

$2.98 burlap table runner from Walmart

Leftover spray paint from a previous project

Total cost: $8.80

Large chalk and pin boards of a similar size cost around $30, so this project saved me about $21.20.

Where I Found It

I live near a college campus, and when the students have all gone home after the fall or spring semesters, the curbs and dumpsters around my city seem to be filled with poster frames (usually featuring Bob Marley posters).

Total Trash or Obvious Treasure?

Treasure! Not only did I get a totally usable frame, but a Bob Marley poster as well — score!

What I Did

All you need is spray paint (in my case, it was left over from my wooden crate shelf project), a roll of chalkboard contact paper and a burlap table runner.

To begin, I took apart the poster frame so I was left with just the plastic frame itself. This proved to be somewhat of a pain because it began to bow, bend and nearly break at one point, so make sure to be extra careful when dealing with the frame alone.

Once I finished wrangling the frame, I spray-painted it and got to work on the rest while it dried.

I threw away the clear plastic part of the frame because I was feeling extra confident that day — if you save it, you get a do-over if you mess up the original project. You should be left with just the back of the frame, which is usually cardboard. If it isn’t cardboard, you will need to add some so your pushpins have something to stick into.

I covered half the front of the cardboard with the roll of chalkboard paper, which is self-adhesive. Using a hot glue gun, I attached the burlap to the other half of the cardboard, creating the faux cork board.

Once the frame was dry, the real challenge began.

The frame, already slightly bent from my clumsiness, didn’t fit well around the burlap. After a fair amount of wrestling, cussing and shouting at the frame, I was able to get it to go around the burlap part without popping off of the chalkboard side. I fastened it in place using the frame’s existing metal tabs.

Although this project was one of the seemingly smaller ones, it took the longest amount of time. In the end, it was totally worth it, because it has helped me stay organized with my work projects.

Dumpster Diving Pro Tips

While finding a great mattress is an important part of adulting, you likely won’t find it in the dumpster. The same goes for couches and most upholstered furniture. They may have been infested with fleas or bedbugs from their original home or from sitting next to a dumpster or curb for so long, or may have picked up smells that will never fully disappear.

It’s important to check any wood you find for termites before you bring it inside, or you might wind up with a very angry landlord (or be mad at yourself). If the wood seems to be rotting or flaking away in any spots, it’s best to avoid it. Not only will rotting wood not last long, but it can become moldy, warped and, in some cases, end up being dangerous to your health.

Before you take anything from a store dumpster or curb, make sure it’s up for grabs by checking with the owner. Not everything on a curb is meant for garbage pickup, and sometimes retailers reuse pallets and wooden crates.

Although some of these projects tested my patience, when I look at each piece, I feel accomplished. My total savings for all five projects was $662.88 versus buying the items brand-new.

Your Turn: Have you ever upcycled a dumpster treasure?

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Krista Lyons is a Tampa-based journalist and self-proclaimed poet. She has three cats who love to sit on her keyboard while she writes.

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