Tips for a Low Stress Tax Season

In this weeks blog Financial Planner Becky Eason writes about the big "T" word, that's right - TAXES!

As the end of 2019 quickly approaches, it’s time to start thinking about taxes. As we all know, tax season catches up with us very quickly with the hustle and bustle of the holiday season, and the recovery period in the weeks after the holidays.

Our goal is to make your tax season as low stress as possible. A great way to begin your tax season, is to create an easily accessible folder to keep all of your tax documents in. As you receive these documents in the mail you should open the mail and review the document, then put it directly in your tax folder. If you have any documents that you think may be important, include them in the tax folder and your tax preparer can review them to see if they need to be included with your taxes. I’m a firm believer in the fact that it’s better to have too much information than not enough. Once you believe you have received all of your tax documents you could do a document comparison to your prior year tax documents to make sure it looks like you have everything. At this point you can grab your folder and send the documents off to your tax preparer, or in the case of self-preparing a tax return, you can go ahead and get started.

If you have someone prepare your taxes for you make sure that you let them know of any significant changes that you’ve had during the year. Some of these significant changes would include a change in marital status, filing status, dependents, address, new driver’s licenses, change of income sources, and if you made any estimated tax payments during the year, especially if this is something that you haven’t done in the past. Failing to update some of that information could result in having a rejected tax return or losing out on potential tax credits or deductions. It’s much easier on all parties if you remember to update this information right from the start. In your tax document folder that we talked about earlier, you could keep a running note page with updates that you want to make known or questions that you might have.  

Another tip I have is to review your driver’s license. To help reduce identity theft, some states, such as New York State, require the information on your driver’s license to be entered prior to filing. Make sure that your license hasn’t yet expired and that it won’t be expiring during tax season. If your license is going to expire between the time of giving your tax preparer your tax information and the time that you will be e-filing the return, you will want to let your tax preparer know, because in some states your tax return can’t be filed if your license is going to expire.

As tax season approaches do your best to not feel overwhelmed. We are here to help you and answer your questions. 

Uncork Your Wealth - Discover the Difference Between HSA and FSA

In this week’s blog, Financial Planner Kerrie Beene, CFP® defines two benefit terms that often cause confusion:

The products available to us in the financial and healthcare industry can be confusing.  So, with the use of Health Savings Accounts (HSA’s) and Flexible Spending Accounts (FSA’s), we are combining the two worlds and this can be overwhelming when trying to pick a health care plan.  Healthcare plans vary from job to job and state to state, but most of the time the options include health care plans with HSA’s and FSA”s as one of the available plans, along with other plans. So what is the difference and should I choose one of these options?

Similarities 

• Both HSA’s and FSA’s are used in conjunction with your health care plan.  

• Both also reduce your income tax liability and help pay for medical expenses with pre-tax dollars

• You and your employer can deposit money into the account

• Debit/Credit Card offered to pay for expenses

• Must maintain receipts and records for expenses

Health Savings Account

• Used in conjunction with a High-Deductible Plan

  • For 2019, the IRS defines a high deductible as $1,750 for individuals and $2,700 for a family 

  • For 2020, the IRS defines a high deductible as $1,800 for individuals and $2,800 for a family

• Available to self-employed individuals

• Money deposited into the HSA is tax-deductible

  • Interest and earnings are tax-free 

• Withdrawals used to pay for medical expenses are tax-free

  • Withdrawals can be used for medical expenses, such as doctor visits, hospital stays, eyeglasses, contacts, dental procedures, prescription drugs, etc.

• HSA’s are portable

  • The account belongs to you 

  • You keep it even if you switch jobs

  • Money remains in the account from year to year, even if not used

  • Money can be invested within the account

• HSA funds can be used to pay insurance premiums if you are collecting federal or state unemployment benefits or you have COBRA insurance through a former employer

• The IRS also imposes contribution limits on the amount that can be deposited into an HSA account

  • For 2019, the maximum contribution is $3,500 for individuals and $7,000 for families, with a $1,000 catch-up amount for those 55 and older (including employer contributions)

  • For 2020, the maximum contribution is $3,550 for individuals and $7,100 for families, with a $1,000 catch-up amount for those 55 and older (including employer contributions)

Flexible Spending Account

• Used in conjunction with a Health Care Plan

• Not available to self-employed individuals

• Money deposited into the FSA is tax-deductible

• Withdrawals used to pay for medical expenses are tax-free

  • Withdrawals can be used for medical expenses, such as doctor visits, hospital stays, eyeglasses, contacts, dental procedures, prescription drugs, etc.

• FSA’s are not portable

  • The account belongs to your employer 

  • Money must be used by the end of the year or you lose it

    • There are a few exceptions some employers offer, such as being able to carry-over $500 or a 2.5 month grace period to use the funds. (Employers can offer either option, but not both)

• The IRS also imposes contribution limits on the amount that can be deposited into an FSA account

  • For 2019, the maximum contribution is $2,700 

  • For 2020, the maximum contribution is $2,750

• Employers often offer other types of FSA accounts 

  • Dependent Care Account - used to pay for eligible child and adult care expenses like daycare, before and after school care, nursery school, preschool, and summer day camp

  • Other FSA Accounts

    • Adoption Assistance

    • Transit and Parking

The most important things to do when trying to pick a health care plan:

• Understand your available options

• Know your annual healthcare expenses

• Understand the requirements for required documentation for tax purposes

• Don’t be scared to ask questions

Build Your Wealth by Taking Advantage of Benefits Open Enrollment

In this week’s blog, Financial Planner Kate Welker, CFP® defines top benefit terms to help demystify some of the confusing benefit terms.

In the next few weeks you may open your mail or email to see notices regarding open enrollment season through your employer. Open enrollment is a period of time you can make changes to your employee benefit options that are normally restricted. This is also a great time to review your entire benefits package and make any other adjustments as well. Let’s walk through a few options you may be looking at.

Health Insurance is the main thing most people think about during open enrollment. Compare the components of the plans offered and look beyond the premium. You will want to compare the deductibles, co-pays, and which providers are in-network. Also take the time to review the prescription plans against your current medications to see how those are covered.

The FSA or Flexible Spending Account is the next thing to consider. A flexible spending account allows you to contribute pre-tax dollars to cover out of pocket medical expenses including co-pays, medical supplies, dental, and vision expenses. If your benefits include access to an FSA this is a way to lower your taxable income and pay for expenses you would incur anyways. You will have to decide how much to contribute each pay period. Be sure to review the plan terms and not to contribute too much. If you have a balance at the end of the year the plan will allow you to either roll over $500 or spend it within a grace period.

The HSA or Health Savings Account is an option to consider if you have a high deductible health plan. To qualify you must have a deductible of at least $1,350 for an individual and $2,700 for a family plan. The contribution limits are much higher and depend on the type of insurance and other benefits you have. Like an FSA this account is used to cover out of pocket medical expenses and is an income tax deduction. Unlike an FSA, an HSA balance will roll forward year to year and the growth on the account also grows tax-free. Be sure to look for an employer contribution that may be offered and take full advantage of that contribution.

Dependent Care FSAs are like the medical FSAs, but for childcare. This includes daycare, preschool, summer day camp, and after school programs. Also included is adult daycare. If an adult is your qualifying tax dependent and they require care while you work this is an eligible expense. With a DCFSA you are able to contribute up to $5,000 pre-tax.. Some employers also offer a matching contribution into these accounts.

Other Benefits may be available to update at this time as well. Reach out to your HR department to ask about your benefits package and see if there is an option you were not aware of. Some employers offer additional insurances like pet insurance or unique legal services.  

Block out some time for yourself to be able to really read the information you are given and consider your options. Look at the bigger picture benefits like tax savings, lower taxable income reported, employer matches, and the satisfaction that you are getting the most benefit out of what is offered.

Peripheral Vision - A Wealth Strategy?

In this week’s blog, Financial Planner Amy Irvine, CFP®, MPAS®, EA, CCFC® explores a topic that many suffer with - using our peripheral vision to achieve our financial and wealth strategy goals. What are the barriers that many of us create? Are they real or perceived?

By: Amy Irvine, CFP®, MPAS®, EA, CCFC®

The other morning I was standing at the kitchen sink and I noticed two mosquitoes trapped between the screen and the window.  I slowly cranked open the awning type window to help them escape. I was intrigued as I watched them. At first they both continued to try to exit “through” the glass, but then one of them realized the opening at the bottom, flew out and landed on the opposite side of the glass.  The other one continued to struggle, banging repeatedly into the glass.

In my little mind, I could envision the one that escaped saying, “stop, look down.”  I stood there for probably 2 - 3 minutes longer watching this activity, thinking, go get your friend, show her the secret.  Coach her!

Isn’t it funny that no matter the species, we all have our panic defaults.  We all sometimes forget to use our peripheral vision to look at the situation differently.  We forget to step back and see what’s around us, what other solutions might exist? Have you ever found yourself trying to go “through the glass” time after time and ended up with the feeling of enormous stress?  Feeling defeated because you couldn’t achieve what you could see others doing, but just couldn’t figure out how they did it?

I’ve been there too.  It’s frustrating to say the least.  Sometimes it about money, career, professional or personal relationships, kids, parents, or even health.  

I often see this when we start working with a new client too.  Let’s face it, people don’t wake up one day and say, “I think I should work with a financial planner.”  Something is usually frustrating them and they’ve gotten to the point where they are on the inside of the glass and they see what everyone on “the other side” is doing, and just need someone to be that guide and show them what in their peripheral vision.  I’ve found that they often need to change their mindset.

That is why I was thrilled when I was recently introduced to Holly Segur, who is going to be on the Wine and Dime podcast in two weeks; she is a mindset mentor.  What does that mean? Holly focuses on three different mindsets, Money, Career and Personal. Of course when I heard money mindset, I just had to explore!  

I was thrilled when I heard the questions she was asking people to think about.   The idea of removing the barriers you’ve self-imposed and instead of continuing to go through the glass, go around it, or underneath it.  Many of the questions are very similar to the same questions we ask clients when we first get to know them - what are your doubts, fears, barriers?   Notice that these are all potential windows that we can’t seem to get through?  

As a starting point to growing your wealth, take a deep breath, sit back for a few minutes and explore these three questions in a journey to discovering your money mindset:

1. If money wasn’t a barrier, what you you change in your life?

2. What is the barrier?

3. Is that barrier real or do you just need someone to show you the peripheral views?

3 Things to keep your Money "In Control"

In this weeks edition of Monday Morning Quarter-Buck, Financial Planner Kerrie Beene, CFP® discussed building wealth by keeping your spending “in control.” We all have busy lives and often do the “next thing” that is needed without realizing how much that is actually costing us.

In a recent conversation with a friend, we were laughing about how little we made when we first started our careers. What we lived off of and how did we do that? As our careers have grown and our lives have gotten busier, we focus on what’s important to us at that moment. This has a name - “life style creep.”

Often we are asked, “will I be able to retire with “x” dollars in the bank?” That answer to that question often is based around your desired lifestyle in retirement, in other words, how much do you spend?

Have you experienced life style creep? Here are some tips to help you take control.

By: Kerrie Beene, CFP®
Valiant, Oklahoma

Not sure everyone would admit it, but I bet there have been times when you were paying for something and you had to stand there and wonder if the transaction would go through??  Or when you go shopping and you plan to spend around $200 on your purchase but then once the swiping begins you have no idea how much you have spent but surely it is only like $205 so you should be fine, right?  And then you are wrong and you spent $450! This is mindlessly spending.  

Another way we mindlessly spend is by just ignoring what we spend our money on and how much money we actually have in our account.  With modern technology, most people just login to their bank and check their balance. This gets the job done and can be somewhat managed.  However, it is better when we have more control and some idea of how much we spend on each category. It is still really good to know where your money is being spent.

As a financial nerd, I have tried every way to budget, track expenses, and maintain sanity when it comes to our family spending.  I have tried online programs like mint.com, YNAB, Dave Ramsey’s budget tools, extreme spreadsheets, and I could go on and on. I have made my husband try all sorts of ways to budget and track our spending.  I also have spent time periods where I didn’t budget and didn’t track my spending but this way gives me too much anxiety and makes me feel like I do not have control over our money. And sometimes, being in control is just knowing your true account balance and what you have spent your money on, even if you are broke, at least you are in control.  I do still use mint.com for an overall picture, but here are 3 ways that give me a sense of “control.”

1. Balancing my Checking Account - with current technology, the majority of us do not balance our checkbook.  Heck, some of us may not even know how to balance a checkbook. However, I have found that the task of logging on and balancing my account gives me reassurance that I know what is going on with the money.  Also, if you are married and the one who keeps up with the financial stuff, a simple text or conversation updating your spouse every day or two keeps everyone on the same page.  

   The habit of balancing is something I do normally once per day or every other day.  It really doesn’t take much time when you do it this often. When I get busy and miss 3 or 4 days, that is when I feel out of control.  I may not be out of control, but this is how I feel. And often the way we feel, affects how we spend.  

2. Track Expenses - the second thing that I do that is a little more time consuming is track expenses.  This can be done manually with an excel sheet, plain ole pencil and paper, or you can use an online tool like mint.com that does it for you.  Either way, taking just a few extra minutes each time you balance or even once a week, shows you where the money is going. This gives a sense of control, even if you did not create a budget ahead of time, at least you know where the money is going and who you should be mad it.

3. Have 2 Checking Accounts - the 3rd thing that makes No. 1 and No. 2 go smoothly, is have at least 2 checking accounts.  The 2 accounts we use are one for bills and one for living expenses. This makes it easy to keep up with bills vs. living expenses.  By making sure the bill account has all the money needed for monthly bills we do not have to worry about spending more than we should on living expenses… plus there is no mental math to do when we are busy and login to our accounts.  Mental math has to be done when you have one account and the bills come out but at a later time so you have to figure out what can’t be touched. No one wants to do mental math.

These are three things I have done for years and have helped us stay on track during our busy everyday lives. If you are interested in getting help with any of these 3 things or interested in our Busting Bad Budget Habits class, reach out to us at rootedpg.com or feel free to email me at kerrie@rootedpg.com

The Intersection of Vegetables and Finance

Monday Morning Quarter-Buck

By Financial Planner Becky (Partridge) Eason

Hornell, New York

Did you know that today, June 17th, is national eat your vegetables day? What better time to talk about getting vegetables on a budget! A common misconception is that it’s expensive to eat healthy. There are ways that you can eat healthy and actually save money, especially during the summer if you live in the north.

The biggest way to save money on vegetables is to have a garden. Even for those of you living in cities there are options for gardening available to you as well. If you don’t have a yard you can try small window or balcony planters. Also, many cities offer community garden plots where you can have your own section of a garden to grow what you want. A pack of seeds usually costs in the range of $1 - $3. Think about how many yummy veggies you can grow for $1 - $3, you’ll be well on your way to saving lots of money. Not only do you get to save money but you also get to enjoy the fresh air while working in the garden. The best part is that in the end you get to eat the “fruits of your labor”.

Another way to eat your veggies on a budget is to shop at your local farmers markets and roadside stands. You will likely find fruits and vegetables at a fraction of the cost of chain retailers. Not to mention the fruit and vegetables will be much more fresh and you will be supporting local farmers.

There are also ways to save money on produce at your regular grocery store. For instance, many stores offer “family packs”. These “family packs” are a larger quantity of produce usually sold for a lower price per pound. Remember though that if you know you won’t be consuming the food before it spoils, you won’t be saving money if you have to throw out the extra food.

Eating your vegetables doesn’t have to cost a lot of money. In fact, for a family it’s almost always cheaper to buy your vegetables and cook at home than it is to go to a fast food restaurant, not to mention the health benefits!

FAFSA Planning for Business Owners

Monday Morning Quarter-Buck

By Financial Planner Kate Welker, CFP®

Hornell, New York

Graduation season is upon us! I’ve been filling up my calendar with graduation parties and seeing the social media posts showing the first day of kindergarten next to the last day of senior year. If you have a child entering high school or nearing graduation your mind is likely full of thoughts about their future, college plans, workforce plans, proper high school coursework, the right extracurricular activities, and if college is in their future how to finance it. One of the big steps in the college process is filling out the Free Application for Student Aid (FAFSA) form and working that to your advantage. There are many opportunities for planning around this that a financial planner can help you work through, I’d like to focus on opportunities for small business owners.

Being a small business owner comes with many challenges, but it also allows for some nice flexibility in your business decisions and how they will affect your income in the college planning years. Ideally, you will begin thinking over strategy when your child is starting high school, but even if they are a senior you can make changes now to help in future years. Keep in mind that each school year will base aid off of the tax return from 2 years prior. For example the 2019-2020 school year aid will be based on the 2017 tax return. Moves made in 2019 will affect the FAFSA for the 2021-2022 school year. If your student will be in 11th grade this fall, this tax year is the first that will be looked at when determining financial aid.

As a business owner one of the big numbers you should be looking at each year is the net income on your tax return. This is also the number that will be reported on the FAFSA. Following are some strategies to consider to help make that number lower, or choose to make it higher in certain years.

Business Assets

A major perk of being a small business owner is that you do not need to report the value of your business or farm. There are requirements to be able to meet this exclusion including being family owned and having less than 100 employees. Finaid has a nice summary of the requirements at http://www.finaid.org/fafsa/smallbusiness.phtml.

This includes the overall value of your business and the assets held by the business. The year a new asset, such as a piece of equipment, is placed into service you have the ability to accelerate the depreciation and claim a Section 179 deduction. This will allow you to write off more of the asset and lower your income. This does leave you less to expense the following year and can lead to capital gains down the road when you sell that equipment, but if planned out properly this can work to your advantage with financial aid.

Income Timing

When you are the boss you can choose when to work, you can also determine how and when you are paid. If you are looking at accepting a job that will bring in significant revenue, you will want to take some time to determine if you should accept the job at the moment, or if pushing it back until January would be beneficial.

For example, In December a contractor wins a bid for a job with a large profit margin and the client wants to pay the down payment. If the client is willing to wait until January to start the agreement (if they are a business they may also want their tax deduction so you will need to be aware of that) you can shift that income into the next tax year. You will have that income to deal with the following year, but you have more time to plan on ways to offset that.

High and Low Year Cycles

Another concept to think about is choosing to have a low income year followed by a high income year. If you know that your income levels will make it difficult to consistently keep your income low enough to qualify for aid you can strategize to lump income and deductions in a way that would benefit you in certain years.

Say you had a really good year and know that you will not be qualifying for aid that year. Maximize your income that year; try to bring in funds that are pending, close contracts before the end of the year, and hold off on large purchases. The next year you would focus on maximizing your expenses and achieving a lower income.

That is just a high level look at some complex strategies. There are tax and accounting laws that need to be worked within and tax implications to consider as well.  If you are a business owner and you see ways in your business to make this work I encourage you to reach out to a professional to help you walk through the plan for you.

Financial Planning Strategies: “Improvements” to Retirement Planning

“Improvements” to Retirement Planning
By Financial Planner Kim Anderson, CPA
Fargo, North Dakota

The U.S. House of Representatives recently passed the “Secure Act” legislation and it’s widely expected to move forward in the Senate.  In part, the legislation’s purpose is to make it easier for employers to offer 401ks to their employees and to let workers guarantee how much income their retirement savings will produce by using their assets to purchase annuities.  It removes the IRA age limitation and increases the RMD age to 72.

I want to address each of these “improvements” to America’s retirement savings problem.

401ks offered by employers can be a good thing, but they are not necessary to be prepared for financial independence/retirement.  A few years ago my (then) employer offered a 401k where I could enter the plan only after completing one year of service, then only in the quarter after that.  If I missed that deadline, I had to wait until the beginning of the following quarter. On top of that, the employer did a ZERO match. Unfortunately for the employer, the 401k plan put in place was not well utilized by the employees and therefore the allowed contributions by the owner (for his own retirement nest egg) were quite low due to discrimination testing.  As you can see, even though the employer DID offer a 401k, for most of his employees the 401k was not a “benefit” and in turn, was not much of a benefit for the owner either.

Fast forward to last week when I had the opportunity to look at annuities for a retired couple who, in 2017, purchased three annuities.  I asked them how it came about that they purchased three of them. “Well, we were offered a free dinner.” After that, the salesman called and set up a one-on-one appointment and told them how wonderful the products were.  During our discussion what the couple learned was that the surrender fees were HUGE – starting with 10% or so the first year, 9 point something percent the following year, and declining a percent or so per year each year for 10 years until the surrender charge went away.  Given the cost of annuities is this really the best our lawmakers can do?  Just for fun, plug some information into this annuity calculator to see how much a single premium annuity would cost to deliver guaranteed income to you.  Keep in mind that once you give up that lump sum of money to fund the annuity, should you need say, $50,000 or so to pay for your kitchen remodel, you will need to save it to the tune of $5,000 per month for 10 months.  Meanwhile, if you are saving that money for a kitchen remodel, what are you going to use to live on? The good news about annuities is that they provide a steady stream of income but the bad news is that they are expensive, you lose flexibility, and unless you purchase a COLA rider for an additional cost, your $5,000 per month now will be $5,000 per month 20 from now when prices for goods and services have likely increased.

To continue the annuity conversation, Bankrate.com tells us that the average 401k balance rose to $103,700 in Q1 2019.  How much of a guaranteed income via an annuity do you think that will buy?  Plug that 401k balance into the USAA annuity calculator provided above to find out.  Combine that steady stream of income with the average $1,200 per month Social Security check then subtract your monthly expenses (don’t forget about health care expenses that run the average retiree about $6,000 per year).  Now tell me how much you have left for travel to see the grandkids….

However, that’s not to say that all annuities are the wrong answer, for some people they create income that is the proper solution.

As for the ability to contribute to an IRA until the day you stop working, well, it’s a small fraction of people that I work with who want to work until age 72.  In fact, I have a hard time talking them out of starting social security at age 62. So if people want to start drawing social security at age 62 and completely quit working at age 65, is it really a benefit or incentive to be able to contribute to your IRA until the day you die?

So how do we deal with the lack of retirement savings problem?  Do we have an income problem? Or is it more of a spending problem?  If it is a spending problem, is it also a spending priority problem? If someone is not willing to give up (at least temporarily) a $150 per month “extra” expense in order to put that money toward an emergency fund or retirement savings, is the national lack of retirement savings problem really going to be solved by moving the RMD age to 72 – or by any of the above “solutions” created by Congress?

Rooted Planning Group’s Financial Coaches are in the business of helping people live intentionally.  Our clients gain control of their money and their lives by telling their money where to go rather than letting it aimlessly wander in and out of their checkbook.  Our clients learn to be intentional about how they’re spending money so that you can enjoy life now AND later.

Getting your retirement fund into shape is like trying to get your body into shape. You make the decision to take steps every day to take care of your body, and over time, those choices add up to a slimmer, healthier you. The same applies to retirement savings. Take steps every day—and over time, you’ll discover that your retirement fund is taking shape!

This is your retirement wake-up call! Don’t base your future on the assumption that Congress will ensure you have the money to retire – contact a Rooted Planning Group Financial Coach today to start living intentionally.

Monday Morning Quarter-Buck: The Boston Marathon and Money by Kerrie Beene

Happy Tax Day!  While we find this day to be one of the most stressful overall days of the year with last minute decisions and actions, the team made a commitment this year to make sure we managed our stress with healthy behaviors like exercise and eating right.  What does this have to do with finances? Read below as Financial Planner Kerrie Beene shares her experience on this journey. We also want to wish all of the Boston Marathon runners the best of luck today!!

The Boston Marathon and Money

By Financial Planner Kerrie Beene

Rooted Planning Group

April 15th is Tax Day but even more exciting than that, it is Boston Marathon Day.  A marathon is 26.2 Miles. There are around 570 marathons held each year in the United States.  Around 24% of runners have run a marathon, which accounts for 0.5% of the U.S. population.

The Boston Marathon is one of the World Marathon Majors - these are the top six annual marathons run in major cities around the globe.  The other five are held in New York City, Chicago, Berlin, London, and Tokyo.

The first Boston Marathon was ran in 1897.  It is always held on the 3rd Monday in April, also Patriot’s Day.  The day is a state holiday in Massachusetts and Maine and all local offices and schools are closed.  

Every year since 1903, the Boston Red Sox, play a game the morning of the marathon.  After the game, spectators head to Kenmore Square and cheer on the runners. There are other fun traditions held each year, such as, the scream tunnel and Greek inspired wreaths for winners.  Unfortunately, in 2013, was the Boston Marathon bombing where explosives killed three people and injured hundreds.

The Boston Marathon attracts around 500,000 spectators each year to watch the 30,000 qualifying runners.  The Boston Marathon has a serious registration process that begins in September the year before you would like to race.

To begin the registration process you have to be 18 years old and already ran a marathon with the International Association of Athletics Association within the last 18 months.  Eighty percent of entries are reserved for the fastest qualifying times. Unfortunately, even if you qualify that does not mean you will get to run. For the 2019 race, more than 7,000 entries were not accepted.  

Example of Qualifying Standard:

• 40 Year Old Male - Qualifying Time - 3 Hours and 10 Minutes (Under 8 minutes per mile)

• 40 Year Old Female - Qualifying Time - 3 Hours and 40 Minutes (Under 9 minutes per mile)

• 20 Year Old Male - Qualifying Time - 3 Hours (Under 7 minutes per mile)

• 20 Year Old Female - Qualifying Time - 3 Hours and 30 Minutes (Around 8 minutes per mile)

Male and Female Winners of the Boston Marathon receive:

• $150,000 for 1st Place

• $75,000 for 2nd Place

• $40,000 for 3rd Place

Reading about the history of the marathon and the associated facts is fun.  However, I do not foresee myself running a marathon anytime soon.

Most people, including myself, jump on and off the exercise bandwagon many times throughout our adult lives. I have been exercising for a while now and see myself continuing.  I have created a habit and enjoy the endorphins. I do it for my health and so should everyone, but could it also make us wealthier?

The answer is yes!  Some of the answer comes from personal experience and some of it comes from facts.  My experience has taught me that when I do one positive activity, it encourages me to do another positive activity.  For example, I notice when I exercise I am naturally attracted to healthier foods and vice versa. When I do not exercise, I warm up a honey bun after dinner and then binge watch Netflix.  Well, I watch Netflix regardless, but I feel less guilty if I am not eating a honey bun. The other thing that I have noticed is that when I exercise, my house is cleaner and I don’t mind cooking at home.  On the days I exercise, my endorphins keep me moving and I come home and am in the mood to get to cooking or even pickup my house and then cook. I also look forward to doing things outside, like yard work and cleaning outside.  While, this is not formal research, it is real and I see the results.

More formal research shows that one cost saving advantage of exercising is our medical bills.  We all know the multiple health reasons to exercise but The Lancet states that, just walking 150 minutes per week will result in $2,500 less per year on Healthcare.  

The FI Introvert website shows other ways fitness can also save you money by simply eliminating one behavior for a healthier, more enjoyable behavior:

• Walking and biking rather than driving saves on car maintenance and gas

• Hiking and taking in nature’s scenery rather than scenes from a movie saves on sedentary entertainment expenses

• Buying fruits, vegetables, and unprocessed meat rather than expensive and nutritionally weak processed meals saves on food costs

• Drinking water is less expensive than sugary soda and other drinks

• Going out and playing sports saves money on mindless cable TV consumption

• Save on alcohol and cigarettes by not wanting to negate the gains from your investment in your health

So, at the end of the day, maybe the Boston Marathon is not on your bucket list, but exercising should become a daily habit…. It will make you healthier and wealthier.

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