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Whiners

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I have a lot of friends and family in different financial stages in their lives.   Some are deeper in debt than I am, others are just starting to dig their own pit, still others have paid off every cent of debt they’ve ever used.    That’s okay;  as they say, it takes all kinds to make the world go round.

Out of all of those, the only ones who irritate me are the spendthrift whiners.  These are the people who spend 28 days a month struggling to make ends meet and complaining about how hard their lives are.   They make snide comments about how easy other people have it, and act like they are being cheated out of their birthright whenever anybody does anything fun that they can’t do because they are too broke.

The other two days—or sometimes three—of the month, are payday.  These are the days the the spendthrift whiners try to make themselves feel rich for 24 hours, while wondering why you aren’t willing to hit the fancy restaurants and expensive vacations with them. This is the day they will buy a dozen moves, or a new home theater system, or a big screen TV.  It’s the day they will drop a non-refundable deposit on an exotic vacation, or shop for a new car. Before they know what’s happening, the money is gone and they are broke again until next payday, condemned to whining about their horrible situation, while their spendthrift-whiner friends and neighbors complain about the injustice of having to go without luxuries while our hypothetical spendthrift whiners have a  big screen TV and an exotic vacation to Dubuque booked.

These people give no thought to the future.  Their life savings consist of depreciating electronics and a fancy scrapbook.  What do they do when life catches them by surprise?  They come begging for a loan, or charge the emergency to a credit card while complaining about the cost of interest.  Ultimately, everyone who plans ahead and sets some money aside is obviously trying to rip them off, because nobody can actually do well for themselves without being crooked.

They are absolutely convinced that life is too hard to succeed, and they refuse to examine their own behavior to find the cause of their problems.

Until payday.

What’s your biggest financial pet peeve?

 

This was originally a guest post  written for a blog swap run by the Yakezie personal finance blog network to answer the question “What is your biggest financial pet peeve?“  It ran on Faith and Finance.


UFC: Salary or Prize Purse

Business

Ultimate Fighting Championship
Ultimate Fighting Championship (Photo credit: ATempletonPhoto.com)

A gig in the UFC must be pretty lucrative, right? I mean, look at the top UFC earner Chuck Liddell. His lifetime total pay-per-view career bonus earnings since is estimated at over $4.3 million. Tito Ortiz isn’t far behind with just over $4 million. And what do the lower ranking fighters earn? Two thirds of them are estimated to make less than $100,000 per year. That’s gross salary. Take out insurance, taxes, equipment, and license fees and the payout isn’t as sweet at the bottom. Some office drones take home more money than UFC fighters do. And those drones don’t have anything close to the job hazards associated with the UFC.

So what gives? Why the huge discrepancy? They all get the shit kicked out of them at one time or another, right? MMA in general, UFC in particular, has been criticized for paying athletes much lower salaries than similar sports like boxing. The controversy led UFC President Dana White to defend the salary structure of UFC, in part saying that no one knows exactly how much top fighters earn because the fighters don’t want anyone to know how much they earn. He went on to say that the UFC pay structure “smokes” boxing’s pay structure, yet gives little insight into such insight.

So what do the fighters make? President White jumps around the issue in a Fox 11 Sports Interview from September 2012. While he insists that there’s a guaranteed amount, he dances around the question, insisting that “the guys get paid a lot more money than what you’re seeing on things.” He admits that bonuses and incentives make up part of the pay structure. Obviously the amount of the prize money correlates directly with the hype surrounding the fight.

How much? Well, not all bonuses are made public. In fact, the athletic commissions didn’t even release prize purse information until 2004, so it’s impossible to account for UFC 45 back. And currently the only prize purse amounts that are released are Fight of the Night, Knockout of the Night, and Submission of the Night. The rest of the bonuses beyond that, including sponsorship money, pay-per-view cuts, and other “locker room” bonuses aren’t even publicly reported. But new UFC rules require sponsors to pay the UFC for the right to provide sponsorship for fighters, a stipulation that leaves less money that goes directly to the fighter.

Dana White says that the fighters are free to share their income figures if they like; their contracts do not gag them from releasing the amounts. Yet it’s difficult to pin down the exact amount the UFC grosses each year from ticket sales, pay-per-views, merchandising, DVD sales, and video games. Fighters like Jon Fitch and Tim Kennedy have publicly spoken out against UFC’s pay schedules. In fact, Kennedy stated that emptying trash cans pays better than the UFC. It’s further proof that it’s all about the purse.

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Ignore Your Budget

Finance

IMG_1144
Image by Boz Bros via Flickr

For the first year of our journey out of debt, we had a strict budget, with all of our discretionary money spent out of an envelope system.  We had an envelope for groceries, one for discretionary spending, one for clothes and one for baby crap.   At the beginning of the month, we’d divide the money into the envelopes according to our budget spreadsheet.  If we used a card for anything, we’d take a matching about of money out of the appropriate envelope and put it in a box to get reconciled the next month.

Ugh. Almost 2 years later, it has turned into too much work and too much nagging about everything either of us put on a card.

We decided to simplify the system a few months ago.   Now, we still have a budget.  It’s even a zero-based budget, but we ignore it.  We only look at it if something changes for the worse.  If something changes for the better, the extra money just gets automatically rolled into our debt snowball, so there’s no need to worry about updating the spreadsheet.

Instead of envelopes, we kind of eyeball it.   We budget $450 per month for groceries, so we aim to spend $100 on our weekly grocery run.  That leaves some room for losing track of how much we are putting in the cart, or a last minute addition to the list.  It also leaves room for our secondary grocery trip to buy bread and milk later in the week.  We do go through a lot of milk at my house.  We budget $55 per month for diapers, but the deal we are currently getting with Amazon Mom is only costing us $30.79 for 6 weeks of diapers.  We ignore the difference.

This—and our heavily automated bill pay and savings—lets us keep our finances on track, without stressing over every dollar or fighting over every little thing that comes home unplanned.   I used to fire up Quicken and balance the checkbook every week.  Now, that happens at the beginning of the month, usually.  If I forget, it doesn’t matter.  At the beginning of February, I balanced the checkbook for the first time in almost two months and we never came close to exercising our overdraft protection account.  In fact, we had some extra, so that got sent directly to our debt.

Overall, it’s been good to test out a new system.  We have almost no financial stress and managing our money takes about a couple of hours per month instead of per week.  It’s all win.

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All About Tax-Sheltered Annuity Plans

Finance

This is a guest post.

If you’ve previously heard of tax-sheltered annuity plans but are unsure of what they are, let this guide help you. Here’s what you need to know about tax-sheltered annuity plans.

What is it?

First things first, what are tax-sheltered annuity plans? A tax-sheltered annuity plan, or a 403(b) plan, is a retirement plan for some employees of various institutions to participate. This plan allows employees to contribute a portion of their salary to the plan. The employer may also contribute to the employee’s plan.

Who is Eligible?

Eligible Code Section 501(c)(3) employees tax-exempt organizations may participate, an employee of a public school, a state college, or a university, and eligible employees of churches. Employees of public school systems organized by Indian tribal governments, Ministers employed by Code Section (501)(c)(3) organizations, and self-employed ministers may also participate. Ministers must be employed by organizations that are not Code Section 501(c)(3) tax-exempt organizations, and they must function as ministers in their day-to-day professional responsibilities with their employers.

What are the Benefits of a 403(b) plan?

In a 403(b) plan, contributions are tax deductible. Taxes are paid on distributions in retirement, which is when a lot of people are in a lower tax bracket. As mentioned earlier, employers can match 403(b) contributions on a pretax basis. Loans can be taken against a 403(b) plan, which will help in certain situations, like buying your first home.

What types of contributions can be made?

In a 403(b) plan, you can have several types of contributions:

  • Elective Deferrals – These are contributions made by the employee under a salary reduction agreement. This allows an employer to withhold a certain amount of money from an employee’s salary to deposit it in their 403(b) account.
  • Nonelective Employer Contributions – These are any contributions to the 403(b) plan that were not made under a salary reduction agreement, which include matching contributions, discretionary contributions, and certain mandatory contributions that were made by the employer. The employee will pay income tax on all of these contributions, but only when they’re withdrawn.
  • After-Tax Contributions – These are contributions made by an employee, which are reported as compensation in the year they were contributed and are included in the employee’s gross income for income tax purposes.
  • Designated Roth contributions – These are elective deferrals that the employees elects to include in their gross income. The plan must keep separate accounting records for all contributions and for all gains and losses in the designated Roth account.

Can Employees Exclude Employees From Contributing?

Absolutely. The 403(b) plan must allow allow employees to make elective deferrals under the plan, but under the universal availability rule, if the employer permits one employee to defer salary by contributing it to a 403(b) plan, they must extend the offer to all of their employees. The only exceptions are employees who would contribute less than $200 annually, those employees who work less than 20 hours a week, employees who participate in a 401(k) or 457(b) plan, or students performing services that are described in Code Section 3121(b)(10).

So When Can Employees Get the Dollars?

Employees may withdraw from the 403(b) plan when the reach the age of 59 and a half, have a severance from employment, have a financial hardship, or become disabled. Money can also be taken out if an employee passes away. The employee will have to pay taxes on the amount of the distribution that was not from designated Roth or after-tax contributions, and they may have to pay an additional ten percent early distribution tax.

Are There Rules for In-Service Transfers or Exchanges?

Yes. Contract exchanges with a non-payroll slot vendor are permitted only if the plan permits it, the accumulated benefit after the exchange is, at the very least, the same as before the exchange, if the employer and the non-payroll slot vendor agree to share information regarding the plan’s terms, if any pre-exchange benefit restrictions are maintained after the exchange, and if the vendor complies with the terms outlined in the plan.

How Much Can be Contributed Annually? Does the Employee Have to be Current?

As of 2013, the maximum combined amount that an employer and an employee can contribute to a 403(b) plan is $51,000. That number may go up, depending on the annual cost-of-living.

If the plan allows, an employer can contribute up to the annual limits for an employee’s account for up to five years after the date of severance. No portion of the contributions can come from money that was due to be paid to the former employee, and these contributions must cease if the employee passes away.

There’s much more to learn about a 403(b) plan, but these are the basics. Does your company have a 403(b) plan?

 

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How Do WWE Stars Make Money?

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Have you ever wondered how your favorite WWE stars make their living? The answer can be complicated, because many of the biggest stars receive benefits above and beyond their salaries, and because the salaries vary

Darren Young & Nick
Darren Young & Nick (Photo credit: Climbing Kilimanjaro)

greatly between the true “star” wrestlers and less famous WWE competitors. Here is a look at how WWE wrestlers are paid:

Base Salaries
All WWE wrestlers are signed to a contract and paid a base salary. The contracts generally range from 1 to 5 years and the salaries vary widely. The biggest WWE names can make over a million per year, while the average WWE wrestler is more likely to make something just north of $100,000. The highest paid wrestler is Triple H, who draws a base salary of about $2,000,000 per year. Other superstars, like John Cena and Shawn Michaels, make about $1,000,000. Most other wrestlers hover closer to the $100,000 average, which sounds like a lot, but must take into account the fact that wrestling careers can be relatively short and physically demanding.

Licensing Deals
The gap between WWE’s stars and run of the mill wrestlers is even wider than the salary differences suggest. That’s because the stars’ contracts include benefits that pay off big time. Many of WWE’s biggest stars receive licensing deals to use their likeness in advertisements and WWE promotions. This can become a major source of income for top wrestlers like Triple H and John Cena.

PPV Bonuses
Additionally, wrestlers who participate in Pay Per View matches often receive bonuses on top of their base salaries. This again can be a major income boost for wrestlers whose matches are in high demand. In especially high profile PPV matches, this bonus can be as much as six figures.

Perks
The WWE also covers 100% of the costs of all in-ring injuries sustained by its wrestlers.

So in short, WWE wrestlers can expect to make at least $100,000 in any given year, with most receiving more once PPV bonuses, licensing deals, and other perks are taken into account. There is, however, a very significant gap in pay between top and average wrestlers. Most average wrestlers draw salaries very close to $100,000. Top wrestlers take in as much as $2,000,000.

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Tips to budget successfully

Finance

This is a guest post written by Andreas Nicolaides, a financial author for UK based MoneySupermarket.com.

Whether your aim is to save money for a special occasion or you just want to make sure you don’t have to struggle financially when it comes to the end of the month, a budget can be a saving grace. Budgets help us quickly and easily identify our total income and all our expenditure, allowing us to plan for the best and prepare for the worst financial situations.

Set yourself a target

 

If you have decided to set up a budget, then there must be a reason. Are you looking to save for an upcoming event? Or maybe you have realised that you are struggling to make your payments every month and you would like to feel more financially secure. Based on what you would like to get out of your budget, you should set yourself a specific, measurable objective.

My first objective I set for myself was to save $100 every month for a year. This sort of objective is easy to manage and easy to monitor and this is what we are trying to achieve. One important thing I would mention here is to ensure your objective is achievable; don’t set yourself a target that is too far out of your reach, being realistic is extremely important.

How do you set up your budget?

The main key thing when you start to put your budget together is to make sure you’re as honest as possible. Get yourself a pen and some paper and on one page detail all of your income. Include the obvious and also remember to include any benefits you are entitled too. Then grab another piece of paper and detail all of your monthly outgoings, remember to be honest and thorough and try not to forget anything. Once you have both figures, deduct your expenditure from your monthly income that will give you your monthly figure.

You have some extra cash?

 

If when you have your figure you realise that there is some cash left over, you can then decide what you want to do with it. My advice here depends on your own personal circumstances, for example if you have high levels of debt, your main aim should be tackle your high interest debt aggressively and as often as possible.

If you have some money left over and your aim is to save, then set up an interest bearing bank account. If you are based in the US then you could look to set up an LSA or lifetime savers account. In the UK we have the equivalent, that is called a cash ISA saving account.

No money left over?

 

If after working out your budget you find you have no money left over, then you need to do something about it. Debt is one of those things that won’t just disappear overnight; it’s something that takes time and commitment, but not giving up is paramount.

How to cut down your expenditures?

 

One of the main things you can do when you realise you are in a bad situation is to try and cut down on your expenditure. Here’s a couple of quick ways:

  • Use price comparison sites – These sites are great to check and see if you are paying too much on your bills, and if you are, you will have a list of fantastic options available for you to choose from. This is a great way of saving money on things like your car insurance, see here.
  • Sell unwanted items – Selling unwanted items is a quick way to making some cash, everyone has them around their home, so why not make use of them instead of letting them build up dust?
  • Cut down on your spending – Try to avoid buying luxuries and try to stick to a specific shopping list when out doing the weekly food shop, this will help you avoid unnecessary purchases

A budget is used by many just to monitor what they spend month to month, but I hope I have detailed how it can be a helpful financial tool that can help you reach your financial goals. I hope my tips to budget successfully will help you get started on your way to financial freedom.