Let’s explore some key steps toward investing with little money: how to know you’re ready to start investing, the different types of accounts you can get, good investments for long-term growth, investing mistakes to avoid, and more!

Over time, as your income grows, you can expand on these strategies and dedicate more funds to your investing goals. Getting an early start will build your resources and also build the knowledge that you will need to invest profitably later on!

1. Build a Good Financial Foundation

Before you start thinking about investing, you should prepare by accomplishing a few other financial steps first. It can be a mistake to start investing before you’re ready, especially if your budget is stretched thin.

Save an Adequate Emergency Fund

Whether it’s a broken-down car, a health scare, or an unexpected layoff, emergencies can happen at any time. Work on saving 3-6 months’ worth of expenses in an easily accessible savings account before you invest in the market. This way, you won’t have to worry about selling off your precious stocks to pay the bills.

Pay Off Any High-Interest Debt

If you’re carrying any high-interest debt (e.g. credit cards or personal loans), pay that off first. Otherwise, you’ll just be hemorrhaging money in compounding interest payments and they’ll drown out any gains you make in the market! If you only have low-interest debt (e.g. student loans, mortgage payments), it’s fine to start investing as long as it doesn’t throw off your repayment plan.

Learn about some of the best strategies to get out of debt: How to Get Out of Debt in 5 Steps

2. Outline Your Investment Goals

Is there a specific reason you want to invest? This will help determine what type of investing is best for you right now. 

For instance:

• Do you want to start saving for retirement?
• Do you want to earn your company’s 401(k) match?
• Do you have shorter-term savings/investment goals (e.g. a house down payment in 10 years)?
• Do you want to learn about the stock market or have everything automated for you?

Your answers to these questions will help you with the rest of the steps on the list!

3. Pick a Type of Investment Account

As you prepare to start investing, there are a few main types of accounts you can choose from. Let’s go over your options! 

401(k) or 403(b)

These are both types of employer-sponsored retirement accounts. If your job offers one with an employer match, this is one of the best ways to start investing with little money. A 401(k) match is an extra employment benefit that rewards you for investing. For instance, if your employer matches 100% of your contributions up to 3% of your salary, this instantly doubles any money you invest up to that limit. However, you can’t withdraw money from a traditional 401(k) before age 59 without a steep penalty.

IRA

This stands for “Individual Retirement Account,” and it’s separate from an employer so you’ll manage it yourself. You can open a traditional (pre-tax) IRA, or a Roth (post-tax) IRA. Roth IRAs may be best when you’re investing with little money because your current income tax rate might be on the lower side and you can withdraw contributions penalty-free if you need to. An IRA is a great starting option if your employer doesn’t offer a 401(k) or have a match benefit.

Learn more about tax-advantaged retirement accounts, including all the sub-types of 401(k)s and IRAs and the differences between Roth and traditional retirement accounts.

If you’re opening an IRA, you can choose from all the popular brokerages like Fidelity, Vanguard, Charles Schwab, and others. If you’re opening an employer-sponsored account, this choice will already be made for you!

Taxable brokerage account

If you have short-term investing goals, you might want to open a taxable account instead of a retirement account. Unlike retirement accounts, these accounts don’t have any rules about how old you have to be to make withdrawals. However, they have no tax advantages. You’ll have to pay capital gains taxes on any profits you make. 

4. Study Your Investment Options

No matter what account type you choose, your next step will be choosing which investments to buy within the account. Think of your account as the vehicle and your investments as the passengers. 

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You’ll be able to choose from a variety of asset types, including:

• Stocks (also called equities)
• Bonds
• REITs (shares of real estate investment trusts)
• Mutual funds & index funds
• ETFs (exchange-traded funds)

Each of these has advantages and disadvantages.

Choosing a mix of index funds and ETFs is the easiest and safest way to start investing.

Funds are large collections of stocks, so when you buy a share of an index fund or ETF, you’re effectively buying tiny pieces of all the stocks inside. That means even when you’re investing with little money, you can build a well-diversified portfolio with broad exposure to the stock market. For instance, you could buy a technology ETF that includes pieces of all the big tech companies. Or, you could even buy a total-market index fund that tracks the entire U.S. stock market.

Investing in individual stocks is much riskier. An individual company can go bankrupt and cause your stock to go to zero, whereas an index fund protects you from individual company failures since it includes a diversified mix of many companies.

Personally, I like to do a mix. I invest most of my retirement account into index funds, but I also have a “fun” account where I choose individual stocks. Even though it’s riskier, it can be a good, hands-on way to learn about the markets and get a sense of which sectors of the economy are thriving or poised for growth. Check out this article for some more ideas about how to invest in 2021.

If you’d prefer to just set it and forget it when it comes to investing, a robo-advisor account might be a good fit for you. Robo-advisors automatically manage your accounts, investing in collections of stocks and funds based on your goals and risk tolerance (which they’ll assess when you set up the account). 

5. Watch Out for Scams and Hype Stocks 

Hoping to use stocks to get rich quick? I’m sorry I have to temper your expectations. If someone promises you that you can strike it rich in no time by investing with little money, they’re probably trying to sell you something or shilling a stock that they own. Always do your own research on investments and be wary of investment scam red flags. Watch out for financial services MLMs trying to recruit or sell to you as well.

Picking stocks shouldn’t feel like going to the casino. Gamble your whole account on “the next hot stock that’s guaranteed to 10x this week” and you’ll probably end up losing money—and getting stressed out in the process. There are too many stories of people putting their life savings into risky stocks and going broke. If it sounds too good to be true it’s probably not true.

Here’s an eye-opening statistic: even 90% of investment professionals can’t beat the market. We’re all statistically unlikely to be part of the 10% who can outperform an index fund!

6. Think Long-Term

Instead of trying to chase instant wealth, think of investing as a long-term process. Slow and steady really does win this race. The average annual return of the S&P 500 Index is around 10% per year from the 1920s-2019. If the market delivers similar returns in the future, this means each dollar you invest today could double in 10 years, quadruple in 20, octuple in 30, and so on. 

Everything we know about the history of investing indicates that the key to success is simply to consistently invest however much money you can afford into well-diversified funds, then stay the course through the ups and downs of the market. It might not make you a millionaire overnight, but with hard work and a little patience, you’ll get there! 

The post How to Start Investing With Little Money in 6 Easy Steps appeared first on FinMasters.

When you’re deciding whether to open a 401(k) vs. IRA, it’s helpful to know what these accounts are, how they’re similar and different, and how each of them can help you achieve your retirement goals. (Pro tip: it might make sense to have both!)

401(k) vs. IRA: The Similarities

First, let’s go over the similarities between these two popular retirement accounts. 

Investment Account Types

One common misconception for new investors is that simply having a 401(k) or IRA automatically means that you’re investing in the stock market. However, 401(k)s and IRAs aren’t investments themselves: they’re just accounts where you can hold investments.

You can think of them as the wallet, not the cash.

Once you open a 401(k) or IRA, you’ll need to decide what kinds of investments to purchase inside your account. If you skip the asset allocation step, your money might just be sitting in cash inside the account. It wouldn’t be growing at all! Later, I’ll touch more on the different kinds of investment choices you may have in a 401(k) vs. IRA.

Retirement Tax Advantages

401(k)s and IRAs are both types of tax-advantaged retirement accounts. 

With a regular taxable investment account, you invest money you’ve already paid income taxes on. Every transaction you make is a taxable event, so you’re getting taxed on both sides (contribution and sale/withdrawal).

In a tax-advantaged retirement account, you’ll only be taxed on one side. If you choose a traditional pre-tax 401(k) or IRA, you’ll make tax-deductible contributions. You’re funding the account with money that the government won’t tax that year. You’ll only pay taxes when you withdraw the funds in retirement. 

There’s also the option to choose a Roth, or post-tax, version of a 401(k) or IRA. This works the opposite way: you’ll pay regular income taxes on your money the year you contribute it. You won’t be taxed when you withdraw it in retirement.

Learn more about the difference between traditional and Roth accounts.

Restrictions on Withdrawals

Because 401(k)s and IRAs are meant to encourage retirement saving, neither of them makes it easy to just get that money out whenever you want it. You’ll face taxes and penalties if you try to withdraw funds before age 59 ½, unless you qualify for an exception. 

A Roth IRA is unique in that you can always withdraw your contributions without penalty; you just can’t withdraw any profits you’ve made. For instance, if you’ve contributed $50,000 to a Roth IRA and it’s grown to be worth $75,000, you can withdraw the $50k of contributions but not the $25k of profits.

401(k) vs. IRA: The Differences

When you’re trying to decide on opening a 401(k) vs. IRA, the differences are more important than the similarities, so let’s dive in! 

Account Management & Eligibility

The biggest difference between a 401(k) vs. IRA is who manages the accounts and who is eligible to get them.

A 401(k) is an employer-sponsored retirement account, so you can only get one if your employer offers one and you meet their employee participation standards (e.g. you may have to work at the company for a certain amount of time before becoming eligible). The company chooses the 401(k) provider and sets up the plan.

An IRA is an account you open and manage as an individual. Anyone who is under the age of 70 ½ and is earning taxable income can open and contribute to an IRA. That means you can invest in an IRA even if you’re self-employed or have a side gig; your account isn’t tied to a company you’re working for. You can open your own IRA at many popular brokerages, including Fidelity, Vanguard, Wealthfront, and others.

Contribution Limits

Both accounts limit how much you can contribute in a year, but the limits for a 401(k) are much higher. They also both allow for catch-up contributions after age 50. 

As you can see, if you want to invest more than $6-7,000 a year for retirement, an IRA alone wouldn’t be enough.

Investment Selections & Fees

Because 401(k) plans are arranged by your company, you don’t have much control over what investment products will be available to you, or what fees they’ll charge.

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The average 401(k) plan offers 8-12 investment choices^[1], which are usually some combination of mutual funds. They might have a large-cap stock fund, a small-cap stock fund, a bond fund, a target-date fund, and so on, with a mix of riskier or more conservative investments. 

An IRA gives you a much broader range of choices. Within an IRA, you can purchase almost any type of investment, including:

• Index funds & mutual funds
• ETFs
• Individual stocks
• REITs (real estate investments)
• Bonds
• Annuities

In short, an IRA gives you a lot more freedom to choose your investments, while a 401(k) locks you into whatever packages your company picks.

If your employer’s 401(k) offerings have high fees or don’t meet your investment objectives, you might want to stick to an IRA or open an IRA to supplement your 401(k).

401(k) Employer Matching

Depending on your employer, matching can be an incredibly significant benefit of a 401(k). Essentially, your company will add extra money to your 401(k), up to a certain percentage of your salary and contributions. 

Some companies don’t offer a match, but for the ones that do, it’s an extra incentive to contribute to the plan and stay at the company. That’s because matches can be subject to different vesting schedules, which means if you leave the job before your matches have fully “vested,” you’ll only get to keep your own account balance and possibly a certain percentage of the match. 

As long as you stay at the company long enough for the match to vest, it’s free money that you definitely don’t want to pass up!

How to Start Investing in a 401(k) and/or IRA

Now that we’ve reviewed the similarities and differences of a 401(k) vs. IRA, it’s time for action. Where should you start in order to maximize the advantages of these accounts?

Here are the steps I recommend:

1. Review your employer’s 401(k) options, if applicable. The biggest things to look for are (A) what funds are available for investing inside the plan and (B) what the expense ratio is for each fund since you’ll want to avoid ones with high expense ratios. If you don’t have an employer who offers a 401(k) or their options don’t work for you, skip straight to opening an IRA.
   
2. If your employer offers a 401(k) match, start by contributing just enough to get the match. Like we talked about above, if they match 50% of a 6% contribution, you should set your 401(k) contribution at 6% to get the full match. As long as the expense ratios aren’t higher than the match percentage, this is free money. Talk to your HR department if you have questions about setting up your 401(k).
   
3. When you’re contributing enough for the match and still want to invest more, open an IRA next. You can easily do this online with a brokerage of your choice. Max out your IRA if you’re able to. If your employer doesn’t offer a 401(k) match, funding an IRA should be your step 1. If your 401(k) is traditional, consider opening a Roth IRA to go with it, to maximize the advantages of both types.
   
4. Once you’ve maxed out your IRA or have gotten on track to do so, you can revisit and increase your 401(k) contributions if you still have more money you’d like to invest. Contribute as much as you feel comfortable. 

5. If you have any income from self-employment, you can also explore other account alternatives like a solo 401(k) and SEP-IRA.

The absolute best-case scenario is to be able to max out your IRA and your 401(k), but don’t feel bad if that just isn’t possible. Only 13% of 401(k) participants in a 2018 Vanguard survey were maxing out their contributions, and many of those people were older and later in their careers^[2]. The most important thing is just to do what you can. It’s your financial journey and you don’t need to compare it to anyone else’s. Focus on your goals and look forward to the future!

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Don’t worry. For most people who are filing taxes for the first time the process should be relatively simple. You’ll probably only have a few documents to worry about and you might even be able to file for free with software that walks you through the process. Let’s dive into what you need to know when filing taxes for the first time!

In this post:

• Who Has to File Taxes?
• Common Sources of Taxable Income & Tax Forms
• How to File Taxes
• Different Methods of Filing Taxes

Who Has to File Taxes?

First things first: do you even have to file? Or are you going to bookmark this article and check back next year?

You can use the IRS’s “Do I Need to File?” quiz to get a specific answer based on your situation. In general, you don’t have to file if you earned less than the amount of your standard deduction. That amount changes based on your age (under vs. over 65), filing status (single/joint/etc.), and the year.

As an example, the 2020 standard deduction for a single filer under 65 is $12,400, so you may not have to file if you made less than that.

However, this rule changes if you have special circumstances requiring you to file. For instance, if you have a business or are self-employed, you’re required to file if your net self-employment income was at least $400.

So the short answer is, you usually have to file if you made more than your standard deduction amount from any source, or more than $400 from self-employed work.

Common Sources of Taxable Income & Tax Forms

If you’re a first-time tax filer, chances are you don’t have a billion different sources of income yet. That’s good; it keeps things simple! You can view the IRS’s full list of income types here, but for now, we’re just going to hit the most common ones. 

Wages and Salaries 

If you’re a traditional employee who receives a paycheck from an employer, that income counts as wages or salaries. Your employer will withhold a portion of your paycheck for taxes throughout the year and will issue you a W-2 form at tax time. 

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Business/Self-Employment Income 

Do you do any kind of work for yourself or as a side hustle? This could include freelancing for clients online, running a summer business mowing lawns around your neighborhood, delivering food or groceries through an app, etc. This is self-employment or business income. You’ll report this income on a Schedule C form along with your Form 1040.

If you did over $600 of work for one client, they’re responsible for issuing you a 1099 form. If you did under $600 of work per client or don’t receive a form, you’re responsible for tracking and reporting this as miscellaneous income.

One account for everything business. If you are self-employed or run a small business, Bonsai can let you know when the taxes are due and how much taxes to pay. Learn more →

Interest Income 

Did you save some of your money in a bank account that pays interest? Awesome; you’re building your net worth and making free money! But this qualifies as income too. If you made more than $10 in interest, your bank will send you a 1099-INT form.

Investment-Related Income 

If you’re dabbling in the stock market, you might have made money in a few different ways. Dividend income will be shown on a 1099-DIV form, which you’ll get from your broker. If you bought a share and sold it at a profit, the profit will be subject to capital gains tax; your brokerage will send you this information on a 1099-B form. 

For instance: If you bought a stock for $5 and sold it for $15, you’ll be taxed on the $10 you gained.

Note that stock-related taxes only apply if you’re trading in a taxable account. You don’t have to worry about reporting dividends received or trades made within tax-sheltered accounts like an IRA or 401k.

How to File Taxes

Now that you know what kinds of income you might be earning and what forms you might expect, let’s look at the steps to filing your own taxes for the first time.

1. Understand Your Sources of Income

In order to know what to expect, you’ll want to keep records of any finance-related activities you’re doing throughout the year. Were you an employee at multiple companies? Expect multiple W-2s. Do you have multiple bank accounts? You’ll probably get an interest form from each one. Are you a freelancer working for a variety of clients? Keep records of your income from all of them.

If you’re being paid through PayPal, TransferWise, or similar services, you can usually download a transaction record that will include your work payments.

2. Know Your Dependent Status

If you’re filing taxes for the first time because you’ve recently become an adult, you may be used to your parents handling everything and claiming you as a dependent. 

Before you file taxes on your own, check in with your parents to make sure they don’t plan to claim you as a dependent this year. Your social security number cannot be used twice, so if they claim you, it will cause problems when you try to file. (Or, if you file first, it’ll cause problems when they try to claim you.) 

Review the IRS’s rules for qualifying dependents to figure out whether you could be considered a dependent or have any dependents yourself (e.g. if you’re a new parent or you support an elderly relative).

3. Gather the Necessary Documents 

Most tax forms come by mail throughout the month of January. Pick a designated place (e.g. a desk drawer) to set aside any forms you receive, so you don’t have to hunt through stacks of mail when you’re ready to file. 

You’ll probably have some combination of W-2s and 1099s. There might be some other forms in there too, depending on your situation—for instance, you might get a form to deduct student loan interest, tuition expenses, or mortgage interest. If you aren’t sure what a form is, check the IRS website for guidance.

You also need basic identifying information like the social security or tax ID numbers of everyone included on your tax return.

4. Review Your Deduction and Tax Credit Options

All filers can choose whether to take the standard deduction (a set amount of $12,400/person in 2021) or to itemize deductions. Itemizing is a lot more work, as it means you need to list out all your qualifying tax-deductible expenses like certain medical and dental costs, charitable contributions, or state and local taxes. 

As a first-time filer, you’ll probably be better off choosing the standard deduction. If you didn’t spend more than $12,400 on qualifying expenses like the ones above, it isn’t worth it to itemize.

Even if you take the standard deduction, there are some “above-the-line” deductions you can take to reduce your tax bill. These include traditional retirement plan contributions, health insurance premiums, contributions to a Health Savings Account, and more.

You can also review the IRS’s list of tax credits here, which are even more powerful than deductions if you’re eligible for any.

5. Consider Business Expenses

If you had any business or self-employment income, you can deduct any relevant business expenses from your business income. For instance, if you bought a lawnmower to run that summer lawn-mowing business, that’s a business expense. Or if you freelance using the internet, you can claim a portion of your internet costs as a business expense.

6. Plug In Your Numbers

All that’s really left to do is take the information from your forms and records and transfer it all to the Form 1040 that you’ll ultimately submit to the IRS. Next, we’ll quickly cover some different methods of accomplishing this! 

Different Methods of Filing Taxes

Time to talk logistics: what method will you choose to file your taxes for the first time?

Filing Taxes Online or With Software

Using a tax website or software to file your taxes is undoubtedly the easiest way to get it done. Usually, these programs will prompt you with easy-to-understand questions that guide you through the process. The software might ask “Did you receive a W-2 form?” If you did, all you have to do is type in the information on the W-2. They’re designed to be intuitive, making them perfect for first-time tax filers.

If you earned under $72,000 in 2020, you’re eligible to use the IRS Free File Program to file your taxes online through an IRS partner website for free. 

If you earned over $72,000, you’ll need to pay to use tax software. Popular options include TurboTax, H&R Block, TaxAct, and others.

Doing Your Taxes on Paper

Want to try your hand at doing it the old-school way? In my opinion, paper taxes are taxes on “hard mode”, but it’s still a valid option. 

There are a couple different ways to get paper tax forms:

1. Download Form 1040 and any relevant schedules from IRS.gov and print them
2. See if your local library or post office offers free paper tax forms.

IRS.gov also has a Forms & Instructions page where you can access detailed instructions about how to fill out your tax forms.

Using Professional Assistance

If the idea of taxes is still making you sweat, there’s no shame in calling in the pros. You can use the service of a qualified tax preparer to file your return. You’ll provide them with all your relevant documents and details, then let them take care of filling in forms and looking for deductions. However, these services cost money, so unless your taxes are quite complex I’d encourage taking a crack at it yourself first! It’s always a good idea to understand what’s going on with your finances, and most first-time filers will be facing relatively simple situations.

Once you’ve filed your taxes a few times, you’ll be breezing through 1040s in your sleep. Well, okay, you probably don’t want to dream about taxes. Totally fair… but also a good reason to get them off your mind! File now and you won’t have to worry about taxes until next year.

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How Can You Get Paid to Lose Weight?

Getting paid to lose weight is possible, but it deserves caution and due diligence. Like with any money challenge or purchase, don’t wager more than you could afford to lose.

The most certain way to be paid to lose weight is probably to make a bet with a friend or family member. For example, decide that the first to lose 10 pounds or 5% of body weight owes the other $50. Or you can look for clinical research trials in your area that pay you for diet studies or to test weight loss programs, although these are few and far between.

If you don’t know anyone who’s up for making a personal bet with you, you can turn to the internet to find an app or program that offers rewards for losing weight.

Apps that Pay You to Lose Weight

Let’s look at some weight loss reward programs and how they work. We’re not recommending any specific platform. Be sure to read the Pros and Cons section before deciding to place a bet.

There are many cons to these apps that you can read about below, so be careful before you wager any money on them.

1. HealthyWage

Average app store rating: 4.8 (Apple) / 4.6 (Google Play)

BBB rating: Not accredited; A+

HealthyWage is by far the most popular weight loss reward program. You place a wager on yourself to lose a certain amount of weight by a certain time. You must bet to lose at least 10% of your total weight, so it’s not an option if you’re just looking to lose a few pounds.

Your prize is calculated with an algorithm that factors in your weight loss goal, BMI, bet amount, time of year (summer is statistically the best season for weight loss), etc. The more money you bet and the more weight you have to lose, the higher your prize will probably be (it caps at $10,000, but most are much less than that). You can play with the prize calculator on the HealthyWager Page to get a specific number based on your info.

For your first and final weigh-ins, you’ll submit a verified video showing your full body and the scale display. See full video rules here.

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Is HealthyWage legit? In short—yes. It is a trusted program that does what it promises to do for most people. On the flip side, one of those promises is no refunds. If you sign up for a wager, you should be confident and disciplined about your approach. If you don’t lose the weight, you lose your money.

Learn more about how everything works in the HealthyWage FAQ.

2. DietBet

Average app store rating: 4.8 (Apple) / 4.8 (Google Play)

BBB rating: Not accredited; A

DietBet is a weight loss betting program similar to HealthyWage, with its own unique spin. Instead of betting alone, you join a DietBet “game” with other participants. Anyone within your challenge group who meets their weight loss goal splits the prize money minus a fee. It turns weight loss into a social activity. You can interact with and support the other members of your team.

You can sign up for two types of challenges: either committing to lose 4% of your body weight in four weeks or 10% in six months. DietBet prizes are based on the number of participants and how many of them succeed, so it’s impossible to predict your exact winnings. Furthermore, since DietBet takes a 10-25% fee out of the total prize pot, you could win and not get a prize at all. Winners will at least have their initial bets returned.

This isn’t to say you can’t make money. One DietBet participant calculated their average rate of return for 10 bets: they ranged between an average of 0.4% to 59.1%, with a final average of 16.6%.

Find more details about the program in the DietBet knowledge base.

3. StepBet

Average app store rating: 4.8 (Apple) / 4.6 (Google Play)

BBB rating: Not accredited; B+ for parent company

StepBet belongs to the same parent company as DietBet, and it works in about the same way. You contribute to a communal pot, work towards a step goal, and split with other winners. It’s not officially a weight loss app: the wagers involve fitness goals, not weight loss goals. Walking more translates to burning more calories, though, so it can certainly help you meet your weight and health goals.

StepBet could be a better option if you prefer programs with defined challenges like “walk X steps” instead of a weight loss target which requires balancing numerous more nebulous factors.

Learn more in the StepBet FAQ.

4. stickK

Average app store rating: 2.5 (Apple) / 2.9 (Google Play)

BBB rating: Not accredited; C-

StickK is far from the most popular app on this list. It doesn’t have many reviews on either app store, and there are complaints that it’s glitchy and feels like a beta version. It does have unique features, so it may be worth a try anyway.

Behavioral economists at Yale created the platform, using a variety of methods to raise the stakes and increase your chances of success. You can choose what happens to your money if you lose it. It could go to someone you know, a charity you like, or (perhaps most interestingly) an “anti-charity” with a cause you hate, so you really won’t want to lose your bet. You can also invite people to monitor your progress and provide accountability.

Learn more in the stickK help center.

5. Evidation

Average app store rating: 4.6 (Apple) / 3.7 (Google Play)

BBB rating: Not accredited; A+

Evidation differs from the apps above in a couple of key ways. It’s not a betting-style app at all. It rewards you for healthy habits measured through fitness trackers and surveys. Medical researchers can use your information, though it will be anonymous. Once you’ve synced the relevant tracking mechanisms, it begins working automatically.

This isn’t an app that will make you rich. You can cash out $10 for every 10,000 points. Bigger activity goals (e.g. 30,000 steps per day) earn you 80 points per day. Smaller activities (e.g. logging food, weighing yourself) net you 6 points each. Doing surveys, referring friends, and reading health articles are a few other ways to earn. If you’re lucky, you’ll earn enough to splurge on organic carrots at the grocery store.

Evidation is a good app for earning you a little low-effort cash on the side while you track your health and weight progress, and it doesn’t require you to put any of your own money on the line to earn the rewards.

Learn more about Evidation here.

Pros & Cons of Weight-Loss Betting

Let’s see how the idea of getting paid to lose weight really measures up.

Pros:

1. The motivation factor — Almost nobody has the limitless internal motivation, so sometimes, we need external incentives and accountability to keep us on track. The reward of extra money if we achieve a goal, combined with the threat of losing our own hard-earned dollars if we fail, can be a powerful driving force to stay committed. According to one small study, weight loss success rates are higher when there’s a financial incentive^[1].
   
2. The social element — Humans are social animals, and we often find it easier to achieve our goals when we’re working towards them with others. Some weight loss reward platforms have built-in communities or ways to involve your existing social connections with your journey.
   
3. The potential to earn money — People can and do win money with weight loss betting. Depending on the factors involved, your prize could amount to hundreds or even thousands of dollars. Just keep in mind that to win higher prizes, you have to risk higher amounts of money.

Cons:

1. No refunds — Have your life circumstances changed? Did you realize you don’t need to lose as much weight as you thought? It doesn’t matter: once you’ve made the bet, your money is on the line, and you cannot back out.
   
2. Limited earnings — Programs like HealthyWage can be a little misleading when they advertise past participants’ winning amounts or estimate your rewards. Why? Because they typically include the amount of your bet in their final figure. For instance, if you want to lose 30 pounds and you bet $50 a month for 6 months, you might see a prize range of $325-$750, depending on your other information. However, these figures include the $300 you’re paying to participate. That drops the actual profits to $25-$450. Before you commit to a wager, calculate how much you’ll actually profit vs. how much you could lose.
   
3. You pay taxes on winnings — If you win your bet, Uncle Sam will want in on the action too. Expect a 1099 if your winnings exceed $600, and ask your tax advisor how to handle it if they’re under that threshold. You’ll only pay taxes on the amount you actually won (not on your wagered amount), but this could shave another 25% off your profit.
   
4. There are negative reviews — For every success story, there’s a complaint on the other side. Don’t get distracted by the smiling photos and slimmed-down pictures on the program websites; dig into the other side to build a full picture. Browse through Better Business Bureau complaints for each platform you’re considering. Consult groups like r/HealthyWage and r/LoseIt to read experiences and ask for advice. Read recent app store reviews to see if anyone is reporting usage or payment issues. Keep in mind that some reviewers may just be angry about losing, but others may have valid critiques and frustrations.
   
5. Many people lose — If the majority of people won their bets, it wouldn’t make sense for weight loss contest sites to stay in business. Unfortunately, there aren’t comprehensive studies measuring success and failure rates of weight loss contests in general, but HealthyWage founder David Roddenberry said in 2016 that about 30-40% of participants win their bets^[2]. stickK reports higher rates of around 75% when users make a monetary wager^[3]; however, their data encompasses non-weight-related goals like quitting smoking, meeting financial goals, improving workplace performance, etc. The takeaway is that failure is possible. You could bet hundreds of dollars, then still find that the weight just isn’t coming off as fast as you need.

The post How to Get Paid to Lose Weight and Should You Try It? appeared first on FinMasters.

Planning ahead for your own death expenses can sound a little morbid or even intimidating. You have to save for all your regular life expenses, emergencies, and retirement—and now you even need to budget for your funeral costs? Or perhaps you’re facing the sad responsibility of planning a funeral for a loved one, and you aren’t sure where to start in the midst of your grief.

It’s a topic that many people don’t want to dwell on too heavily, but knowing your options can give you and your family peace of mind about the future. The costs of funerals, burials, and memorial events can vary wildly depending on your preferences and choices, so let’s dive in.

Traditional Funeral Costs

Average funeral service, burial, and cemetery cost: $10,000-$20,000

Most Americans hear “funeral” and think of a certain traditional experience. There’s a viewing at a funeral home with an open or closed casket. There’s a ceremony with speeches, a graveside interment, and a reception with food and drinks. This is an involved process that obviously comes with significant costs.

The basics include transportation, embalming, caskets, funeral services, and cemetery plots. Some cemeteries also require a special vault rather than just a casket, which can cost up to $2,500 more. Then there are headstones, flowers, and other optional extras that can be as simple or extravagant as you choose.

Let’s break it down and consider all the average individual expenses a traditional funeral and burial can involve:

• Cemetery plot: $1,500-$2,500
• Headstone/marker: $500-$4,000
• Casket: $2,400 (fancier options can be up to $10,000+)
• Grave liner or vault: $500-$2500
• Embalming + preparation: $1,000
• Funeral home services and facilities: $3,000
• Hearse + transportation: $650+
• Funeral flowers: $100-$700
• Printed memorial materials: $150-$175

You can save on most of these options by choosing the options on the simpler/cheaper end of each spectrum.

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Cremation Costs

Average: $1,000-$3,000 (cremation only)

“Ashes to Ashes” has a certain poetry to it. Cremation means your remains can be scattered in a beautiful place that’s meaningful to you. It’s also much cheaper than cemetery burial, although the costs will increase if a funeral ceremony is added. If the family wants an urn to store the ashes ($75-$350), even the highest-end vessel is much cheaper than a casket and cemetery plot.

Mausoleum/Crypt Burial Costs

Average: $4,000-$100,000+ (for family crypt)

If you prefer a clean, dry space inside a building your family can visit, a mausoleum or crypt might be your preferred choice. Community mausoleums are on the cheaper end, with entombment per space starting at around $4,000. You can also share a crypt with other family members, dividing costs that can run into the tens to hundreds of thousands.

Green Burial Costs

Average: $1,000-$4,000

In recent years, green burials have been growing in popularity. Also called “natural burials,” they focus on simple, planet-friendly practices that return the body to nature. This translates to using biodegradable coffins or fabric shrouds with no embalming chemicals. Green burials don’t use steel vaults or ornamental marble headstones, and so on. All of these changes have the welcome side effect of making burials much cheaper.

To prepare for this, you’ll need to locate a green cemetery or natural burial preserve. In lieu of a headstone, think about your favorite flowers and plants as a way to mark your resting place.

One related up-and-coming option is “recomposting,” where bodies are turned into the soil in reusable containers rather than being permanently interred. This soil can then be used to plant trees or start flower gardens where new life can grow.

Donation to Science

Average: Free (but you must plan ahead)

Donating your body to science can be a wonderful (and typically free) option. When the study is concluded, many organizations will provide a free cremation and give your ashes to your family.

Specific eligibility requirements depend on your location and the individual organizations and programs you’re considering. If you want to register as both an organ donor and a whole-body donor, you’ll need to register separately with each organization. You’ll need to do paperwork and let your family know what steps to take. Donation is time-sensitive, so you’ll need to be prepared.

Memorial Ceremony/Celebration of Life Costs

A ceremony for family and friends is a separate consideration. The specifics of every memorial are deeply personal, so these costs are all up to those planning it. It could be a celebration that focuses on reminiscing over memories and sharing the loved one’s favorite meal. It could be a religious ceremony or an Irish wake where the alcohol flows freely. It’s a chance to throw a final event that reflects what you loved in life and let people say goodbye.

If you have a preference for your memorial ceremony, let your loved ones know in advance. Write down your wishes to be stored somewhere they can easily access.

County & State Funeral Assistance

What if a family can’t afford a funeral for their loved one, or the deceased didn’t have money set aside?

In this case, the family can typically sign a release with the coroner releasing the body for burial or cremation through the county or state. In the case of cremation, families can often collect the ashes for a small fee.

There are also nonprofits that can help with funeral expenses, or fundraising platforms where friends and loved ones can contribute toward the burial costs.

How to Plan Ahead and Save for Funeral Costs

Planning ahead for death expenses doesn’t have to be a whole separate job. If you have life insurance, find out whether it covers funeral expenses and if so, how much. If you don’t have life insurance but are shopping around for a policy, that could be one more thing on your checklist.

You may not plan to get life insurance. If that’s the case, you can simply tack on end-of-life expenses while planning the rest of your financial future. Be sure to consider end-of-life costs when you develop your retirement financing plan.

Keeping in mind all the options and costs you’ve read about above, use the tips below to start making your plan.

1. Determine your preferences and research the expenses. What kind of burial do you want? Do you want to have a couple of bottles of your favorite expensive whiskey for your friends to send you off? If your choice is a traditional burial, do you want a simple casket or brushed mahogany with more bells and whistles? Call funeral homes to compare their rates and get an idea of who you’d prefer to use.
    
2. Don’t prepay for funeral packages. Many funeral homes advertise prepaid plans as a way to take a burden off your loved ones. This usually isn’t wise. Any number of things can change between now and then, so you don’t want to be locked into one specific plan. The funeral home could go out of business, or you could move, etc.
   
3. Write down your burial and ceremony wishes in a special final arrangements document or letter. Legal experts advise not doing this in your will, which typically isn’t consulted immediately when loved ones are planning.
   
4. Have payment logistics figured out. If you have life insurance, will they pay out quickly enough or will your loved ones need to pay for a funeral out of pocket and wait for reimbursement? Either way, consider setting up a Payable On Death (POD) savings account that immediately transfers to a person of your choice, so they can access this money for funeral expenses. (Note that a POD recipient is not required to spend this money in a certain way when they gain ownership, so this should be a person you trust!)
   
5. Make a will to designate your beneficiaries and divide up your assets. Consult a simple checklist about what information to include in this.

If you’re planning ahead on behalf of a loved one who is at risk of death but may not be able to face this process themselves, try to have gentle conversations to glean the most important information. This could include information about their financial accounts, where they might like to be laid to rest, and any other wishes. If they don’t express any preferences, the funeral and memorial decisions will fall to you and other next of kin. Your loved one may also be willing to designate you as their Power of Attorney, giving you the ability to make legal, financial, and health care decisions for them. Making preparations before their death can help to lighten the burden once the day arrives.

Ultimately, instead of feeling like it’s morbid or frightening, many people find that planning ahead helps ease their minds about this final stage. Ignoring the reality of death won’t make it go away, but having the logistics prepared can take away stress, give your loved ones a smoother transition, and ensure you’ll be remembered the way you want to be.

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