6 ways you're probably leaving money on the table on a daily basis
1. Ignoring your 401(k) match
If your employer offers to match contributions to your 401(k), take them up on it. It's free money and the limit will typically be equal to a percentage of your salary, so there's a clear goal to aim for.
What to do: Check your 401(k) plan documents or reach out to the human resources team at your company to find out exactly how your employer match is calculated. Minimally, financial experts recommend contributing enough money to your 401(k) plan to qualify for your employer match before turning your attention to other tax-advantaged retirement accounts.
Just like your own contributions, you won't pay taxes on any employer contributions until you withdraw the money from the account at age 59-and-a-half or later.
2. Sitting on too much savings
If you have a goal to build wealth, it's possible to have too much savings.
It's important to keep enough cash in an easily accessible account to cover monthly expenses, tap for emergencies, and fund big purchases, but anything beyond that will have the greatest potential for growth when it's invested in the stock market. No savings account or sock drawer will help your money grow by an average of 8% a year.
What to do: Financial expert Ramit Sethi says the best and most reliable place to start investing is through your retirement accounts. If you consistently have extra cash leftover at the end of the month after paying your bills and funding your savings goals, consider increasing your retirement contributions.
"They're not sexy, they're not going to be in the news, but you don't want them there. You want your investments to be really simple," Sethi previously told Business Insider. "A target date fund is great, or a basket of index funds. That's how I would approach it."
3. Skipping the high-yield savings account
If your savings is still sitting in a regular savings or checking account earning less than 1% in interest, you're missing an opportunity to earn money while you sleep.
High-yield savings accounts are a great place to store money for emergencies and short-term goals, including money you're shoring up to invest. There's zero risk of loss, the money is easily accessible, and your balance grows with no effort.
What to do: Transfer your emergency fund and any goal-specific money into a high-yield savings account, or multiple. Choose an account earning at least 2% in interest and you'll have a shot at beating inflation to grow that money into even more.
Say you have $5,000 in a regular savings account earning the average 0.09% annual percentage yield (APY). With no additional contributions, you'll earn about $4 in interest in 12 months. If you put that $5,000 into a Wealthfront cash account, which currently earns an industry-leading APY of 2.32%, you'll boost your account by $117 in interest over the same time period.
4. Not using a rewards credit card
A good rewards credit card is a must-have in 2019. You can earn points, perks, and cash that can be worth up to hundreds of dollars per year.
What to do: Choose a rewards credit card that maximizes the purchases you're already making. If you spend a lot on groceries, consider the Blue Cash Preferred Card from American Express, a cash-back card that offers 6% back at US supermarkets up to $6,000 in combined annual purchases and 1% thereafter.
If you regularly book travel and dine out, consider the Chase Sapphire Preferred — there's an annual fee of $95, but the sign-up bonus alone is worth around $750 toward travel.
5. Overlooking employee benefits
Employee benefits are valuable, but too often overlooked. Most companies offer some benefits beyond health insurance and retirement plans, such as discounted gym memberships, reimbursement for your cell phone bill, or a stipend for public transportation.
What to do: Take 10 minutes to reach out to the human resources team at your company and fill out any necessary paperwork or online applications to claim your benefits. You may be surprised by what your employer is willing to pay for.
6. Not reviewing your tax withholding
April shouldn't be the only month you think about taxes. If you're a W-2 employee and change jobs, land a raise, get married, have a baby, or otherwise complicate your tax situation, it could be time to review and adjust your tax withholding.
The number of withholding allowances you claim indicates how much of each paycheck will be withheld by your employer to pay the IRS. If too much is withheld, you'll get a big refund. If too little is withheld, you'll get a tax bill.
You'll get the most mileage out of your dollar if you aim to break even — you want to avoid giving an interest-free loan to the government. Your paycheck will be bigger throughout the year, giving you more room to save and invest.
What to do: Gather your recent pay stubs and last year's tax return to use the IRS' tax withholding estimator. If the suggested number of withholding allowances is different than what's on your paystub, ask your human resources team for a request to change it.
Generally, the government recommends that a single person with no dependents and one job claim two allowances to get as close as possible to covering their tax liability.
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