TIME Workplace & Careers

Seattle Business Owner Will Pay $70,000 Minimum Wage to All Employees

CEO will take nearly $930,000 pay cut to help fund the raises

A Seattle-based company will pay a $70,000 minimum wage to all employees, regardless of their job title, after the CEO read a study that found pay hikes up to that threshold led to significant improvements in emotional well-being.

Dan Price, founder and CEO of Gravity Payments, a credit card payment processing firm, stunned his employees with the generous minimum wage plan, which will ratchet up salaries over the next three years, the New York Times reports.

Thirty of Gravity Payment’s 120 employees will see their salaries double over the next three years, while Price himself will take a pay cut from $1 million down to $70,000 a year, or minimum wage by his standards.

Read more at the New York Times.

MONEY Autos

3 Ways to Avoid Costly Rental Car Insurance

airport sign for car rental companies
Chris Rank—Bloomberg via Getty Images

When you rent a car, you will be asked if you want car rental insurance. You might already have it — but it may have gaps. Here's how to figure it out.

I’ve been rear-ended in a rental car by a hit-and-run driver. And on my last business trip, the rental agent almost foisted a car with a scratched-up bumper on me. (Thankfully, I remembered to inspect the vehicle before I left the lot and asked for a different one.) So I know firsthand the importance of making sure you have adequate coverage when you rent a car. Without it, you could face enormous bills and a damaged credit rating if you can’t pay them.

But I am also frugal, so there is often a tug-of-war going on in my head when I rent a car: do I pay for the rental car company’s coverage or not? Purchasing it can literally double the cost of a car rental. Sometimes the coverage is even more expensive than the daily rental rate.

Fortunately there are some good alternatives for those who want to be protected and save money.

1. Your Own Car Insurance

If you own a car, then you (hopefully) have car insurance, and this is probably your first line of defense. You want to make sure you are adequately covered in four areas:

Loss of use: If you wreck a rental car, the rental agency will charge for the days that car is unavailable to other customers. My own auto insurance does not provide this coverage, so I use a credit card that fills this gap. (More on that in a moment.)

Collision/Comprehensive: Collision coverage typically covers damage to the vehicle if you are involved in an accident, while comprehensive coverage often pays for damage to the car due to theft, vandalism, flood, fire etc. Remember, your current deductible will apply. (Using the right credit card to pay for the rental can be helpful, since it may cover your deductible.)

Liability: This generally covers damage to another vehicle(s) and/or medical bills to others injured in an accident you caused. If you have an umbrella policy, that coverage may provide additional protection.

Medical/ Personal Accident Coverage: Does your personal auto insurance offer coverage for medical bills sustained in an accident, and will that extend to a rental car? Do you have good medical insurance? (Note, consumers who are injured in an accident sometimes find their own medical insurer balks at paying those medical bills.)

2. Your Credit Card Coverage

Many credit cards offer rental car coverage. This insurance is usually secondary to your personal auto policy, and that the claim will first be filed with your own insurer. (A few credit cards automatically include primary coverage.) But it may cover deductibles or expenses that your personal auto insurance doesn’t, such as loss of use. However, you’ll need to be aware of exclusions, which may include rentals in some foreign countries, certain types of vehicles such as pickup trucks or full-sized vans, or travel on unpaved roads. Full-time students may also be excluded from coverage.

Like most third-party coverage, it typically covers expenses related to the rental car but not to other cars you damage or people or property you damage in an accident. For example, when I reviewed the coverage offered by the credit card I use most often, I noticed the following are not covered:

  • Damage to any vehicle other than the rental car;
  • Damage to any property other than the rental car, owner’s property, or items not permanently attached to the rental vehicle;
  • The injury of anyone or anything.

Perhaps the most important thing to keep in mind here is that you need to read the details about what is and isn’t covered before you get to the rental car counter.

If you’re thinking about getting a new credit card that provides rental car coverage, keep in mind that your credit score will be a factor in whether you’re approved. You can check your credit scores for free on Credit.com to see where you stand.

3. Private Third-Party Coverage

If you purchase travel insurance, you can often add rental car coverage for a small additional fee, says Damian Tysdal, publisher of TravelInsuranceReview.net. But, as with credit card coverage, it usually doesn’t cover everything. “It is really just for collision and loss of use,” he says. “It won’t cover a car you hit, or harm to others.”

You can also purchase coverage through a third party, even if you don’t buy travel insurance. For example, American Express cardholders can buy “Premium Rental Car Coverage” for most rentals for a flat fee of $19.95 or $24.95 per rental (not per day). It is primary coverage, and there is no deductible. It also provides additional coverage for accidental death and secondary coverage for medical expenses, and covers vehicles the basic automatic coverage doesn’t (such as luxury vehicles and SUVs).

Other third-party services such as Protect Your Bubble, offers rental car coverage for $7.99 per day and covers rental car damage and theft, and personal effects protection, with no deductible. However, like other third-party coverage, it doesn’t include additional liability coverage or personal accident insurance so you’ll want to make sure you are adequately covered there through your own insurance policy or find out whether that coverage is available through your rental agency.

“If you are looking for the best coverage, look to your personal auto insurance,” says Tysdal. If you don’t own a car or have minimal coverage on your vehicle, you may need to piece together the best coverage you can from the options available.

More from Credit.com

This article originally appeared on Credit.com.

MONEY Taxes

Is Your Tax Refund Too Big?

massive amount of cash in pocket
William Howell—iStock

Getting a big check from the IRS is exciting, but it might not be the best for your long-term financial health.

Taxpayers getting back money from the government this year have received an average refund of $2,893 so far, according to March 26 data from the Internal Revenue Service. That’s a nice bump up in cash flow, and a lot of people look forward to it as a chance to splurge, pay down debt or add to their savings.

But those people could have had that money all year, had they withheld less of their paycheck. Getting a big refund means you essentially gave the government an interest-free loan, when you could have put the money in a savings or retirement account to earn interest. You may see that money as a windfall, but you should really see it as the government making good on a year-long IOU.

There’s no right or wrong answer to how much of a refund you should aim to get, because it’s very much a matter of personal preference, and it can also be tricky to estimate. No matter how you choose to deal with your taxes, it’s worthwhile to regularly evaluate your withholdings. Here’s why.

Your Life Changes

About 82% of taxpayers receive refunds, but even if you’ve consistently gotten one, a significant life change may affect how much you receive or if you get one at all. Marriage, divorce, the birth or adoption of a child, or a drastic income change should trigger a review of how much you have withheld from your paycheck.

You Should Look for Patterns

Beyond re-evaluating your tax situation in the wake of a noteworthy life event, your tax-filing history will give you a good idea of when you should consider changing how much is withheld from your paycheck. It can be a difficult thing to estimate, because as much as you want may want to avoid owing the Internal Revenue Service in April, getting too much in return may not be the best for your long-term financial health.

“A good place to be is owing a little bit or getting a little bit back,” said Elliott Freirich, a certified public accountant in Chicago. But where exactly is that “good place”? “There’s no right answer. It’s a gray area, but I would tell people if they could kind of keep (their refund) under $1,000. … It’s not like it would go away and they would never have it if they reduce their withholding.”

Know Your Own Saving/Spending Habits

Some people feel that way — that they wouldn’t be disciplined enough to set aside the money they would otherwise get from a large refund.

“It’s sort of like forced savings,” said Jorie Johnson, a certified financial planner in New Jersey. She said she suggests her clients re-evaluate their withholding if their refund exceeds $5,000. “I encourage them to use half of their refund toward their IRA, if they haven’t already maxed it out, and the other half on themselves, as a reward — that’s assuming they don’t have any debt.”

Consider the big picture: Do you look forward to a large tax refund but struggle to meet your savings goals on a monthly basis? If you’re trying to work your way out of debt or regularly find yourself financing your lifestyle while also getting a large refund check every tax season, that’s a sign you need to revisit your withholding (you might need to re-evaluate your spending habits, too).

Remember that withholding is just an estimate of what you’ll owe, and it may take you a few years of consistent tax outcomes to confidently adjust that estimate to meet your tax needs without owing or receiving a large sum come tax time.

More from Credit.com

This article originally appeared on Credit.com.

TIME psychology

7 Ways Your Mind Messes With Your Money

Mmmmmoney: Get a grip; it's just paper
KAREN BLEIER; AFP/Getty Images Mmmmmoney: Get a grip; it's just paper

Jeffrey Kluger is Editor at Large for TIME.

A new book shows the many ways money makes you crazy

If your brain is like most brains, it’s got an awfully high opinion of itself—pretty darned sure it’s pretty darned good at a lot of things. That probably includes handling money. But on that score your brain is almost certainly lying to you. No matter how much you’re worth, no matter how deftly you think you play the market, your reasoning lobes go all to pieces when cash is on the line. That is one of many smart—and scary—points made by author and J.P. Morgan vice president Kabir Sehgal in his new book Coined: The Rich History of Money and How it Has Shaped Us. Here, in no particular order, are seven reasons you should never leave your brain alone with your wallet.

Inflation? What’s that? You’re way too smart to think that if your salary doubles but the price of everything you buy doubles too you’ve somehow come out ahead, right? Wrong. In one study, volunteers were given the opportunity to win money that they could use to buy gifts from a catalogue. In later rounds, the amount they could win went up by 50% but so did the cost of all of the catalogue items. Nonetheless, their prefrontal cortex registered greater arousal after the staged inflation—even when they were warned before the study began that the purchasing power of their money would not increase. The implication: If a corned beef sandwich and a Coke cost $15,000 you’d still be thrilled to be a billionaire.

Keep yer lousy money: Guess what! I’m going to give you $199. Nice, right? Oh, did I forget to mention that it comes out of $1,000 someone else gave me to divide up between us any way I see fit? In multiple studies, when it’s up to one subject to apportion a fixed amount and up to the other to accept it or neither one gets paid, more than half of recipients will reject anything less than 20% of the total. In other words, you’ll turn down a free $199 to deny me my undeserved $801. Your ego thanks you, your checking account doesn’t.

Losing feels worse than winning feels good: Here’s something the Vegas casinos don’t tell you: That high you get from winning $10,000 at the craps table will fade a lot faster than the what-was-I-thinking self-loathing that comes when you lose the same amount. To get people to wager $20 on a coin flip, researchers have found that they typically have to be given the chance to double their money; betting $20 to win, say, $35 just doesn’t cut it. That seems like good sense—but given the realistic shot you’ve got at winning, it’s also bad math.

Simply the best: You know that store that opened on your corner that sold nothing but artisanal beets—the one that you knew would go out of business within a month and that didn’t even last two weeks? The owner totally didn’t see that coming. That’s called the overconfidence bias. The hard fact is, about 80% of new businesses are floating upside down at the top of the aquarium within 18 to 24 months—but nearly all entrepreneurs are convinced they’re going to be in the elite 20%. We bring the same swagger to playing the market and speculating in real estate—and to dancing at a wedding after we’ve had enough drinks and are convinced we’ve got moves. Watch the video later and see how that works out.

The hunt beats the kill: Never mind cigarettes and alcohol, if there’s one substance the government should regulate it’s dopamine—the feel-good neurotransmitter that gives you a little reward pellet of happiness when your brain decides you’ve done something good. The problem is, your brain can be an idiot. There’s far more dopamine released in its nucleus acumbens region—the reward center—when you’re anticipating some kind of payoff than when you’ve actually achieved it. That means expanding your business is more fun than running it and investing in the market is more fun than consolidating your gains. Those are great strategies—but only until the very moment they’re not.

I think therefore I win: I have a perfect three-step plan for winning the Power Ball Lottery: 1) I buy a ticket. 2) About 175 million other people buy tickets. 3) They give me all the tickets they bought. OK, failing that, the odds are pretty good that I may not be the person on TV who gets handed that giant check. But I play anyway thanks to what’s known as the availability heuristic. I think about winning, I see commercials with people who have actually won, I fantasize about what I’ll do with the money when I do win—and pretty soon it seems crazy not to play. The more available thoughts of something unlikely are, the more realistic it seems that it may actually happen. This is the reason there should always be a 48-hour cooling off period after you leave baseball fantasy camp and before you’re allowed to sell your house and try out for the Yankees’ farm club.

Fifty shades of green: Perhaps the biggest reason we’re irrational about money is that we’ve come to fetishize not just the idea of wealth but the pieces of currency themselves. In one study, subjects counted out either actual bills or worthless pieces of paper of the same size, and then plunged their hands into 122ºF (50ºC) water. The ones who had handled real cash experienced less pain—effectively anesthetized by the Benjamins. Other studies have shown heightened brain activity when people witness money being destroyed, with the degree of neuronal excitement increasing in lockstep with the value of the currency. It’s money’s world; we’re just living in it.

TIME Ideas hosts the world's leading voices, providing commentary and expertise on the most compelling events in news, society, and culture. We welcome outside contributions. To submit a piece, email ideas@time.com.

TIME Aviation

Here’s How Much Spare Change the TSA Collected Last Year

People are leaving more and more coins behind at screening points

Harried travelers are increasingly leaving their nickels and dimes in the bins used during airport security screenings, which has led to a growing source of revenue for the Transportation Security Administration.

In the fiscal year 2014, the TSA collected almost $675,000 in loose change, according to the agency’s internal data, up from $638,000 in fiscal year 2013. The amount of money collected has been steadily increasing since 2010, even though Americans are increasingly reliant on digital payment methods rather than cash. Overall, the agency has collected about $3.5 million in loose change since 2008. The cash is used to fund TSA security operations.

Fliers at New York’s John F. Kennedy International Airport left the most change behind, $43,000. Los Angeles International Airport ranked second at $42,000 and San Francisco International Airport ranked third at $35,000.

MONEY Love and Money

How to Tell if Combining Finances with Your Partner is a Bad Idea

joint finances
iStock

Sometimes separate accounts make for happier couples

A joint bank account can be the ultimate form of financial intimacy.

So say Derek and Carrie Olson, co-authors of the new book, One Bed, One Bank Account. “Sharing a bank account gives couples another opportunity to connect with each other and build up their relationship,” says Derek. “The oneness that a couple will experience through combining bank accounts can’t be achieved any other way.”

That sounds great. But in my experience, it doesn’t work for everyone.

If one or both of you has money drama, co-mingling could backfire. A separate but equal approach to managing money in your marriage—at least until you each sort through your finances—may prove wiser.

A Case Study

Take newly married couple “Brian” and “Theresa” (who prefer to remain anonymous).

They knew just six months into dating that they wanted to spend the rest of their lives together. “We also realized we didn’t want to merge our finances,” says Brian, 33, a school principal. “We each had independent financial baggage, but we had systems in place to deal with that baggage.” Merging their accounts would only make things more complicated, they explained.

Brian was paying—and continues to pay—for a doctorate program out of his own pocket.

Meanwhile, 27-year-old Theresa, an engineer, has been focusing on paying off student loans. There’s about $65,000 remaining, she says. Her auto debt repayment system is a tad “convoluted,” she explains, with multiple checking accounts tied to various student loan balances.

“It’s complex because of the number of accounts I have and number of transactions I have to keep things moving smoothly,” she says.

How to Manage Money Separately Together

If you plan to split costs evenly, you’ll want to jot down your monthly expenses somewhere that’s accessible to the both of you. You can either both slap down cash or credit when shopping or eating out, or designate one person as the household “spender” and the other as the “payer backer.”

Brian and Theresa adhere to a “modified roommate system,” where they record all shared expenses from rent to dining out on a spreadsheet. Brian usually pays for everything throughout the month and Theresa reviews the itemized list, checks for any errors and cuts Brian a check or transfers money to his account to cover her portion.

“Our agreement is, unless one of us has expressed wanting to treat the other, we split it,” says Brian.

It helps that they each earn roughly the same amount of money; they can evenly afford all their joints costs.

They also communicate a lot. Brian and Theresa hold weekly business meetings to talk about everything from large expenses coming up to the groceries they’ll need to buy for the current week’s meals.

Communication is important in any relationship no matter how you choose to manage the money, but it can be extra important if there’s no bank joint account representing joint goals.

If you’re both going to manage money on your own, you’ll want to check in more frequently to make sure that your saving and spending is measuring up to the goals you want to afford—both big and small.

Now two years into marriage both Brian and Theresa are en route to completing their financial obligations by summertime: Brian will be done paying for his grad program and Theresa will be debt-free. And once they hit those milestones, when “life will be simpler,” they plan to start sharing accounts with the goal to invest in real estate together.

But for now, they’re happy going Dutch. The couple admits that the arrangement isn’t super romantic—“but it’s what’s good for us,” says Theresa.

Every day, MONEY contributing editor Farnoosh Torabi interviews entrepreneurs, authors and financial luminaries about their money philosophies, successes, failures and habits for her podcast, So Money—which is a “New and Noteworthy” podcast on iTunes.

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How do you know if it makes sense to itemize?

What if I need more time to file my taxes?

TIME Money

See the Most Beautifully Designed Currencies From Around the World

From Costa Rica to Nepal, here is a selection of the most stunning bank notes in circulation

TIME Money

Stanford Offers Free Tuition to More Students

Stanford And Berkeley Rank Among Top 3 Universities In The World
Justin Sullivan—Getty Images People walk through the Stanford University campus on May 22, 2014 in Stanford, California.

Students whose parents earn less than $125,000 a year get a free ride

Stanford University will offer a free ride to any student whose parents make less than $125,000 a year, University officials recently announced in an expansion of its financial aid program for the coming school year.

“Our highest priority is that Stanford remain affordable and accessible to the most talented students, regardless of their financial circumstances,”Stanford provost John Etchemendy said.

The simple rule-of-thumb was revised from the previous year’s benchmark, $100,000 in family income. Eligible students are expected to contribute $5,000 to tuition using part-time wages, though they will not have to borrow money to meet that goal.

Without financial aid, Stanford students pay upwards of $65,000 a year in tuition.

TIME politics

Exclusive: Read a 9-Year-Old’s Letter to Obama About Putting a Woman on U.S. Currency — and His Response

Image courtesy of Kim B., Sofia's mother Sofia, the girl who wrote to Obama asking him to put a woman on U.S. currency

"Why don’t women have coins or dollar bills with their faces on it?"

The little girl who asked Obama last year why there aren’t any women on U.S. bills has finally gotten a letter back from the President — and she’s invited to the annual White House Easter Egg Roll.

President Obama made waves last year when he mentioned he had received a letter from a little girl asking him to put some women on U.S. currency, which he called a “pretty good idea.” That letter was from Sofia, a Massachusetts girl who was just finishing third grade at the time.

“I was studying Ann Hutchinson, who stood up for women’s rights,” she says. “Almost everyone who chose a boy, on their poster they had pictures of different dollar bills or coins with their person on it. So I noticed, why don’t women have coins or dollar bills with their faces on it?”

Sofia, now 9, knew immediately what she had to do. “I just came home from school and said, ‘I need to write to the president.’” Sofia’s mother provided her letter exclusively to TIME:

Kim B. (Sofia's mother)
Image courtesy of Kim B., Sofia’s mother

For a while, Sofia didn’t hear anything back from the President. She says she “sort of forgot about it” until her dad showed her the President had mentioned her letter in a speech. “I was really excited about it, because I thought that maybe it would actually happen,” she says.

In the months since Sofia wrote to Obama, a campaign to put a woman on the $20 bill has gone viral. The W20 movement is hosting an online poll so the public can vote on which woman should replace Andrew Jackson. The group plans to petition Obama and the Treasury Secretary to make it happen. Almost 220,000 people have voted in the online poll so far. And Sofia, who is now in fourth grade, is a junior ambassador for the campaign.

MORE 10 Countries That Put Women on Cash Before the U.S.

Even though she’s a longtime fan of Ann Hutchinson, Sofia wants to see Rosa Parks on the $20. “What she did was really important,” she says. “If it wasn’t for her, we’d still be segregated today.” She got her whole class to vote in the online poll, and her third grade teacher got her class to vote as well.

Last month, Sofia finally got a personalized letter back from the President, along with an invitation to attend this year’s White House Easter Egg Roll. Here’s what President Obama wrote to her:

Unknown-1
Image courtesy of Kim B., Sofia’s mother

“The women you listed and drew make up an impressive group,” Obama wrote. “And I must say you’re pretty impressive, too.”

“I’ll keep working to make sure you grow up in a country where women have the same opportunities as men, and I hope you’ll stay involved in issues that matter to you,” he continued. “If you keep focusing in school and trying to help others whenever you can, there are no limits to what you can accomplish.”

Sofia wants to be a teacher or a scientist when she grows up — after a younger friend was diagnosed with cancer, she decided she wants to study cures. But she also has some advice for other kids her age who want to make a difference. “Write a letter to somebody important,” she says, “because something could happen and it could actually change.”

Read next: The Campaign to Get a Woman on the $20 Bill Is Picking Up Steam

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