Are you missing out on free money from your employer? If your employer offers an Employee Stock Purchase Plan (ESPP), odds are you’re missing out.
30% of people have an ESPP and don’t participate according to the National Association of Stock Plan Professionals. Many cite a fear of investing too much in their employer stock or their budget doesn’t allow them to invest. Close in third are people who just haven’t bothered to learn to use the program so don’t know where to start.
Here’s a few hacks to help you overcome these challenges and start putting more of your employer’s money in your bank account.
1. Having enough extra cash each month to participate
You don’t need extra cash flow to participate, there are a number of methods you can use to re-organize your monthly, quarterly, and semi-annual payments so that you can free up cash to use in the ESPP. For example you can re-organize your monthly payments, use a credit card deferral plan, or adjust the timing of your savings contributions.
Re-organizing your monthly payments is straight forward, many services that you pay for such as auto, homeowners, and renters insurance can all be paid on a semi-annual or annual basis. The same is true for property taxes if you’re a home owner.
Building a credit card payment deferral plan is a simple strategy to leverage multiple credit cards to defer payment until the ESPP is fully vested and you’re able to access the money in the account.
Adjusting your savings plan contributions can mean saving for a new outfit, saving for college, or saving for retirement. Adjusting the amount you put into those plans every month with increased contributions after your ESPP contributions vest is a simple and straight forward way to begin using the ESPP without a lot of other changes.
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