End of Year Money Moves

money management

THIS POST MAY CONTAIN AFFILIATE LINKS.  SEE MY FULL DISCLOSURE FOR DETAILS.

Now’s the time to be anticipating money moves for next year.  To avoid losing valuable compounding time or growth, you want to be able to pull the trigger on January 1st.  Check into what your accounts and plans offer and ask questions in advance.

With year-end bonuses and raises coming up, certain accounts require tweaking.  For example, with each year’s payroll increase, my retirement plan contribution percentages can be adjusted.  I examine every payroll deduction and determine if I am gleaning the maximum benefit from each.  See below where I will fund my 2018 Health Savings Account contribution using an IRA transfer.  Because I won’t need a payroll deduction for that account, I can adjust my Flexible Spending Account contribution and reinstate my vision benefits.  I don’t pay for vision benefits each year, only the years that I plan on buying glasses.

In the financial planning workshop I conducted over the past three weeks, someone posed a question as to how to manage changes in the economy and the tax code.

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How Money Plays a Role in Our Lives

financial control

I see everything through a money lens.  I realize most people don’t.  The notion of excluding money from everyday thinking is unrealistic to me.  Unless we live off the grid and grow our own food, then money may be considered trivial.  In the real world, money is the medium through which we manage our standard of living.  Ignoring the role it plays in life is downright naïve.  We exchange money for everything: food, shelter, clothing, electricity, heat, transportation.  Most people shun money topics, or think it’s too boring to talk about.   Reality is, money is the undercurrent of life.  People say they don’t care about money.  They say they want to ski all day or go fishing but they still have to buy the skiing gear and fishing rods.

This post is about how money is intimately interlaced into every area of life and why it’s critical to pay attention to monetary affairs.

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Financial Planning Workshop Is A Success

financial planning

I’m conducting a personal financial planning workshop at a local bookstore.  In three sessions, I plan to provide an overview of the following aspects of financial planning: saving, spending, investing, retirement, and insurance.

The first session, this past Thursday, was a success.  A small group showed up representing all age groups.  I started with my usual introduction, explaining how each person’s mentality towards money drives their money habits.  With the following visual, I outlined the topics that, when combined, result in balanced financial management.

financial planning

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Financial Management Questions to Ask Yourself

money-management

THIS POST MAY CONTAIN AFFILIATE LINKS.  SEE MY FULL DISCLOSURE FOR DETAILS.

“I’m wealthy enough and I have enough money, I don’t need anymore” – said no one ever

If you read many financial planning blogs on how people are retiring early, traveling on a whim, and writing their own rules, you may be taking their straight advice to reach the same result.  Save, save, save, budget, cut expenses out of your life forever.  If it leaves you wondering, What’s the secret recipe?, you’re not alone.

While it’s always good to read reference material or find the most important tips, have you stopped to ask yourself questions?

Questions require self-reflection and elicit a deeper response.  Questions provoke brain-simmering.  When you let questions float through your mind, you stir up your cognitive ability, reaching into your deepest feelings.  The edges of your mind will connect to concoct a spark of clarity that will throw the mental shades back.  You will be surprised at the ideas and awareness that will surface.  Flashes of creativity will pop to the forefront of your mind when you least expect it.  Like, when putting dishwasher detergent in the little slot, you may think of the easiest change you can make to improve your financial status, then think, “Where did that come from? And why didn’t I think of that before?”

It may be as simple as asking someone for advice, looking up a book title in the library, or going all in on opening up a new investment account.  Maybe you’ll figure out how to defer medical expenses when you re-instate your flexible spending plan.  Maybe you’ll boost your savings by making a bi-weekly habit of transferring money from your checking to your savings account before you can spend it (a proven successful habit).  Maybe you’ll pull all your credit card statements together and put them in order of payoff priority.

Challenge yourself to answer the following questions and see if you can create some new money habits or tweak your current methods.

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4 Super Easy Ways to Start Investing – Today

easy investing

THIS POST MAY CONTAIN AFFILIATE LINKS.  SEE MY FULL DISCLOSURE FOR DETAILS.

Start Investing Now

I continue to hear that people are confused about how to start investing.  Honestly, I don’t understand such bewilderment.  If you ask me, investing has never been easier.  Maybe before the Internet, but not now.  There is so much information out there, no one should be at a loss. However, money mentalities are responsible for this.  Everyone has their priorities and if managing their money is not near the top of the list, it gets forgotten.  If someone is immersed in their career or other priorities, their money mentality takes a back seat.  Totally understandable.

Learning how to invest can be a lifetime endeavor, and a confusing one.  With the number of available investments, it can be dizzying to even attempt to understand it all.  Dizziness leads to zone-out, and ultimately, non-action.

Here are a few remedies to ensure that you are participating in the world of investments.

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Asset Allocation and Annuities

investment allocation

Asset Allocation

Knowing which direction to move toward is a key component of adequate financial planning.

I would like to take a break from the Learning Checklists and talk about my latest research.  Asset allocation recommendations and annuities have been my latest focus.

I don’t like relying on the first thing that I read, for two reasons.  One, I don’t always agree with the adviser and two, it can be too rigid.  Because my nose is in a financial book almost every day of the week, I like to combine all my resources and find the common denominators.  Here are several models:

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Money Learning Checklist 4 – IRAs

money management

THIS POST MAY CONTAIN AFFILIATE LINKS. SEE MY FULL DISCLOSURE FOR DETAILS.

An Individual Retirement Account (IRA) is a great way to accumulate a retirement stash.  It’s also a great way to protect asset growth and investment earnings from taxation.

I highly recommend contributing as early as possible.  IRA contributions can begin when an individual has earned income.  Therefore, it can begin with a teenager’s part-time earnings.  Visit your favorite bank or online broker and open an account if you don’t already have one.

Learn what your maximum contributions are

IRA contributions come with conditions.  There’s a maximum amount that can be contributed and it can change every year.  Know what yours is.  It’s based on your filing status, married vs. single, etc.  The next condition to reach is eligibility for a tax deduction.  Again, it depends on your filing status and whether you participate in your employer’s retirement plan.

For employees that participate in their employer’s retirement plan, a full or partial deductible contribution is still a possibility if the amount is less than the range specified for the type of filer.  You can easily find the current year’s table for the income ranges by filing status by doing an internet search or by looking in the IRS publication.  Notice that I’m not spelling it out, it’s up to you to gain some awareness.

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Check out my Facebook page

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If you haven’t visited my Facebook page, you are missing out on some great money information.  I pull a variety of interesting money articles from all over the World Wide Web.

Check it out and Follow or Like!

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