The holidays are upon us and although 2020 isn’t a traditional year people are still getting into the holiday spirits. Gifts have become a huge part of the holidays, which we all know can add a lot of additional stress. This year there is the added stress of what is the best way to get gifts to loved ones? Shipping can be expensive and you risk packages getting delayed, lost, or broken so I wouldn’t be surprised to see more monetary gifts be given.
Happy New Year! With 2020 in the rearview mirror, we are hoping for a great 2021.
January is a great time to think about getting all of your financial paperwork organized. Organizing will create a calm space, save time in the long run, and help prepare for tax season. Below are 5 ways to help get your financial life in order.
During open enrollment one important decision that has to be made is which medical plan is best for your situation. When comparing the health care plans, if you have a plan option with a high deductible paired with a health savings account, do not immediately rule it out. Below are 5 reasons to consider this plan:
Triple Tax Advantage
Money put into your HSA is with pre-tax dollars
Withdrawals are tax free, as long as used for qualified medical expenses
Can often be deducted automatically from your paycheck
Pay medical expenses with pre-tax dollars
Use HSA funds to pay for qualified medical expenses (including dental and vision services)
Without the HSA, the only other way to deduct medical expenses is by itemizing your deductions on your tax return and they must exceed 7.5% (2020) of your gross income
HSA is Portable
The HSA is owned by you and does not have a “use it or lose it” option
If you deposit money into the HSA, the funds remain in the account and are available in future years
This is the primary difference between the HSA and the FSA
If you change jobs, the HSA can go with you
Account Grows
Funds are kept in interest bearing account (similar to bank accounts)
Can be used as a long term investment and based on your risk tolerance, invest in the stock market
Additional Retirement Account
After age 65, the HSA can also be used as a retirement account.
Will be treated similar to a Traditional IRA. When withdrawals are made you will only pay income tax.
Unlike Traditional IRA’s, you are not required to make withdrawals at age 72
Since Oprah stopped giving cars away in 2011, we recently had to face the challenge of getting our daughter a better vehicle. While her getting older and purchasing this car should have come as no surprise, it came faster than we wanted (we should have started earlier!!) and I wanted to share a few things we did to prepare for the purchase of the car.
Utilizing Savings
Throwing all Extra Funds into the Savings
Create a Physical Savings Chart
When the time arrives to Purchase, Choose a Budget!
Involve your Teen in the Purchasing Process
Utilize a Teachable Moment
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