Are you ready to kick off 2018 with a better financial you? Do you want to set aside your spending ways and educate yourself on money matters, once and for all?
We rounded up some financial advisers, accountants and bankers ― and sprinkled their advice with some plain old common sense and a touch of online expertise ― to bring you these six ways to improve your finances. Some result in immediate savings, while others are things you can do now to secure benefits in the future. All can be crucial to your overall financial plan.
1. Get over being afraid of the stock market.
The stockbroker your parents used for years may be a great guy, and perhaps even a family friend who danced at your wedding. But is he necessarily the right broker for you? Learning how to invest your money is an important skill, and your fear may be based simply on the idea that you don’t know how any of this investing stuff works. The thought of just handing over a chunk of your hard-earned money with no guarantee of it growing is understandably terrifying.
The way around this is education. A broker is the intermediary between you and the investing world. You pay a fee for the broker’s advice and access to his knowledge and recommendations.
But you still should educate yourself. And, why yes, there are apps for that. As NerdWallet notes, “When you’re a beginner investor, the right brokerage account can be so much more than simply a platform for placing trades. It can help you build a solid investing foundation — functioning as a teacher, advisor and investment analyst — and serve as a lifelong portfolio co-pilot as your skills and strategy mature.”
2. Make use of Health Savings Accounts.
Enrolling in a tax-advantaged health savings accounts, either through an employer or directly, can play a pivotal role in helping you manage health care expenses both today and in the future, said Cyndi Hutchins, director of financial gerontology at Merrill Lynch.
“According to our 2017 Workplace Benefits Report Healthcare Supplement, 79 percent of employees indicate they’ve experienced a rise in health care costs last year and just 11 percent felt that they knew where to figure out how to cover health care costs in retirement,” she told HuffPost.
An HSA is a medical savings account available to taxpayers in the United States who are enrolled in a high-deductible health plan. The money that you contribute to such an account is not taxed. And in addition to tax-deductible contributions and withdrawals, an HSA offers the ability to invest, and potential to grow financial contributions tax-free over time. Unlike other “use it or lose It” vehicles, HSAs are portable and controllable ― meaning they can be used to fund qualified medical expenses and health-care costs not just today, but in retirement.
3. Take action, however small, toward a financial plan.
Do money worries keep you up at night? Do you live paycheck to paycheck and just can’t manage to get ahead? Do you dream of owning a house one day but can’t figure out how to save for the down payment? “Hope is not a plan,” said Paul Kelash, vice president of consumer insights for Allianz Life. He advises living “by the A’s ― the Antidote to Anxiety is Action.”
Kelash said that too often, people become paralyzed by financial worry and struggle to even acknowledge that their own poor financial habits could be creating that overwhelming anxiety.
4. Understand Social Security filing strategies.
William Meyer, founder and managing principal of Social Security Solutions in Kansas, testified before the U.S. Senate last year that strategy matters when it comes to claiming Social Security benefits. Some people start collecting benefits early, at age 62; others defer collecting until they turn 70, at which point the monthly payments have grown by 8 percent a year.
Meyer told HuffPost that pending retirees need to focus on the cumulative benefits (i.e., adding up all the payouts from a strategy versus just looking at the monthly difference in payouts across different strategies) before they decide when and how to claim benefits. The Social Security Administration cannot and will not give a person advice.
“It is worth conducting detailed research to explore all your options, or hiring an expert so you don’t leave significant money on the table,” he said.
General rule of thumb: The longer you wait, the more you will get. But the longer you wait, the fewer years you will be alive to collect benefits.
Via Huffington Post