26 Jan Best Financial Moves for 2018
On The List of promises you made to yourself for 2018, along with thinner might have been richer. Towards the latter goal, we curated this story by Ann Brenoff from the Huff Post: “The Best Financial Moves You Can Make in 2018.”
Money background
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.”
NerdWallet rated the best online brokers for beginning investors and gave the highest marks to Merrill Edge. An offshoot of Merrill Lynch, Merrill Edge doesn’t require an minimum investment, charges $6.95 per trade and offers cash promotions. Users like the customer service and schooling they receive, and noted the “robust” nature of the company’s research.
2. If you drive a clunker, don’t insure it like a Tesla. And if you’re married, don’t insure your car like someone who’s single.
Car insurance in some states ― yeah, California, we’re looking at you ― is a bill that can rival your mortgage.
If you’re driving an older car, paying for physical damage coverage (commonly called collision insurance) when you don’t have to may be a waste of money. For example, assume your car’s current value is $1,000, the same as your current deductible. If your car is stolen, the insurance company will reimburse you for the value of the car, minus your deductible ― in other words, nothing. In an accident, you’ll be responsible for all repairs up to $1,000, and the insurance company will reimburse you for any repairs over $1,000, up to the value of the car ― again, nothing. By dropping your physical damage coverage, you can save some money on premiums, advises the American Institute of CPAs’ 360 Financial Literacy Program. Run the numbers yourself, or get help from an agent. Just remember that you are still legally liable for any damages you cause.
While no one gets married just to lower their car insurance rates, tying the knot does make you and your spouse less-risky drivers than single people in the eyes of your insurance company. Your insurer will lower your premiums, but first you need to report it to them, the program notes.
When you reach age 25, you also hit a milestone in the eyes of most auto insurers and step into a new, slightly lower risk category. Everything else being equal, that means a lower rate. If you don’t notice a difference, call your agent and ask what’s up.
3. 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.
4. You will likely be a caregiver, so start preparing for it now…
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