Monthly Archives: December 2014

New Year’s Resolutions to Save More

Happy New Year in sparklers

With today being New Year’s Eve, many people are thinking about what their New Year’s Resolutions for 2015 will be.  And maybe you’ve already thought of yours.  But it doesn’t hurt to have multiple resolutions right?  So for this post, I thought I would suggest making a New Year’s Resolution to save money.  I know, I know….shocking coming from me, right?  Here are some easy resolutions to save that will hopefully be easy to stick to throughout 2015:

  • Cut out or cut down on one regular expense that you currently have but know you could live without: morning stop at the coffee shop, dinners out at restaurants, trips to the movie theater (just stream movies at home instead), etc.
  • Vow to contribute more of your paycheck to savings.  Even the littlest bit of extra savings can help you.
  • Create that emergency fund you always said you were going to start.  Again, starting small is perfectly acceptable.  But definitely start one!

There are also other resolutions that you may have considered for health or self-improvement that can also save you money.  So double down on some of these resolutions:

  • Exercising more and eating better: You may think these resolutions could cost you more with the additional gym membership, or because healthy food can cost more than fast food or junk food.  But in the long run, creating a healthy lifestyle will save you tons in healthcare expenses down the road.  So although it’s not an immediate money saver, the financial benefits will be there in the long run.
  • Quitting smoking:  The health benefits of this will save you money just like in the previous example.  But in addition, just think about how much money you’ll save by NOT buying cigarettes each week.  Wow….that resolution is a triple threat!
  • Going Meatless: Ever considered omitting meat from some of your meals as a resolution (like “Meatless Mondays”)?  Omitting meat from your diet, even occasionally, can be better for your health, better for the environment and will save you money.  We spend the majority of our grocery bill on meat and poultry, and menu items with meat at restaurants are always the most expensive.  Choosing to eat a few meatless meals will definitely help save you some money each week.

 

Photo Credit: christmasstockimages.com

2015 Market Predictions

2015 Predictions

2014 was a pretty awesome year for investors.  We saw the Dow go from 16,441 to above 18,000 and the S&P 500 go from 1,832 to 2,089.  So as 2014 comes to a close and with many wondering if a market correction is looming, there are a lot of predictions out there for what we can expect in 2015.  And because I hold little value in what any market “expert” has to say about the future, I thoroughly enjoyed this article titled “My (100% Accurate) Predictions for 2015”.  I enjoyed it so much that I thought I would share with all of you in this week’s post.   The full article can be found here – which I highly recommend.  It is written by Daniel Solin, a financial advisor and contributor to Daily Finance…a great website for all things investing and savings.  Here are a few of my favorite predictions he makes:

  • Much of the financial media will continue to stoke fear, anxiety and appeal to investor greed rather than provide sound investment advice based on peer-reviewed evidence.
  • Brokers will continue to tout their purported ability to generate “alpha,” defined as the excess return of a fund or portfolio relative to the return of a benchmark index.
  • Most brokers who claim the ability to “beat the market” through stock picking, market timing and the selection of outperforming mutual funds will generate “negative alpha” for their clients.
  • The trend toward investing in index funds, exchange-traded funds and passively managed funds will continue. Investors have been bamboozled long enough. They are starting to wise up.
  • More investors will understand that simply doing nothing is often the best investing strategy.

All great advice that follows the same theme maintained here at HHHY.  So for 2015 (and every year thereafter), the best thing you can do is to ignore anyone that makes “market predictions” and continue to buy and hold.  Here’s to a prosperous New Year!

 

Photo Credit: Ryan

Tax Savings Tips for Year End

Year End Tax Savings

The clock is ticking down until year-end for 2014.  But there is still some time to make good financial decisions that can lower your tax bill.

Max-Out your 401K:  You have until 12/31/2014 to contribute to your workplace retirement account (401k, 403b, or other employer defined contribution plan).  This year the max you can contribute is $17,500.  So if you’ve haven’t already contributed that and want to reduce your tax owed for this year, contact your employer’s HR department or retirement plan administrator to find out how you can contribute more before the year-end deadline.

Contribute to Other Retirement Accounts:  You have until April 15th, 2015 to contribute to an IRA.  And in doing so you can also reduce the taxes you owe.   If eligible, you can contribute up to $5,500 (or $6,500 for people 50+) in 2014.  Saving for your future and saving on this year’s taxes….that’s a one-two punch!  Check out this post on IRAs to see if you’re eligible to contribute.

Tis the Season to Give to Charity:  If you itemize your deductions (which many home owners do), now is the time to clean out your closets and garage and donate to a charitable organization.  Be sure to keep a receipt, and while valuing your donation may be tricky, I’ve found that Turbo Tax has a good tool for this.  All monetary donations must also be dated by 12/31/14 too.  Hang on to your canceled check or credit card receipt for these.  If the amount is $250 or more, you’ll also want a receipt from the organization.  Most charities with online payment options will send you an email receipt.

Use Up Those Flexible Spending Accounts: Many employers offers Flexible Spending Accounts in the form of medical expenses and/or child care expenses.  In the past, you had to “use or lose” those funds by year-end.  But recently the IRS has extended that deadline until 2.5 months after your benefit year.  This means that if you’re on a calendar benefit year, you can submit your claims up until March 15th, 2015.  However, despite the new law by the IRS, not all employers are required to extend the time-period for their Flexible Spending Accounts, so be sure to check with yours.

 

Photo Credit: PhotoSteve101