Blog

Keep up to date on the latest tax and accounting news and updates to our firm.

Client Update Newsletter: October 2024

Achieving financial security for you and your family is no small task. With inflation and the allure of signing up for yet another monthly service, saving money can feel like an uphill battle. In this month’s newsletter, read about 5 ideas that can help you save money on your road to building wealth.

Also learn about several tips to protect your Social Security number, why you should think twice before tapping retirement accounts to pay for emergencies, and ideas that can help your kids thrive this school year.

Please pass this information on to anyone that may find it useful and call if you have any questions or concerns.

Contents

5 Ideas to Help Save Money

5 Ideas to Help Save Money imageCreating a sound financial foundation for you and your family is anything but easy. It is tough to save when everyone is tempting you with adding one monthly service after another. Add to that the high increases in things like property taxes and insurance and you realize that saving is becoming more of an art form than a great habit. So here are some ideas to help build your wealth.

  1. Pay yourself first. Treat saving money with the same care as you pay your bills. Take a percentage of everything you earn and save it. Using this technique can help build an emergency fund and keep you from living paycheck to paycheck.

  2. Know and use the Rule of 72. You can roughly calculate the number of years compound interest will take to double your money using the Rule of 72. Do this by dividing 72 by your rate of return to estimate how long it takes to double your money. For example, 10% interest will double an investment in 7.2 years; investments with an 8% return will double in nine years. Use this concept to understand the power of saving and investment.

  3. Use savings versus debt for purchases. Unpaid debt is like compound interest but in reverse. For instance, using a 20% interest credit card to pay $1,500 for home appliances costs nearly $1,000 in interest expense if paid back over 5 years (on top of the original $1,500!). The result is that you have to work harder and earn more to pay for the items you purchase. A better idea is to save and then buy your dream item. Even better, when you save in a high interest account, you put interest to work for you to make the purchase more affordable.

  4. Understand amortization. When a bank loans you money, it gives you a specific interest rate and a set number of years to pay it back. Each payment you make contains interest as well as a reduction of the amount owed, called principal. Most of the interest payments are front-loaded, while the last few payments are virtually all principal. Making additional principal payments at the beginning of the loan’s term will decrease the amount of interest you pay to the bank and help you pay off the loan more quickly.

  5. Taxes are complex and require help. Tax laws are complicated. They are made even more complex when the rules change, often late in the year. Even worse, the IRS is not in the habit of telling you when you forget to take a deduction. The best way to stay out of the IRS spotlight AND to minimize your taxes is to ask for help.


Tips to Protect Your Social Security Number

Very few things in life can create a higher degree of stress than having your Social Security number (SSN) stolen. This is because, unlike other forms of identification, your SSN is virtually permanent. Here are some things that you can do to minimize the risk of having your number fall into the hands of the wrong people.

Replacing a stolen SSN is not only hard to do, it can create many problems. Your best defense is to stop the theft before it happens.


Think Before Tapping 401(k)s and IRAs as Emergency Fund

Think Before Tapping 401ks and IRAs as Emergency Fund imageAll Americans are now allowed to withdraw up to $1,000 every year from retirement accounts to pay for a broad range of emergency expenses. There are several reasons, however, why you should avoid tapping your retirement accounts at all costs.

Reasons to leave retirement funds alone

Ideas to find cash

Instead of tapping into retirement funds, here are some ideas to generate the cash you need:



Straight As: Ideas to Help Your Kids Thrive This School Year

Straight As Ideas to Help Your Kids Thrive This School Year imageYour child's education now features more screen time, more remote learning, and more opportunities to be tripped up in our online world. The good news is that you can still make a difference in your child's life as they continue their journey from elementary school through high school. Here are some ideas to help your child thrive this school year.

Every new school year is a new opportunity for new memories for both you and your children. By leaning into these and other ideas, you can help your kids thrive this school year.



Newsletter Archive

Please note: Some material may be time-sensitive and may no longer apply.
Please contact us with any questions.