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Three Financial Moves To Make When You Get Promoted

There are few things in life that deserve a glass of champagne more than a well-earned promotion.  After years of blood, sweat, and tears, your company has finally recognized your efforts and decided to move you into a more meaningful role within your company.  Sometimes, only title are associated with these promotions, but more often than not there will be financial rewards as well.   This is exactly your time to fall into the lifestyle inflation trap and make some really smart financial moves that will pay dividends down the road. The Pay Raise– Generally, a new promotion will also mean more responsibility which often equals more pay.  If your salary jumps by $10,000 or even $50,000 dollars this will mean a significant bump in your cash flow for your family.   What should you do with this money?  Is it best to add to your 401(k)?  Start paying down the mortgage?  Or time to purchase that new vacation home?   With pay ...

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Why Are You Mad At Your Accountant?

Here is a question to ask yourself after tax season is over.  What really happens during a typical tax season for a family or business? I have been doing this for over 20 years, and so let me describe to you the typical outcomes. The first thing that we see is that most people cross their fingers and say three Hail Mary’s hoping for a refund.  Does this sound like you?  You gather all of these documents that you get from your employer, your investment companies, and real estate you own, then you hand them over to somebody (an accountant or CPA) and pray that they’re going to get you some money back so you can go on that vacation or remodel your house.  Most individuals that we meet who get a federal refund during tax time think that their CPA is the bomb.  They are assumed to be the smartest, brightest, and most unbelievable individuals in the world.  It’s ...

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Personal Finance 101 – Retirement Planning – Types Of Retirement Investment Vehicles

Last week in Retirement Planning 101, I discussed what kind of assumptions you can use to figure out the island we call ‘your number’.  Once you figure out your number, there are really two very important ships that will get to that number.  First, how much money do you need to save on a monthly basis to get to your number?   Second, what rate of return on an after-tax basis do your assets need to earn to reach the retirement number?  This week, we will review some of the vehicles you can use to work toward your retirement goal. Employer sponsored retirement plan (401(k), 403(b), 457) – Most employers whether they be companies, schools, hospitals, or government agencies will have a retirement plan they sponsor that allows you to save for retirement.  The 401(k) plan is probably the most widely known of all of these plans.  401(k) plans allow employees to put away dollars on a pre-tax basis into an ...

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Is it smart to get tax refund?

Around tax time, we often hear the question, “Is it smart to get a tax refund?”  The answer really falls into the ‘it depends’ category. In general, I am not a big fan of getting refunds.  Anytime in today’s world that you give the Government an interest free loan of your money for a year is probably not a good idea.  When you get a refund, you withheld too much money out of your paycheck over the course of the year.  When your actual tax calculation is done at year end, you will receive the excess withholding back in the form of a refund.   This means that you should really sit with your accountant, CPA, or financial advisor and adjust that withholding number for the current tax year.   If you are going to put more money back into your paycheck, make sure you have those dollars systematically saved into some type of savings or investment vehicle so you don’t spend ...

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