You may be invested in a 401(k) plan without really knowing what it is or what’s happening with your money. It’s a task many of us avoid because the whole process can be confusing and overwhelming. Even though it’s better to have started than to wait to understand it all, it’s ideal to have a handle on what exactly is happening with your hard-earned cash. Hello, financial adulting! Here’s everything you need to know about your 401(k).
A 401(k) is a company sponsored retirement plan. That means, you can’t open one up on your own. If your company doesn’t offer a 401(k) (or 403(b) if it’s a non-profit), you can open up and invest in an Individual Retirement Account (IRA). Or, if you are an entrepreneur, there are an array of options available to you.
Some of us build up a collection of 401(k)s from past employers. We might even get emails about them, and they seem like they’re doing fine. We’ve heard diversifying is good, so maybe having multiple accounts is serving us well? But we also hear we should roll over our old 401(k)s? What should we do?
When you leave a company where you had a 401(k), you have four options.
One of the reasons investing can feel daunting is that it comes with a whole language of jargon. ETFs, mutual funds, expense ratios - the list goes on and on. It’s enough to make your eyes glaze over.
Unfortunately, if we’re going to invest and grow our money (yes, please!), we’re going to want to understand some of this jargon so we can invest confidently and competently. But the good news is that like with any language, we can get more comfortable with the vocabulary over time. Today we’re starting with “ETF”. Here’s everything you need to know (and then some).
We asked Jazzy, the Founder of First Hustle, Then Brunch, how we can make a budget that aligns with the things that bring us happiness and joy.
Here’s her incredible four-step process.
The tax filing deadline was extended to May 17th this year which has given us more time to procrastinate doing our taxes. Hooray! But the deadline is still coming. If you feel annoyed and confused about filing your taxes, I’m with you. I always feel like I’m making a mistake or doing something wrong.
I am excited to share a Q&A with some brilliant CPAs to answer all of your questions, but first I want to tell you why your taxes are so complicated to begin with. Tax prep companies like TurboTax (owned by Intuit) and H&R Block lobby millions of dollars each year to keep our taxes complicated. What?!
When we’re preparing to file our taxes for this year, it’s the perfect time to create a system to make the process easier next year. Why? You might be thinking, “Ashley, why add to my torture? I could finally celebrate being done!?”
Taking the time to create systems while everything is fresh in our minds is far easier than trying to remember what was important and what we needed. Taking the time to set up a system for our 2021 taxes will save us lots of stress, time, and (perhaps) money.
It might sound funny, but you have a relationship with money just like you have a relationship with anything else. It’s how you interact with and relate to money.
Our relationship with money is created over time and can be influenced by many factors. We are guided by how our parents interacted with money. We’re also shaped by mentors, teachers, friends, our experiences, and society as a whole.
Filing our taxes can be an arduous process that we often try to get through as quickly as possible. But before we hit submit or give our accountants the final okay, we want to make sure we are minimizing our tax bill (or maximizing our tax return).
Why? First and foremost, that means we’ll have more money in our pockets to allocate towards our goals. And second, if we don’t, we’re paying more taxes than we need to.
One of the most important parts of your financial plan is your goals. In order to find clarity and reduce our guilt around our spending, we have to have clear goals. That means knowing how much we need for each goal, by when we will achieve it, as well as which goal comes first.
Is it more important to me to pay off ALL of my student loans before saving for my future home? Do I want to aggressively save for retirement (and retire early!) or take an extra vacation each year?
