If you are reading this expecting a standard end-of-year financial checklist or a “looking ahead to 2023” theme, you would be well justified in doing so. Planners love to begin making plans for the coming year, and I am no different.
However, during this time of year, we typically have checklists filled with to-do items, from returning gifts that did not quite hit the mark to putting away holiday decorations it seems we just brought out of storage last week. So instead of lengthening our checklists, let me suggest we remain focused on this season of giving and receiving.
I am reminded that so many of the financial gifts we at Bridgeworth see clients receive are ones we have worked on together, after careful choosing, years in advance. A mortgage paid in full? Thank yourself for those past 15-30 years of monthly payments. A comfortable retirement nest egg? Those years of payroll deductions to your 401(k) or annual IRA contributions served to wrap that box incrementally over time.
So act now to give a gift to your future self, and make it one you can enjoy sooner rather than later. Here are two financially savvy gift-giving ideas your future self may enjoy in just twelve short months:
- AN EMERGENCY FUND BOOST: A silver lining to the 2022 interest rate increases by the Federal Reserve is rising yields for cash reserves. For a true emergency fund, one from which you do not expect to make withdrawals, barring the unexpected, consider stashing at least a portion of your cash in a CD. You may find rates offered by both traditional brick-and-mortar and online banks in the 3 to 4% range for a 1-year CD term. This can mean as much as $300 to $400+ of earnings for each $10,000 you have invested over the next year.1
- A PENNY SAVED= A PENNY EARNED: With the advent of subscription services filling our credit card bills, many third-party apps and services are available to reduce or eliminate some of these expenses. Some services help categorize your spending, and some will negotiate a lower bill cost on your behalf (with your permission). Still, the core focus for most is helping you cancel unwanted subscriptions that slowly erode your monthly cash flow. Names such as Trim, Billshark, and Rocket Money are often cited as such providers, but regardless of your choice, ensure you look for bank-level security for any service you pursue. With a little effort by you or by a tech-savvy child or grandchild making a holiday visit, your monthly savings can add up fast by next December.2
May your 2023 have a wonderful beginning, and on behalf of Bridgeworth, we thank you for the gift of your trust and confidence that allows us to serve you.
Bridgeworth Wealth Management is a Registered Investment Adviser.
This content does not constitute legal, tax, accounting, financial, or investment advice. Any discussion pertaining to taxes in this communication may be part of a promotion or marketing efforts. As provided for in government regulations, advice related to federal taxes that is contained in this communication is not intended or written to be used, and cannot be used, for the purpose of avoiding penalties under the Internal Revenue code. You are encouraged to consult with competent legal, tax, accounting, financial, or investment professionals based on your specific circumstances. We do not make any warranties as to the accuracy or completeness of this information, do not endorse any third-party companies, products, or services described here, and take no liability for your use of this information.
Sources:
1 https://www.bankrate.com/banking/cds/cd-rates/#top-cd-rates-by-term
2 https://www.cnbc.com/select/best-bill-negotiation-services/