Buzz
While you may have your personal financial objectives for 2019, if you're married or in a partnership, ensuring you and your spouse are aligned on financial matters is crucial to keeping your financial goals on track.
You might plan to have periodic check-ins or think about discussing finances with your partner at some point in the future. But why delay? According to Kiplinger, certified financial planner Lisa Brown advocates for doing this on January 1st.
On the first day of the year, Brown shares, she and her husband sit down to map out their goals for the year. This serves two key purposes, she says:
It helps us balance our family plans while also reviewing our current financial investments. On one hand, it’s enjoyable to think about a family vacation to Disney or a Caribbean cruise. On the other hand, we assess the status of our savings and investments to ensure we’ll have enough funds to live comfortably today, in the next 20 years, and to cover three college educations in between.
If you’re aiming for a more prosperous 2019, here are a few things to think about during your money date.
Clear Your Debts
If you're like the average American household, you probably accumulated some expenses over the holiday season. You'll want to pay those off quickly, and don't forget to factor in any other debts you may have. Create a plan for repayment.
Organize Your Vacations
Especially if you have kids, it's essential to plan your destinations, decide how much time to take off, and determine your budget for the trip.
Automate Your Individual Retirement Account Contributions
In 2019, you can contribute up to $6,000 to an IRA or Roth IRA if you’re under 50, and $7,000 if you’re over that age. “I enjoy the discipline and challenge of saving the maximum every year, as you can’t go back and make up for missed IRA contributions,” writes Brown. Discussing this with your spouse or partner can help both of you align and stay on track to maximize contributions.
Additionally, if you’re able to and qualify, increase your 401(k) contributions.
Think About Your Children’s Higher Education
If you’re planning to help fund your children’s college expenses, consider increasing contributions to a 529 plan or exploring options to open one. (Morningstar offers a comprehensive review of the best accounts in the nation.) Not only will this benefit your children in the future, but it will also lower your tax bill. “Along with providing families with a way to save, many states offer a tax deduction for these contributions,” shares Brown. “We live in Georgia, where a married couple can deduct up to $4,000 for each child they contribute towards their state income tax.”
Evaluate Your Health Plan
If you have a high-deductible health plan, you may open a health savings account (HSA), which provides several benefits. You can contribute pre-tax dollars (lowering your overall tax burden) and use the funds for medical expenses. If unused, the balance can roll over into retirement.
In 2019, you can contribute up to $3,500 if you have individual coverage or $7,000 for family coverage.
“Because we aim to allocate funds for all these accounts, we set aside monthly savings for the 401(k) and 529 plans, and make periodic lump sum deposits into our IRAs and HSA whenever we have extra cash flow,” suggests Brown.
Alright, you might be a bit sluggish on January 1, or have other commitments. That’s okay! But the sooner you sit down together and discuss your goals, the better your chances of accomplishing some of your financial objectives.
