In a few weeks, the first quarter of 2015 will be over. Did you set any financial goals at the beginning of the year? How are you tracking against those goals? A periodic assessment of your financial standing is a healthy practice.
Here are some tax-smart, wealth building moves I have made in the last few months:
- Increased my 401K contribution to take full advantage of the employer match. Tired of leaving free money on the table, I finally took the plunge. I am socking more money away from each paycheck and I haven’t noticed a decline in my current standard of living. I wish I had made this move sooner.
- Increased the number of allowances on my W4. The user-friendly tax withholding calculator on the IRS website came in handy. I figured out how many additional allowances I could claim and still ensure I don’t owe the government come tax time. Increasing my allowances means less tax is withheld from my paycheck. I figure I can put the extra money to better use than giving Uncle Sam an interest-free loan.
- Opened Health Savings Account. Our family is blessed with good health. Outside the routine annual check-up, we seldom have cause to go to the doctor’s. So this year, I switched to a high deductible health plan and opened a Health Savings Account (HSA). The HSA is an interest-earning savings account that allows enrollees to make pre-tax contributions to cover medical expenses. Unused balances can be rolled over from year to year. Slowly but surely, the account balance is growing as my employer also makes contributions to the account and I have only had to make one small payment out of the account.
Wealth building is a marathon, not a sprint. The steps I shared above are simple steps that anyone in a similar situation can implement to gain traction on the road to wealth creation.
What practical steps are you taking to secure your financial wellbeing? In the next posting, I will share with you other financial moves I have made this year and some milestones I hope to reach in the next couple of months.