Money Tip of the Month (Repeat from February)
It’s tax time! 1099 mailings are 99% complete. You can access your 1099s online:
- Go to www.myaccountviewonline.com and log in
- Click on the Documents & Statements tab
- Click on Tax Forms and then 2018
- Click on any Statement to view and download
Spring Break is Right Around the Corner
Have you made spring break plans yet? It doesn’t matter if you have school age children or not. Plan a trip for next month and get out of town. You’ll be glad you did.
Money Tip of Forever – What’s Your Income Growth Plan?
Since the New Year, I have seen quite a few articles on the topic of reorganizing your financial life and setting goals. Titles like ‘Top 10 Financial Moves for 2019’ and ‘How to Get on Track This Year.’ These articles are nice, but none of them address the most important component of financial success: What’s Your Income Growth Plan?
Several years ago, my wife and I were going through our budget. As with most families with small children, we had a shortfall. After going back and forth over mandatory expenses v. nice to haves, my wife concluded aptly: ‘we don’t have an expense problem, you have an income problem.’ Ouch.
Harsh, but true. Income solves a lot of problems! Your number one goal should be to grow your income each year faster than your expenses grow. How much time and effort do you put into income growth? Maybe less than you should.
Aside from the obvious benefits of a higher income, the most important element for long-term savings is your annual savings rate. A small increase in income can dramatically improve your savings rate.
For example, a family with an income of $100k and expenses of $95k has room for just a 5% savings rate. That’s not enough. Seeking a promotion or raise to $110k while maintaining a constant expense level now allows for $15k in annual savings. A 10% increase in income ($100k to $110k) can result in a 3x increase in savings. That would certainly allow you to make some serious progress toward your goals! So instead of spending all your financial planning time on expenses, dedicate some effort into the income side. Your retirement accounts will appreciate it!
Pro tip: Best time to negotiate a raise? When you first start a job. All future increases will be based on that initial amount. Start ahead, stay ahead.
Feel free to call or email us any time.
The opinions voiced in this material are for general information only and are not intended to provide specific tax advice or recommendations for any individual.