In light of our current economy, making sure your money works hard for you is one of the best things to do this year. Here are some ways you can navigate your financial situation, keep tabs on where you are and adjust if you need to.
Shop for a higher return on savings. These days, every extra cent counts. That’s why it pays to look around for higher rates on savings accounts. Several places to check out are PNC (4.65 percent APY); Sofi (up to 4.4 percent APY); and American Express (4 percent APY). Here’s a few others. Rates may increase even more with the Federal Reserve’s rate hike announcement on July 27.
Open an HSA account. When you have one of these, it will help you pay for expenses that your health insurance plan doesn’t cover. If you are enrolled in a high-deductible insurance plan, you and possibly your employer can contribute pre-tax dollars into this account, from which you will use funds you’ve stocked away for qualified medical expenses. Whatever money you don’t use will roll over to the next year, unlike FSA accounts.
Consolidate debt. Why pay a bunch of different interest rates on all your credit cards? If you have debt, find one card with a very low interest rate and do a balance transfer. Some credit cards offer 0 percent APR as an introductory rate, which will be a big savings to get a jumpstart on becoming debt free. Here are a few good ones: Bank of America® Travel Rewards Credit Card now offers 0 percent APR for 18 months. Discover it® Cash Back offers 0 percent APR for 15 months. Find other great deals here.
Cut how much you pay on car insurance. Have you shopped around lately? We know this might seem like a pain, as it takes a lot of time, but here’s some good news, and it’s called The Zebra. This amazing site has done all the heavy lifting for you. Here, you’ll find dozens of real-time comparisons from many trusted companies.
Max out your 401K. This year, the maximum yearly contribution limit has been raised by $200 to $22,500 (up from $20,500 in 2022). Even better, if you’re over 50, you can set aside catch-up contributions of $7,500, allowing a total contribution of up to $30,000. This allowance lets older workers add as much as they can, so that when they retire they’ll be in a better financial situation.
Update your W-4. No one likes a shock when it comes to paying taxes. That’s why this is such a smart idea. And the IRS actually has a tool that can help you: The Tax Withholding Estimator. Go here to find out if your employer is taking enough money out for taxes. If you’re falling short, you’ll know. Better to learn and fix this before it’s too late.
Create a net worth statement. When you have a realistic idea of your assets and liabilities, you will be able to see whether or not you are on the right track with retirement. This way, you’ll be able to set up new goals for yourself if you feel you need to.
Keeping up with your finances, while time-consuming, really pays off. If you try one (or all) of these hacks, you’ll be better off in no time.