Are you a new parent with a new baby in your life? Or, do you already have a growing child? If so, congratulations. Obviously, you are well aware of the reality of the cost of raising a child. We all want the best for the little ones in our lives so why not start early with a 529 plan to pay for college? Many families put off funding for college until the child is in high school and that makes paying for education much more challenging. Instead, you should start early; like at birth, and let time and compounding work to your advantage.

It’s nearly the end of January. For many, this is the first milepost for checking on those goals. It’s also time for companies to have W-2 statements available for employees. Along with that comes trade confirmations, 1099 forms, and various other tax documents. Many of which need to be completed and ready for issue by the end of January or very soon thereafter.

I am sure you have all heard the term options mentioned casually in conversation or batted about in the press. But what exactly are folks talking about? Generally, they are referring to stock options, but even that terminology is a bit vague and has many variants. At its most basic, a stock option is the right, but not the obligation, to buy a share of stock at an agreed upon price at an agreed upon date. This is quite an advantage for the option holder and presents lots of planning opportunities.

This month, many of you have set resolutions, goals, and tasks to achieve. January being the start of a new year is a great time to take stock and make those choices. One choice you should make, is to be certain your 401(k) plan is on automatic increase (sometimes referred to as automatic escalation).

January tends to be a quiet month after the busy holidays of October, November, and December. It’s also the month that marks the start of a new year for the vast majority of people and a great time to focus on ourselves and our goals. Taking some time for introspection and goal setting is a great thing to do.

What a year! This is my last post of the year (no post scheduled for next Tuesday), so it’s a bit of a reflection, and not a specific topic. Yes, we all know it’s been a challenging year and a rollercoaster ride for investors. However, as of this writing, the DJIA is on track to likely turn in a positive return for the year barring any unforeseen large drops in the equities markets between now and December 31. We fear large drops in the market, but hardly anyone is talking about the 12,000 point gain we experienced this year. Let that sink in for a moment… a 12,000 point gain! During a pandemic! For perspective, keep in mind that the Dow didn’t reach, and close above 12,000 points until the year 2012. And this year, we gained over 12,000 points and are now closing over 30,000 on a regular basis.

For new investors, the allure of a hot stock tip from a friend, colleague, or slick salesman can be too much to ignore. This is a common desire on the part of many investors. They want to hit a homerun with a small investment the first time up to bat. Sadly, the outcome is usually different. Too many investors fall prey to the hot stock tip hoping to earn outlandish returns in lieu of solid, on-going financial planning. There are three severe drawbacks to falling prey to the hot stock tip: investors end up with an investment that is not in line with their risk tolerance, it doesn’t fit into their investment plan, or worse, it costs them money they couldn’t afford to lose in the first place. Gambling, anyone? Buying a stock on a tip without consideration for your risk tolerance, your goals, and your ability to possibly lose that money is akin to gambling.

People often question whether hiring a financial planner is worth the money. Studies by Vanguard and Russell Investments and a 2018 article in AARP The Magazine say yes! For example, in AARP The Magazine in the October/November 2018 print edition, AARP provided guidance on selecting a financial planner even if you are not wealthy.

It’s December! That means we are in the homestretch of 2020 and nearly time to close the books on another calendar tax year. Tax planning is really an on-going activity, but year-end is a great time to tackle some of the more mundane tasks related to filing taxes. Here are just a few tips to help you stay on top of your tax situation for 2020. Keep in mind, that to take advantage of many of the deductions mentioned, you need to itemize. With higher standard deductions, fewer people are itemizing these days.

Christmas spending can leave you with a financial hangover! Since Black Friday is not actually on Black Friday this year, but all season long due to COVID-19, I am giving you three tips to keep in mind. Many people struggle with budgeting this time of year and tend to go overboard feeling the need to give to everyone. If your family is not gathering this year due to the pandemic, that feeling of wanting to give may be stronger this year. Keep your goals in mind and your cash flow in check by following Santa’s age-old advice of making a list and checking it twice!

Years ago, checking your credit report and knowing your FICO score was a challenging task and few of us ever bothered. It also took time, because in many cases you had to write to each credit bureau and ask for your report. These days, with the increase of readily available credit, and the constant threat of identity theft, checking your credit report is more vital than ever. With online access to the bureaus and services such as Credit Karma and Credit Sesame, it’s now easier than ever to access and monitor your credit report.

As we approach year-end, some people find themselves with an FSA balance that needs to be used. Are you one of those people? If you have an FSA (Flex Spending Account), usually through your employer, now is the time to check that balance and start planning your spend down. Keep in mind that you have to spend the balance in your FSA within the plan year (by December 31 for many, but this depends on your plan), or you forfeit that money. Your employer may allow you to carry over up to $550 into the new plan year, or may allow you a grace period of up to 2 1/2 extra months. Employers can offer one option, but not both, and they are not required to offer either option.

Every election cycle I get questions about what happens if so-and-so wins. Usually, half the folks out there are worried about the incumbent getting another term, the other half are worried about their candidate losing office and a new candidate being installed. The big area of concern is the presidential election every four years. So, what’s the skinny on how the presidential election affects your finances?

Marriage, jumping the broom, tying the knot, taking the plunge, getting hitched… Whether you are pro, or con, marriage can actually help you improve your finances. Sure, that’s not a very romantic idea, but it is true. Joining forces as an economic unit can be good for your emotional health and your financial wealth.

How much of $24 billion dollars have you missed out on? Are you one of the many participants who is not taking full advantage of your 401(k) plan? On average, one out of every four participants loses about $1,336 (per Financial Engines, 2015) of FREE money from their employer every year. How does this happen? They lose out by not participating in their 401(k) plan, or not participating to the full employer match level. Let me explain.

We often see personal finance blogs and articles telling us all about preparing our estate plan; what documents to have, how to title assets, who’s on the team. What we don’t see as frequently, is information on what happens after we die. What those who survive us need to deal with in the wake of our passing. This post will touch on the very basics for those spouses surviving a loved one. If you are not the spouse, you can still follow these tips but know that your options and benefits will likely be very different.

For many companies, October is open enrollment, also referred to as annual enrollment (not to be confused with Medicare or Healthcare.gov’s open enrollment). Many companies offer a benefits fair this time of year, or in the spring, or both, and allow employees to make changes to their benefits.

I’ve covered the traditional IRA, Roth IRA, and SEP IRA in previous blog posts this month. Finally, it’s time to shed some light on the lesser-known SIMPLE IRA. What is a SIMPLE IRA?

We covered the traditional IRA and the Roth IRA in our previous posts. This week, we’ll take a peek at the SEP IRA. I say a ‘peek’ because there is a lot to this IRA regarding rules, eligibility, and when and how, or if it should be implemented. If you are a candidate, you’ll definitely want to meet with your financial planner to discuss if the SEP IRA is indeed your best option.

This week we’ll examine the Roth IRA. While the traditional IRA is the old timer of IRAs, the Roth IRA is relatively new having been established by the Taxpayer Relief Act of 1997. It gets its name from Senator William Roth, the chief proponent of the Roth IRA. With a Roth IRA, you make post-tax contributions using money that’s already been taxed, therefore, no current tax deduction. There is no RMD requirement at age 72, or during the account owner’s lifetime, and you can continue saving in your Roth IRA if you have earned income. Three are, however, income limits on who can contribute.