Self Improvement

Mandy Kloppers

Smart Financial Decisions for a Stable Future

Preparing for your financial future takes time and effort. It is not easy to save, and it is not easy to plan for the unexpected. The necessary items are hard to take care of when they change in price from week to week. Life is getting more expensive and difficult to plan for. There are some things you should consider when dividing up that paycheck each week. Doing this will not only help you save but help you prepare for anything that might come up in your life. 

Money Market 

A money market account is a good place to start investing in stocks, ETFs, bonds, and cryptocurrency. A money market account, if maintained and balanced between securities, will provide the holder with a good portion of the money that will grow on its own. The growth will come in the form of dividends if the company pays out every year or in the sale of the security at the right time for additional profit. It will also help you invest in new and emerging stocks such as marijuana stocks

You can set one of these accounts up through one of the many brokerages. Online contact is one way to start an account or directly through the phone. You can also visit a brick and mortar establishment. The problem with a lot of the traditional brokerages is a large starting balance is required to open most types of accounts. 

There are a couple of brokerage accounts that do not require starting balance beyond the small initial investment. That initial investment will go to buying the first stocks, ETFs, or mutual funds to get the account started. It requires careful research before starting these accounts so you can know what the trade fees are as well as any additional penalties for multiple purchases or sales in a month, quarter, or year. 

Retirement Accounts 

Retirement accounts are a crucial piece of your financial portfolio and you should start as early as possible. One day, you will want to stop working or change your retirement situations. There are multiple ways to do this effectively. You should consider the following: 

  • IRA 

An IRA is an account set up for retirement where you can contribute a select amount of money every year, and the custodian puts it into securities selected when you first opened the account. You can either contribute $6,000 a year if you are under the age of 50 or $6,500 a year if you are over the age of 50. 

  • Traditional IRAs 

A traditional IRA is one that has deferred taxes until you reach retirement age and start drawing from it. The benefit of this kind of account is the possibility of falling into a lower tax bracket when you retire. 

  • Roth IRA 

A Roth IRA is like a traditional IRA, except taxes come out as the money goes in. By taking the taxes out when the money goes in, the money you withdraw when you retire is tax-free. 

General Savings 

Through all your financial activities, you should always keep savings. Having savings means you have a stash of money to draw from to make required purchases that do not require you save up a ton of money. Keeping it separate also indicates that it is not for general use. 

Emergency Account 

Everyone needs an emergency account. You don’t need to put much money into every month, but whatever you can spare will help you later when trouble strikes and you need money now. The money in an emergency account saves for the unexpected life problems, like suddenly needing to buy new tires because you got a nail in one or unexpected health emergencies that take you to the hospital. 

Health Savings Account 

Putting money into a health savings account is a good way to take care of your health when you need to. A health savings account is for the things you need to keep you healthy and active. It can help pay for those new prescription glasses your health insurance won’t buy or a visit to the dentist because your insurance doesn’t cover a visit to the dentist. 

Planning for the future will put you in the position of controlling your life before and after you stop working. It is about savings and careful investments. You will benefit in the long run by your prudence and careful planning. 

 Photo by Josh Appel on Unsplash