Happy New Year, time to get your financial plan in place!

With the New Year upon us, it is a great time to review your financial plans. Some great areas to look at are:

My new year will start out by dedicating a deposit to a new high yield savings account and funneling part of that deposit into a taxable investment account. The reason I am adding a taxable account to our plan is to fill in the gap between short term savings and long term retirement goals. This middle-stage bucket of funds will allow some growth and allow us to use some of the dividends that we receive. A key difference between my taxable account and my “tax advantaged” accounts are as follows:

  • Taxable account will require me to pay taxes on realized gains and losses each year.
  • Taxable account will not be penalized if I choose to use those funds since they are structured in a way that allows me to take profits at any time.
  • I usually DRIP funds into my retirement account, but the taxable account will not use DRIP since we may choose to funnel those dividends into other opportunities or spend them for some entertainment.
  • Will open me up to funds that I would ordinarily avoid in my Roth. For example, I can now invest in Muni CEF’s if they appear attractive and get to take advantage of the tax free nature of these funds. This would be a great post down the road. Hmm!!!
  • The Taxable account will allow us to make gains above inflation for big ticket items like a new roof, solar or future car purchase. That new Toyota Hybrid Sienna and Subaru Ascent look mighty fine! For now, we will continue to drive ours into the ground. Grandpa SNH recently bought a Honda CRV will all of the bells and whistles and seems to be very happy with it.

I may also look at sending back our TV box since our Roku provides the same functionality with our cable subscription. Doing so would save about $90 a year. At the end of the year, we may also decide to remove cable altogether and go back to antenna services since we seem to watch a relatively small number of channels and programs. We were cord cutters for a long time in Georgia and decided to trial cable again in Florida to see if there was a large benefit. I don’t currently think we get a good ROI for the service. Again, it is up to evaluation after a full year cycle with it.

Have a happy new year! Don’t forget to review your New Years financial plan. Keep building and growing.

Mr. SNH

Leave a Reply

Your email address will not be published.