The new year brings new goals, resolutions, and even the occasional inflation-adjusted retirement contribution limit. Ah, the things we look forward to! Like it or not, when you plan for your future, your annual 401(k) and IRA contributions are important pieces of achieving your retirement goals. When plans are put in place, your annual contribution limits don’t deviate much from year to year, but those changes are still important to be aware of when they do happen – and it’s your financial advisor’s job to keep you up to date on changes to contribution limits like the ones coming in 2023. When the calendar flips and forces our annual new muscle memorization, there are some important changes taking place – in this article, we will take a look at a few of them and examine a few best practices. New Year, New (contribution limits) Elective Deferrals such as 401(k), 403 (b) and 457 plans are jumping from a $20,500 contribution limit in 2022 to $22,500 next year in 2023 with a $1,000 jump in the catch-up contribution, moving from $6,500 to $7,500. IRA Contribution limits will move from $6,000 to $6,500 with the catch-up contribution remaining the same. Of course, with inflation up 7.7% this year, these adjustments are simply a sign of the times. Best Practices 1 . Spousal IRA If you’re maxing out your IRA, then you might be wondering what happens if you’re married and your spouse doesn’t work. Are they allowed to contribute to an IRA? Technically, no. But if a married couple files a joint tax return, then the working spouse is allowed to contribute up to the max for both their own IRA and their spouse’s IRA, on their behalf. Here’s what it could look like: A working husband maxes out his Roth IRA at $6,500, but the wife stopped working to stay home with the kids. The husband is permitted to contribute an additional $6,500 to the wife’s IRA on her behalf. It is important to be aware that you can max out an IRA to the extent that your earned income is at least equal to the amount of that contribution. 2. Catchup Contribution If you’re 50 years old or older and still working, then you are allowed to make extra contributions to your retirement accounts to make up for lost time or to simply increase your retirement savings in short order. As mentioned above, that’s an additional $7,500 toward a qualified plan, and an extra $1,000 to an IRA in 2023. Those specifics are mentioned above. 3. Order of Operations Our friends at Ramsey Solutions recommend contributing 15% of your earned income toward retirement each year. For employer-sponsored plans, we recommend contributing up to the match (if there is one), then funneling money into a Roth IRA, and then going back to your 401(k) to save the remainder, or into a brokerage (or “bridge”) account. In 2023 each working member of a household can contribute $22,500 to a qualified plan, and $6,500 to an IRA. As Dave likes to say, “Match beats Roth beats Traditional.” The match comes first for a few reasons; if you are saving into the pre-tax side of your 401(k), any amount you contribute lowers your taxable income, taking advantage of the company match gives you free money, and if the account is fully vested, then you can take it with you if you ever leave the company by rolling it over into an IRA. Once you’ve reached the match, the Roth contributions allow you to experience tax-free gains over time since those are after-tax contributions. Be careful though – if your modified adjusted gross income exceeds $153,000 (2023) or $144,000 (2022) as a single person or $228,000 (2023) or $214,000 (2022) as a married couple filing jointly, you aren’t eligible to contribute to a Roth IRA. This leaves the traditional IRA as a nice option, though the growth of that money will be taxed upon withdrawal in retirement. With so much to consider regarding your retirement, it’s important that you talk with a financial advisor who can help you navigate the nuances and make suitable recommendations for your retirement goals. I would be happy to help you with any questions you may have so please feel free to schedule a meeting with me today.

Young people have all the time in the world and they’re bulletproof, as a 23-year-old, I would know. Thinking critically about how their retirement income will be sourced is not always top of mind. This demographic has new spending money of their own and with this culture moving towards immediate gratification, naturally, there is a lot less emphasis on saving and investing, but rather enjoying every dollar earned. There is absolutely nothing wrong with spending the money that many have worked so hard to earn, but being informed on slight changes to implement with your savings and investing could have a drastic effect on a future “nest egg” in retirement. Mistake #1: I am not making enough to save Many times, this demographic has new expenses to learn how to balance along with their new and growing income. This can include rent, utilities, credit card(s), student loans, car payments, etc. (Although, if you do have debt payments – we hope you are working to pay them off using the steps our friends at Ramsey Solutions lays out for us.) Maturing and learning how to spend only what you can afford is a big learning curve for some in this demographic. I am asked many times to help my friends and acquaintances with budgeting. For advice, I have two different categories that I, as an advisor for others, like to create when it comes to my expenses each month. At the end of the month, I pay rent and utilities - things that are necessary for me to live. In the middle of the month, I pay for all of my other expenses. The key with discretionary spending is…if you cannot afford it, do not get it. Here is an example of how someone making $2,500 per month after taxes could easily figure out what they can save at the end of each month: $2,500 Net Income - $1,200 Rent & Utilities - $1,000 Other spending/expenses = $300 per month in savings/investments The trick is to simplify everything and keep track of what everything costs. For those with dual income, and more expensive living costs, it is the same calculation, just with bigger numbers. Just separate it into those 2 categories. We understand that budgeting can be a daunting task so if you want someone to help you get started, our Financial Coach would be more than happy to speak with you! Mistake #2: I can do it on my own I hear this all the time. Many young people and plenty of adults still choose to manage their savings and investing on their own. Many are successful but like anything else, you give up a valuable asset - time. On the other hand, many are not successful. Reading articles about the best types of investments, the best types of stocks, bonds, mutual funds, ETFs, etc, can all be very daunting, and many times, people do not choose wisely. One simple mistake can cost someone thousands of dollars in the short term, and even more in the long term, especially when it comes to taxes, potential gains, and timing the market. It may be worth your time to speak with an advisor to organize what you have, check your spending, and find the right way to start investing to set it and forget it. Mistake #3: Set it and … can I make a withdrawal? An important question someone in this demographic should ask is, “What is my timeline for this money?” This question is essential because it can help you decide where to start saving your money, and how much to save into each “bucket”. Many times, this demographic starts to save for a house, a new car, etc. That is all money needed for the short term. That type of money should be put into a separate bucket of investment - like a non-retirement brokerage account. At the same time, there needs to be considerations with retirement. Many times people will use their 401(k) to invest, and that is fine, but 3-5% generally isn’t enough. Dave Ramsey recommends that after your debt is paid off and one has an ample emergency fund (3-6 months of expenses saved and not invested), they should be saving and investing 15% of their annual income. In these retirement buckets, you have different tax-advantaged accounts. The 401(k) takes pre-tax contributions, so you’re putting off your taxes, while a ROTH will be tax-free in retirement. For investing in both accounts, it is crucial to understand that an investor will not touch this money before 59 ½ years of age. Any withdrawals before then will result in penalties. Knowing your timeline is something regularly overlooked by people ages 22-30, and thinking critically about goals and the future could have a tremendously positive effect on your financial life; especially at this young age. The power of speaking with your advisor As overwhelming as the stock market, timing, capital losses, and more can become, always feel free to use an advisor you know to just ask questions. It is our passion to help people understand these topics. When it comes to the life work of our clients and prospects, no decision is ever taken lightly. No account value is disregarded because all concerns and questions hold such a heavy weight in a time like this. We hope you’ve learned a great deal from this article, and more importantly, reduced some stress from your life today.

One thing I’ve been talking about with clients more this year, especially as the year has progressed and interest rates have increased, is high-yield savings accounts. These are savings or money market accounts that are offered by (usually) online banks. However, your Whitaker-Myers Wealth Managers Financial Advisor can help you if you want to consider the Schwab Money Market Fund, which has a current yield of 3.74% as of 11/22/2022. Online banks have a different business model than your bank that has brick-and-mortar branches where they don’t have physical branches that you can visit. To attract deposits, they offer higher interest rates on their account types (e.g.: checking, savings, CDs, money markets). With rising interest rates this year, the opportunity cost to move a portion of your emergency fund into one of these accounts is greater. If you have $20,000 in high-yield savings and are earning the 10th best rate of 3.50% APY as of 11/18/2022 listed on Investopedia you would earn ~$711 over the course of a year, and even more if you used the Schwab Money Market Fund mentioned above. That comes in handy to have a little extra money for those Christmas gifts. Features to Consider in a High-Yield Savings If you’re looking for a high-yield savings account, the things you want to consider are: Interest Rate – the bank that is offering the best rate at any one point in time will always change depending on a bank’s desire to attract deposits. There are several that are usually near the top: UFB Direct, Bread Savings, Bask Bank, and Vio Bank to name a few FDIC Insured – This ensures that your money is safe if the bank goes out of business, up to the Federal Deposit Insurance Corporation (FDIC) limit of $250,000. Signing up to use an online bank may make you nervous, but it shouldn’t as long as the bank has this insurance. Most if not all of these accounts on financial websites like Investopedia will give you FDIC banks. Minimum Account Balance – most banks have some minimum account size. I recommend finding one that has a $0 or $1 limit in case you need to move the funds out of the account for any reason (emergency!) Maintenance fees – ensure that the bank you use does not have any maintenance fees ATM Access – This can be a less valued feature, especially if you have a checking account with a local bank, but may be helpful to some. Keep Your Primary Bank Relationship I recommend keeping your primary checking/banking relationship for many reasons including: Convenience of a close physical branch in case you need an ATM that is close to you to use at no charge, a cashier’s check for a large transaction, or a notary for signing a document Not having to change all your direct deposit, debits, Roth IRA, or brokerage investment recurring transactions every month Link your Checking and Automate Your Savings I also suggest that clients link their high-yield savings to their primary checking so they can move funds from/to their checking when they have a large expense that needs to be paid. You can link from both banks’ websites and apps so regardless of which you’re using you can transfer funds. You may consider keeping a couple of months of expenses in your primary checking and your remaining cash balance in the high-yield savings. You can even automate your direct deposit to have your sinking funds going into your high-yield account every pay. Say you pay your $5,000 property taxes semi-annually, you spend $3,000 on an annual vacation, and your homeowners and auto insurance of $2,000 is paid quarterly. These costs are $10,000 in total and if you wanted to automate this out of your pay which is bi-weekly, or 26 paychecks a year. You would set up your direct deposit to transfer $384.62 out of every paycheck and then transfer the funds to your checking or pay out of your high-yield account when the expense is due. Any interest that is paid out is taxable and you will receive a 1099-INT form each year from the bank. If you have any questions about using a high-yield savings product and how that fits into your financial plan contact one of our Financial Planners.

Investments in the news It’s been tough to turn on any financial news network lately without hearing headlines regarding the saga at FTX and the antics of their founder Sam Bankman-Fried. If you are unfamiliar with the story, I’ll elaborate. Sam Bankman-Fried founded the crypto exchange FTX in May of 2019, just in time for the coming boom in the popularity of crypto trading. At its peak, it was the 3rd largest crypto exchange and had over a million users. Users would deposit money, buy, sell, and hold bitcoin and other digital assets on the platform. The exchange later ran into credit issues and FTX filed for bankruptcy last week. Turns out Bankman-Fried was running a somewhat sketchy organization. FTX did not do the best job at keeping records of client accounts, and how much cash they had, and ultimately had to file for chapter 11 bankruptcy when their own FTT crypto token lost 80% of its value. They still owe depositors 8 billion dollars. Bankman-Fried was the darling of the industry having Tom Brady, Kim Kardashian, and Larry David as advertisers. They also had their name on the Miami Heat arena. In the bankruptcy filings, it was revealed that expenses for business reimbursements were accepted or rejected by a random manager over a group chat with an emoji. FTX did not have a board, or cash management system, and they did not even keep records of their own employees. Attempts to locate certain employees were unsuccessful, leading to the presumption that some were not even real. It might seem like it is so cool, so hip, or so fun to trade digital made-up tokens in the hopes of getting rich but remember that if you have no idea how a company makes money, they probably are not the best investment. I do not say these things to rub salt in the wounds of investors who opened accounts and had their hard-earned money stolen. But I do think there are some valuable lessons to be learned. Most critical… Sometimes things explode! There are more examples of this from the past XIV was the name of a popular investment in 2018, it was a Credit Suisse product that had an incredible run. During an 8-year run, it went from $10 to $130. It was not a stock; it was an exchange-traded product that generated returns based on market volatility. Long story short, it would produce outsized returns as long as no volatility hit the markets. Well, any seasoned investor knows that volatility is part of investing. February 2018 marked the end of XIV’s run. Markets fell almost 10% in a matter of days and XIV was down 80% in a day. It was delisted days later, and lawsuits followed. Mainly because Credit Suisse didn’t make it clear enough that this wasn’t a long-term investment vehicle. The following is found in the XIV prospectus “In almost any potential scenario the Closing Indicative Value (as defined below) of your ETNs is likely to be close to zero after 20 years.” Other examples include Lehman Brothers, Enron, Theranos, and my personal favorite Nikola. Nikola was founded by Trevor Milton. Milton claimed that Nikola had developed a semi-truck that ran on hydrogen. Instead of making a semi-truck that ran on hydrogen, Milton just recorded one of his nonfunctioning, futuristic-looking trucks rolling down a gradual slope and released the footage to the investment world. The stock was worth almost $66 in 2020, now it is worth just $2.53. How do you know what investments are right for you? I do not want to give the impression that the investment universe is full of nothing but con artists. That is not true at all, it is almost exclusively not. Investing is a marathon, not a sprint. Most successful retirees have spent decades being “Boring.” By "boring investing" I am referring to investing consistently, in well-diversified portfolios of stocks that have real business models, that generate real cash flow, and return that cash to shareholders in the form of dividends. It is almost as though the recipe is too simple so we come up with ways to make it more complex. It is common for people to want to try to time the market, put too much into an area that they feel is poised for outsized growth, or decide not to get started because they feel overwhelmed by the task of saving for their future. I encourage everyone, wherever they are on their financial journey, to be "boring", be consistent, and have a long-term plan and path to get to their financial goal. If you would like help creating a financial plan to achieve your retirement goals, feel free to reach out to one of our Financial Advisors and we would be happy to help.

With the Christmas Season rapidly approaching and inflation at an all-time high you may have already thought about your shopping budget. If you haven’t already allocated your Christmas dollars, then stop what you’re doing and open an excel document (or this Budgeting App from our friends at Ramsey Solutions.) How much to spend on Christmas? According to data from National Retail Federation, Americans spend an average of $997.73 on gifts and Holiday items each Christmas season. That figure comes in just under the median pre-tax weekly salary of $1,001. It may not be surprising that the average American spends 25% of their December income on Christmas gifts and decorations, but if you’re honest, it’s probably unplanned overspending that’s got you feeling a little stressed out as the calendar marches on toward December. The recommended maximum for Christmas spending is 1% of your annual salary. Following the above example, if you make about $50,000 a year, then you should spend no more than $500 on Christmas expenses this year. As proponents of Dave Ramsey’s debt-free model of living, we at Whitaker Myers want all our clients to live financially independent lives. An important piece of that is getting through the Christmas season without taking on more consumer debt by setting a budget. Here are a few tips to help you avoid the post-Christmas blues and a big lump of buyer’s remorse. Make a Budget and Stick to it This might seem like an obvious one, but if you haven’t set a budget then you will likely spend more than you want to (or should) on Christmas. If you have a generous heart and enjoy giving gifts to loved ones, then you are even more inclined to overspend, even if it’s out of the kindness of your heart. Start with the dollar amount you’d like to allocate for spending. Once you’ve determined how much you’re comfortable spending, make a list of everyone for whom you plan to buy gifts. Budget a specific amount per person and stick to it. If you don’t like giving nick-nacks then consider gifting experiences or making something that will save you some money, without sacrificing thoughtfulness. Remember the 1% rule when making your budget. This spreadsheet is a great way to make a plan for who you need to shop for and how much you would like to spend on them. Putting a dollar amount next to their name before you even start shopping helps you be more intentional with your holiday spending and shopping. Save all Year It might be too late for this one in 2022, but it’s never too early to start planning for 2023. You’ll be more equipped for staying on a budget if you have the funds already earmarked for Christmas. You can start a separate Christmas savings account which would be considered a sinking fund. We have multiple articles about sinking funds including one that explains what they are and one that discusses if they should be invested. Don’t forget that you can even use a brokerage account for short-term savings goals. One of our financial advisors can help you allocate that money into wise investments for short-term objectives like saving for Christmas (or buying a home, car, appliance, etc.) Don’t Overindulge Those of you who are familiar with Dave Ramsey know that baby step two is all about getting out of debt. He advises people to attack their debt with “Gazelle intensity,” sacrificing in the short term to get rid of debt and live financially independent lives. At the core of this step is the avoidance of overindulgence. This is a major key to saving as well as paying off debt. If you are able to make more meals at home, watch old DVDs instead of paying for that subscription, and wear that old Christmas turtleneck in lieu of springing for a new cardigan, then you will be well on your way to freeing up some cash for your Christmas budget. It’s important to be critical with your spending, always asking yourself, “do I need this?” The answer is probably “no.” If you struggle with budgeting, talking with a financial coach might be the right move for you. At Whitaker-Myers, we strive to help our clients get debt-free and start living their lives financially independently. Among our many services is financial coaching. If you want to talk to a financial coach about your budget, reach out to us today.

Have you thought of asking for or giving a gift card recently? “What would you like for your birthday?” Or how about, “Is there anything you would like for Christmas?” As I have gotten older, I have found these questions to be harder to answer over time. As a working adult, a lot of the time, I either budget when I know I want or need something, or I purchase it for myself because I have the funds and can do so. Gone are the days of the “Wish Book” where you spent hours and maybe even some days flipping through the pages starring, circling, or initialing the various items so your parents, I mean Santa, could bring you these valued treasures. So as an adult, what are some beneficial items to ask for when you are posed with these questions? My answer has quickly become “GIFT CARDS!” Benefits of Gift Cards I have found gift cards to become the guilt-free way to splurge and treat yourself. Especially as a mama, spending money on yourself for a coffee, a new shirt – just because, or even going and getting your hair cut or colored can throw “mom guilt” on you faster than a comment someone made on Facebook. I remember growing up asking my mom what she wanted for her birthday and she always came back with a nail gift card, to get her hair done, etc. And I remember thinking, “Really?”, but as a mom now, I 100% get it. And even not being a mom, if you are trying to stay budget conscious, someone giving you “money” to spend on yourself, when you want to treat yourself, is a great way to stay within budget. They are fast for someone to pick up, and they don’t have to spend hours trying to think of something to get you, or roaming stores looking for something that “looked like you”. Gift cards are also easy to mail! Slip them into a card, add a stamp, and you are good to go! Stigmas that can be associated with gift cards Of course, with every good, there is a bad side to things depending on how you look at it. Some people feel it is the “lazy way” to gift. Or that you did not put much thought or effort into that gift. And I can understand where this thought can come from, however, if it is what the person is asking for, you are actually giving them what they want. And in my opinion, anytime you give someone a gift, there was thought behind it. The fact that you thought enough of that person to go out and get them something, meaning that you spent your own money on them, means you do care about them. As my grandmother used to always say, a gift card spends the same way as if I were to spend it for you. This way I know you are getting something you truly want without putting pressure on you at the moment to think of things. Restaurants, Fast Food, and Shopping cards all help you save on your budget! Again, if you are trying to be budget conscious, and can’t think of anything that you want or need for your birthday/Christmas gift, think of places you like to eat at, grab food for lunch during the work week, roam the store smelling candles, or your favorite coffee place. Those gift cards can let you “treat” yourself to things in your everyday budget without dipping into your budget! I don’t have a coffee line in my budget. And a lot of the time, the only way I get it out and about is when I have a gift card for this exact purpose. Mainly because I don’t want to spend my budgeted money on coffee here and there, I’d rather save that $25 (or whatever you budget for it) for something else and apply that to my budget elsewhere. I have learned to appreciate having a Subway or Jimmy Johns card in my wallet in case I forget to pack a lunch, don’t like the lunch I packed in the morning when I went to go eat it later in the day, or when I am out running errands, I can run into one of those places and not feel guilty for grabbing a quick lunch. I know for some of our coaching clients we have suggested taking cash out to use for things like this so you have a “when I am out of cash for this specific line item, I am out” mentality, and this could be very similar to that philosophy. Think outside of the box for your gift cards Don’t limit yourself to just fast food, restaurants, or shopping places to ask for, or buy gift cards for someone. Personally, I have asked for gift cards to “pamper” myself with for my birthday. So, if I want to go get my nails or a pedicure one day, I don’t feel bad making an appointment. Or I have asked for gift cards to the place I get my hair done. And for the ultimate pampering experience, ask for that massage! I just cashed in on one of my birthday massages I got last year for a prenatal massage about a month before my due date, and I could not have been more excited about that appointment! For my husband, I have gifted him a glass-blowing experience and a session where you make your own pottery mug. Super fun experiences we get to have together, and a memento he/we get to keep after our outing. And in turn, he has gifted me a card to a canvas site where I can download family photos to have printed off to hang in our house. So next time you are asked, “What would you like for….” Answer with a gift card! And if you want to be intentional with what gift card someone gets you, put some thought into it and see what you would truly appreciate. This way you get what you are wanting in the end, and they feel they are getting you something you truly want too. Or if you are getting one for someone else, again, think of how they spend their cash, or how they like to “treat” themselves, and treat them to their next experience!

Some of the greatest factors as to why a market declines is because the market isn’t sure of what is going to happen. When consumers, businesses, and the government all have little to no idea what will take place during a midterm election, people tend to hold back until that question is answered. People do this by selling in the market, consumers do this by holding cash, and the government raises rates to have more money in their pocket for what is to come. Historically post-midterm election Generally, the market tends to improve once the question is answered. Right now the question is will the Democratic Party continue to have control of the government, or will the republican party take the majority? Despite what your opinions are on the current administration, and administrations of the past, once the midterm question is answered, it typically bodes extremely well for the consumer with their money invested in the market. See the chart HERE that proves this. Pandemonium or peace? This year has been a tumultuous year when it comes to client-advisor relationships. It is unacceptable if an advisor cannot adequately explain to a client why they are seeing losses in their account. From fears of inflation, immigration, the war in Ukraine, there are a number of reasons why the market is volatile. As discussed in the previous article, the market is a roller coaster, and you want to be the one enjoying the full ride, right? When it comes to things “that have never happened before”, all that does is create more buying opportunities in the market. Buy low, sell high, etc. Whether the media tells you it is pandemonium, or it is peace, that should not affect your attitude. Midterms will be able to answer some questions, which will then lead to further action that may or may not help your portfolio. At the end of the day, as long as there is no global thermonuclear war with trees on fire in your backyard, I’d say everything will be alright. Make your voice heard As long as you cast your vote, you really cannot be all that worried. You’ve done your part in our constitutional republic. What happens next is not always in our control. Let your advisors talk you through the complications of the markets, and how administrations, presidents, and congress actually impact your portfolio. Sometimes a bad decision from your perspective can lead to opportunities in the market. For example, rising interest rates may be awful for someone who sells homes for a living, but at the same time, may be perfect for that same person, because they are extremely sensitive to risk in the market. Higher interest rates = higher return on government securities (treasuries). So, we could invest them into those securities. That is just one example. This midterm election will prove to be consequential for all Americans, and we hope that whatever happens, the burden of seeing money vanish from your accounts, and the pain of seeing rising prices will lessen for everyone. The power of speaking with your advisor As overwhelming as the stock market, timing, capital losses, and more can become, always feel free to use an advisor you know to just ask questions. It is our passion to help people understand these topics. When it comes to the life work of our clients and prospects, no decision is ever taken lightly. No account value is disregarded because all concerns and questions hold such a heavyweight in a time like this. We hope you’ve learned a great deal from this article, and more importantly, reduced some stress from your life today. Please feel free to use Drew Hodgson to begin asking your questions. There are no dumb questions and no wasted time if you choose to speak with him.

The importance of meal planning As important as an exercise program is, the same importance is placed on meal planning, both if you’re trying to lose weight, and cut back on your grocery budget. Yes, meal planning isn’t for just trying to shred some pounds and create a healthy lifestyle. Meal planning can help “shed” dollars out of your grocery budget, and also create healthy lifestyle changes with money. How can meal planning help me “shed” both in and out of the gym? Meal planning is also one of the main first steps when it comes to grocery shopping. By laying out your meals for the upcoming week, it helps you create the ingredients list you need to get for your next grocery haul, hopefully eliminating impulse buys because “you may need it this week for dinner”. It also helps you from wasting food before it goes bad because you are not purchasing things and not using them before they expire…or start to grow mold. And when you meal plan, you can decide on healthier options because you are prepping for them earlier in the week. You know what meat may need to come out of the freezer ahead of time to thaw, and if you work full time, helps you manage your time when you get home so you know how to prepare your dinner according to your schedule – helping you to avoid the very tempting chicken tender and tater-tot fast dinner option. You’re not only able to predict your calorie intake, but how much you are going to be spending on your groceries as well. How you prep for your meal planning can matter One week at a time Don’t get yourself confused or stressed out by trying to plan more than a week out. As the saying goes “take it day by day”, do the same with your meal planning and go a week at a time. Lay your days out however you like based on when you shop. If you have known plans for a certain day, be sure to add those days into your meal plan, “i.e., Sunday – Birthday party at mom’s house, Thursday – dinner out with the girls”. This allows you to know you can either skip this day from planning or if you’re bringing a side, know you just need to get those ingredients for that day. See where you can “double dip” When creating your meal plan, see what other items you can use from a previous meal. Are there tomatoes, lettuce, or other perishable items that you can use from one meal to the next for ingredients? Or even leftover protein to be used in another way other than the main course? I have a friend who meal plans like a pro. I watched her in action one time and here is an example of how she planned her week reusing both side and main entrée items for multiple meals: Monday – Pork Roast with onions, carrots, and potatoes Tuesday – Quesadilla Hamburgers and homemade fries Use leftover potatoes to make fries Wednesday – Kielbasa and sauteed cabbage and noodles with onions Used leftover onions Thursday – Pulled pork tacos with cabbage slaw Used the leftover pork, tortilla shells, and cabbage Friday – Pasta with Bolognese sauce and a side salad Used the leftover browned ground beef and noodles Don’t overcomplicate things No one said you had to create meals worth of Gordon Ramsey standards, or that they had to be Pinterest masterpieces. Keep your meals basic. Especially at first until you get the hang of things. You can always start to expand once you feel like you have the hang of things. Your goal with meal planning is to shop wisely, not prove you’re a world-class chef. Create “Theme Days” If you’re really stuck on how to get started, designate your days of the week to a theme day! To name a few: Soup Sunday, Taco Tuesday, Fish Friday. You don’t always have to stick to alliteration too. Make one night be “create your own personal pan pizza” (twist, how can you make it healthy with your ingredients), another night- make it a bar night: burger bar, nacho bar, baked potato bar, salad bar. And then there is the ever-popular and stands the test of time, themed dinner night – spaghetti night. Lastly, don’t be afraid to make “Leftover Night” a themed dinner option. We had PLENTY of these kinds of nights growing up, and something my husband and I do pretty regularly to help with food waste and fridge cleanout. Compile your plan into your list After the meal planning work is done, you need to create your grocery list to have the items needed for the week. For more ideas and suggestions on how to go about creating and organizing your grocery list, check out The Grocery Store Game – How to prep the right way, Part I – The Grocery List. Meal Planning is a Win-Win Whether you are trying to cut calories, or how much you are spending on groceries, meal planning is a necessity to accomplish either of these goals. But meal planning cannot be a one-time thing, or you will not be successful. It has to be consistent and needs to become a lifestyle change. If you make the changes and start implementing this into your weekly routine, I promise you will not only see the pounds start to drop (of course this will depend on your meal plan!), but you will also see your grocery budget drop because you will be in control of how you spend. If you are new to meal planning, or have been meal planning for a while and want to get better at it, try some of these tips out and see how you can “shed” some pounds and dollars! And if you need help finding ways to “shed” some dollars in your budget, schedule a meeting with our financial coach, Lindsey Curry today!

What happens when I sell a stock or bond that has increased in value? Have you been eyeing a new vehicle, rental property, or any mid-to-large expense but haven’t pulled the trigger because you aren’t quite sure what the tax consequences will be? If your plan is to purchase an item with cash or check then you don’t have to worry about tax consequences; but if your plan is to purchase an item using money out of your brokerage account, then you might want to read this article. What is a Capital Gain? According to Investopedia, a capital gain refers to the increase in the value of a capital asset when it is sold. Put in layman’s terms, a capital gain is when you sell something for more than what you purchased it for. So, if you bought a used car for $5,000 in 2019 and then sold it for $8,000 in 2021, you would technically have a $3,000 capital gain. This is the same in the investment world. If you bought into a mutual fund, stock, bond, ETF, etc. for $10/share in 2019 and then sold it for $15/share in 2021, you would have $5/share in capital gains that you would be responsible to pay. How are Capital Gains Taxed? In the example we used above, you held the asset for more than one year, so you would be responsible to pay long-term capital gains on the sale of the asset. See the charts below for 2022 and 2023 long-term capital gains rates based on filing status and taxable income. What if I sell an asset within a year of owning it? Keeping with the same example we used above, what would happen if you bought the asset in 2019 and then sold the asset in 2019? Great question! Since you held the asset for less than one year, you would be responsible to pay short-term capital gains. Short-term capital gains are taxed as ordinary income. See the chart below for short-term capital gains rates based on filing status and taxable income for 2022. Short-term Capital Gains Tax Rates for 2023 35% for incomes over $231,250 ($462,500 for married couples filing jointly) 32% for incomes over $182,100 ($364,200 for married couples filing jointly) 24% for incomes over $95,375 ($190,750 for married couples filing jointly) 22% for incomes over $44,725 ($89,450 for married couples filing jointly) 12% for incomes over $11,000 ($22,000 for married couples filing jointly) The lowest rate is 10% for the incomes of single individuals with incomes of $11,000 or less ($22,000 for married couples filing jointly). This article is not intended to be used as tax advice but rather more for educational purposes. If you have any specific questions about the taxation of capital gains or are looking for tax advice, please reach out to your local SmartVestor Pro or contact our CPA at Whitaker-Myers, Kage Rush.

You work hard to earn a living, but if you’re new to investing you might be wondering how exactly your money can go to work for you. At Whitaker-Myers Wealth Managers, we take a holistic approach to financial planning. Measuring risk is a critical step in establishing your financial goals. In this article, we’ll talk about the different types of risk to be aware of with regard to your investments. Keeping the Cash It can be a common misnomer that cash (or simply a savings account) is the best way to protect your money from the uncertainty of the stock market. While cash can be a smart strategy, it all depends on your objectives. If you are young, in good health, and have a long-term time horizon, then keeping your money in cash is not your best bet. The biggest reason for this is a word we’ve heard at nauseum in 2022: inflation. Keeping your money in cash not only strips it of its potential for growth, but it leaves it subject to inflation risk. As your money sits in the bank, it slowly loses purchasing power over time. As the monetary unit drops in value, your dollar today buys less as time goes on. Think about the soda fountains of the 1940s where a bottle of Coke cost a nickel. Now, that same soda would cost you as much as $1.99. To be clear, regardless of your situation it’s important to have an emergency fund and take advantage of a savings and checking account. Some banks even offer favorable interest rates for certain account balances. If you are close to retirement, the preservation of capital might be of utmost importance to you. In that case, cash and/or cash equivalents may be right for you. Money market funds, bank certificates of deposits (CDs), and cash might be wise for you – which is why it’s important to talk to a financial advisor about your objectives and risk tolerance. Letting your money work Equities, or as most people know them, stocks, have the potential for growth, as well as loss. Equities are shares of a company, and by buying those shares you become a partial owner of a company. Depending on the type of company, you could even receive quarterly payments called dividends, for simply maintaining your stake in the company. Because you are investing in a company, you are taking on what’s known as “business risk.” Whether it’s a new company, a company in poor financial shape, or one going through a reorganization, there is the chance that your shares could drop or experience a complete loss in value (If the company folds). This is not meant to scare you away from equities, but rather, encourage diversification. Owning equities can be a great way to participate in the growth of companies, but owning too large a percentage of one company, relative to your portfolio, should be avoided. A great way to own equities, and remain diversified is to own mutual fund shares. A mutual fund is a security that invests across several publicly traded companies in order to minimize an individual investor’s risk. As our friend Dave Ramsey likes to say, “Money is like manure: Pile it up and it stinks, spread it around and it'll grow stuff.” If you want to grow your money over the long term, then diversification is your best friend. There are other ways to diversify using equities, like investing in Exchange Traded Funds (ETFs). Talk to an advisor about what might be right for you. Somewhere in Between Goldilocks wasn’t wrong. If you are close to retirement or have a greater need for liquidity, then a portfolio heavily weighted in equities might not be the best for you, nor does it really allow you the time to let your money work. Cash and cash equivalents may be among the safest of investments, but they provide little to no return on your investment. Fixed income might be the most suitable for you if you‘re looking to strike the balance between safety and return. Fixed income like bonds and U.S. treasuries are debt obligations that make you the lender and the issuer the debtor. As an incentive, like on any loan, the lender gets to collect interest payments, and eventually a return of the principal. The higher the interest rate, the higher the semi-annual payment you receive as the owner of the debt. In an economic environment like the one in which we are in 2022, this type of security can pay handsomely. Government-backed securities like U.S. treasuries are backed by the “full faith and credit” of the U.S. government, which means, you can expect you will receive your principal back when the bond matures, or when it is called in early. Of course, every security has some type of risk – even the safest ones. When a bond gets called it means you miss out on future interest payments. Usually, this means that interest rates have come down, and the debtor is looking to sell bonds at a higher price, and pay less interest. If a bond has call protection, or simply no call feature attached to it, then it is going to last until maturity. This means that your money (principal) is locked up until the maturity date, subjecting it to liquidity risk. If you need money in six months to purchase a home, then it would be unwise to purchase debt securities with maturities of nine months. An alternative is to invest in fixed-income mutual funds or ETFs, which provide the liquidity of equity securities. Being aware of your risks and investment constraints is essential to developing both your investment strategy and overall financial plan. Your needs are unique to you and at Whitaker-Myers, we listen to those needs and make plans that suit our clients. If you’d like to talk about your financial objectives, schedule a meeting with me today.

Mistakes easily made with the grocery store. Have you ever run into the grocery store for “just a few things” and ended up with “a few things too many”? Or have you gone in with items in mind, but then just walked around aimlessly up and down each aisle and ended up with way more than you were expecting? What about when you log on for your click-and-go order and just start clicking on the items they “suggest” for you from either previous orders or because “others also bought” with items? The thing is, we are all guilty of this. And sadly, with how the price of groceries has increased over the last year, it is something that needs to be discussed, and better habits started to be formed. The importance of a grocery list One of the main reasons for creating a grocery list is so you know what items you absolutely need. Whether it be because you ran out of something, you need it as a specific item in a recipe, or because it is on the menu for this week’s meal plan, having specific items outlined is key. The other benefit is that you are not guessing as to what you need, leading you to possibly overspend on duplicate items or not-needed items. And it allows you to have less frequent trips (or virtual clicks). Which has been proven that the more store trips you make, the more you are to make impulse purchases. Meaning, more opportunities to break your grocery budget. How you organize your grocery list can matter There are several ways you can go about organizing your grocery list. The trick is making it efficient so that when you shop, you don’t wonder. Because if you wonder, that’s when unnecessary spending can happen. Meal Plan My tried and true suggestion is to start with your meal plan for the week. Go through what you will need to prepare each meal. Take Inventory Know what you have, and don’t have before going to the grocery store. As annoying as it may seem, standing in front of your fridge and pantry before making your list will help you know what you need to add to your list. However, this can be a double edge sword. It can make you realize you don’t have something, that maybe you don’t necessarily need (i.e., does not fit in with your meal plan for the week and could risk going bad before being used/eaten). A trick my husband and I have done to try and lessen our standing in front of the pantry or fridge and avoid “over needing” when writing out our grocery list, is a handy dandy magnetic notepad. We keep this on our fridge, and if we run out of something we use regularly (milk, eggs, butter, etc.), we can add it at the moment. Map out the store Think through the layout of your store while creating your list. Start with the back and work your way forward. Making a “map” of which aisles you need to hit to grab items on your list helps eliminate that “wondering” I’ve been talking about. You go in, go to the area you need to go to, and grab the items needed, all while working your way back to the front near the cash registers. Categorize your list This is helpful when you know your store layout. You can put all your dairy together in one section, then list all your grains/bread needed, and produce can be paired together… you kind of get the picture here. Hopefully categorizing your items will help you not forget something in that area, making you circle back to a previous area. Know your amounts Knowing how many items or amounts of an item you need is important too, especially if you are trying to copy a recipe. The last thing you want to do is get home from the store (or pick your grocery haul up from your online order) and realize you needed an extra cup of an ingredient, or one whole item to complete your meal/recipe. This not only helps you make the recipe/meal correctly and proportionally, but it also reduces the waste of ingredients. You’re not over-guessing because you don’t want to short-change yourself on an ingredient, but you can’t find a way to use said ingredient later before it goes bad because you bought too much of it. Shop Store Brand vs Name Brand Remember, the majority of the time, store-brand items are a fraction of the price when comes to name-brand items. And typically, you will not find a difference between the two besides the costs. And a little unknown fact, some items are the same exact thing, just packaged in either name brand or store brand! Step out of your comfort zone next shopping trip and try the store brand of a name-brand item. See what your thoughts are. If you hate it, all you have to do is deal with it until that item runs out. And if you don’t notice a difference, you could end up saving yourself large dollar amounts in the end. Let your grocery list help you Outside of making sure you have the right ingredients, and the right amount of ingredients, your grocery list is hopefully going to help you eliminate extra strolls around the store, or stop you from buying unnecessary purchases. When looking at coaching clients’ budgets, the grocery budget is one of the first places we suggest to start cutting back, especially if you express to us during meetings that you don’t meal plan, or make regular grocery lists. Let your grocery list help you by not overspending. It’s a great way to help you budget, especially if you are on a tight budget, and trying to find ways to cut your budget. If you need help tailoring your budget or creating one, schedule a meeting with our Financial Coach, Lindsey Curry. She can help review your existing budget and help you find ways to “trim the fat”, or if you’re just starting, show you helpful tips.

How do I save for my kid’s future college expenses? As Advisors, this is a common question that clients have for us. There are many ways to save for your child's future including 529s, ESAs, and UTMAs. For the purpose of this article, we will discuss what a 529 is as well as the advantages and disadvantages of using it to save for college expenses. A 529 is a tax-advantaged savings plan which means the interest that is accumulated within the account grows tax-deferred and no income taxes are paid on the growth if the money is used for qualified educational expenses (please see below for a list of qualified expenses). The other tax advantage of this account is that the person responsible for funding the account may receive a deduction from their state taxes. When the 529 was originally developed, it was for higher education only. This definition has since expanded and can now go towards K-12 schooling along with apprenticeship programs. The benefit of using a 529 to pay for grades K-12 If you live in a state that offers a state deduction, you can fund the 529, get the tax deduction, and use those funds to pay for your child's private school tuition. If we were to take Ohio for example, Ohio allows an individual to deduct $4,000 per beneficiary per year. If you had two children and maximized the contributions that would be $8,000 you can deduct from your state income taxes. Ohio’s state income tax ranges from 2.765% - 3.990%. If you fell in the middle of that range, that would be 3.3775%. This saves you approximately $302 per year. Take that across the span of a child’s 13 years in school and you have a savings of almost $4,000. Our President and Chief Investment Officer, John-Mark Young did a very informational video explaining how to get a tax benefit (if your state offers it) for using the 529 to pay for private school tuition for grades K-12. You can watch that video HERE. Types of 529 plans Educational Savings Plans This is an account where the account holder contributes money to a plan and the money is then invested in the stock or bond market. Then, when the child starts college or a trade school, they can use the funds from the 529 to pay for their education. Prepaid Tuition Plans This is where an account holder can lock in current tuition rates for their future student. Advantages of a 529 High contribution limits This is helpful since the average cost of tuition for a 4-year public university is over $25,000/year and over $100,000 for a 4-year bachelor’s degree. Flexible Plan Location: you can choose to have either an educational savings plan that is invested or prepaid college. Easy to open and maintain Tax-deferred growth No income tax on the growth as long as the money is used for qualified expenses State Tax deductions Can be passed from one child to another Disadvantages of a 529 Limited investment options Fees vary per state Restrictions with changing plans Must be used for education (you pay a 10% penalty and taxes if you use the money in a 529 for non-qualified expenses) Qualified Expenses: College, graduate, or vocational school tuition and fees Elementary or secondary school (K-12) tuition and fees Books and school supplies Student loan payments (up to $10,000) Off-campus housing Campus food and meal plans Computers, Internet, and software used for schoolwork (student attendance required) Special needs and accessibility equipment for students