A Health Savings Account (HSA) is like a savings plan where you can stash money you make, before you pay taxes on it. Then use that money for eligible healthcare expenses, including deductibles, co-pays, dental, vision and other medical expenses. Like a Flexible Spending Account (FSA), it can help ease the burden of high out-of-pocket costs and lowers your taxable income, which could lead to a lower tax bill.
You can contribute up to $3,500 to an HSA if you have single coverage or up to $7,000 for family coverage in 2019 If you’re 55 or older, you can kick in another $1,000.
When you open an HSA—either through your work-sponsored health insurance plan or at a bank or financial institution—you’ll typically get a debit card to access your funds. Once money’s in your account, it’s yours for good: Your balance rolls over from year to year, and the account is portable. That means if you leave your job, the account follows you. (But note that if you use the money on non-qualified medical purchases, you’ll be expected to pay income taxes.) Another benefit of HSA accounts is that the money can be invested. The money grows, and can be distributed, totally tax-free, IF . . .
There’s one big catch to all these perks: To sign up for an HSA, you must be enrolled in a high-deductible health plan. As you can probably guess, this type of health insurance policy has a high deductible and out-of-pocket costs—which is why an HSA can be so valuable.
In 2019, a health plan is considered "high-deductible" IF
Should I Open an HSA?
Many people who graduated years ago probably wish they could go back and do a few things over. Most financial challenges can be avoided by doing things in a careful way. Adopting healthy finance habits can make your future a lot easier and more enjoyable.
On the other hand, unhealthy financial habits can create challenges that take years of work to fully recover. So, get your adulthood started on a positive financial path from the beginning.
Consider incorporating these tips into your financial life as an adult:
Avoid the many pitfalls of developing poor personal finance habits. Mistakes made at this point in your life are recoverable, but the entire experience can still be extremely challenging.
Good habits ensure good outcomes. Your financial future can be great, if you’re willing to put a smart plan into action right now. There’s no reason to repeat the mistakes of others.
Implement these 10 tips and you’ll find your financial life will have a minimal amount of drama and challenges. Avoiding mistakes is a huge part of being successful.
Keeping You From Building Wealth
Do you often face financial challenges? Has your wealth not seem to grow as much as you expected? You might be keeping yourself from building wealth with habits you didn’t even realize were contributing to your situation. Dropping bad financial habits is an effective first step toward enhancing your security and financial future.
Do you have any of these bad financial habits:
1. Failure to create an adequate emergency fund. There’s no better prevention for financial disaster than an emergency fund that covers at least 3 months of living expenses. A short period of unemployment or a single, unexpected, major bill can be financially devastating. It will happen. Avoid believing it’s a matter of “if it ever happens.”
2. Habitually paying bills late. Most consumers believe that credit card companies make most of their money from the high interest rates they charge. This isn’t true. It’s actually the late fees they collect. Nearly every bill you pay each month becomes more expensive if you’re late, even by a single day.
3. Inappropriate use of credit cards. Using credit cards to purchase unnecessary items you can’t afford is the worst use. Putting charges on your cards up to their limits and then only paying the minimum due will put you in a precarious position, lower your credit score, and keep you in debt for a long time.
4. Failing to save money from each paycheck. If you’re struggling to make ends meet, saving money often seems impossible. But this is the time it’s most critical. Start by saving 1% of your take-home pay and build from there. If you never save any money, how will your situation change?
5. Making impulse purchases. How many times have you made a big purchase and then run out of money at the end of the month? Impulse purchases are rarely satisfying after the initial glow has worn off. In fact, you’re probably resentful of the purchase after the financial pain comes home to roost.
7. Failing to contribute to your retirement. After forty years of toiling to make ends meet, wouldn’t it be nice to retire comfortably? Many seniors find themselves in challenging financial circumstances because they failed to contribute adequately to their retirement. It’s never too late to start.
Eliminating negative habits is the most effective way to start your journey to financial abundance. Choose one habit and make an effort each day to remove it from your life. The most powerful action you can take with regards to your finances is to eliminate your three most debilitating financial habits.
What would you rather invest in real estate or stocks? Most people I asked preferred to invest in real estate. Investing in real estate is nice, if you can afford it. We all hear about housing prices skyrocketing in San Francisco and thought, if I had just bought some real estate there 10 years ago!
Stock investing is easy to get into, Sirius XM stock cost about $6/share and you can buy one unit of General Electric for about $10.
Here are more advantages of investing in stocks:
The price of real estate can rise by tens of thousands of dollars in a very short period of time, that just doesn’t happen with stock.
So, should we invest in real estate or stocks? Both, in a way.
A Real Estate Investment Trusts (REITs), is a type of real estate company that resembles a stock. It allows small investors the opportunity to invest in real estate.
REITs invest in land, apartments, hotels, office space, retail space, industrial space, mortgages, and mortgage backed securities.
Most of us are unable to invest in a shopping mall or other large property on our own, but REITs provide a means to do just that. Imagine being able to invest in those huge properties.
REITs are unique and provide many advantages for the average investor. First, it’s important to understand real estate investment trusts.
1. Equity - These REITs invest predominantly in real estate properties and receive most of their revenue via collecting rent. Revenue is also generated by property sales. Approximately 90% of REITs fall into this category.
2. Mortgage - These REITs receive the majority of their revenue from investing in mortgages and related securities. The risk tends to be higher with mortgage REITs because of the unpredictability of interest rates.
3. Hybrid - These REITs are a combination of equity and mortgage REITs.
Many REITs are listed and traded on the major stock exchanges, just like stocks.
REITs share some key advantages with stocks:
There are several key tools that can be used to achieving good credit, but the combination of direct deposit & automatic payments are at the top of the list. Below explains why.
Setting up automatic payments from your checking account for your routine bills: auto loan, utilities, and nsurance bills offers two key benefits:
Payroll Direct Deposit is a process where employee earnings are automatically deposited into bank accounts. Most medium and large companies offer this service to employees for free.
Work with your creditors to set the due date for your bills to be after your direct deposit.
Direct deposit and automatic payments combined, will result in you never paying bills late, (along with other benefits mentioned). When credit scoring agencies see that your bills are always paid on time, your credit score will continue to move up and stay up in the higher brackets.
I am a Certified Public Accountant and pride myself on making investing, personal finance and business concepts easy to understand.