Surprise! There’s no secret formula to living a financially savvy life – your whole life long. But there are steps you can take early on, say when you’re in your 30s and 40s, to be sure you’re set up for longterm financial success.
How you live your life – where you live, who you marry (if anyone), how much you make – will determine how much money you’ll need to live the life you want. The best way to prepare for financial success is to try figure out all those costs in advance, says Jill Ross, Senior VP & Chief Experience Officer at First Commerce Bank.
And if you’re thinking, ‘How on earth do I do that?’ you’re not alone. That’s what Ross is here for. She’s sharing some of the often-forgotten buckets of funding you should remember, and the powerful tips you’ll need to financially succeed.
Jill Ross- First Commerce Bank
Home improvements
Buying a house is one of those big life stages that everyone at least thinks about. And when it is time to take that giant step, it’s usually after months, if not years, of planning, researching and budgeting. But are you really preparing for everything that comes along with that life-changing investment?
“Depending on how old the home is,” says Ross, “how old the heating and air conditioning is, what condition the roof is in, you might have big costs at some point down the road. Homes have big upkeep costs.”
And if you’re not preparing for those costs, you could find yourself in a tight spot – with no A/C.
Tax expenses
Does anyone like taxes? But they’re one of two things that are certain in life. And if you’re not thinking about your taxes more than once a year, says Ross, you’re doing it wrong.
Most importantly, you should be budgeting for some tax expenses in your future. It happens, and you don’t want to be scrambling for that extra cash when April 15 rolls around. One way to stay on top of this is to review your pay, how much your employer is withholding and compare that to your estimated tax bracket.
Ross takes this one step further though. “I like to break even or have to owe come tax season,” she says. “It sucks to have to owe, but that means they don’t have that money and I can do something with it.”
Like investing it. But Ross reminds anyone who wants to try this strategy to stay on top of their income and make sure they don’t cross the limit where you begin to pay penalties.
The easiest way to stay on top of that, she says, is to hire a tax professional.
Kids
Having kids is a big decision. We don’t have to tell you that. But before you take that jump, make sure you’re thinking about everything that comes with raising kids.
“Do you need to save for their weddings, their college – what other expenses will you have for them?” says Ross. “My biggest piece of advice is to start a savings account for your child as soon as they have a social security number.”
And when it comes to saving for college, don’t forget to look into how you’re doing the saving. “With certain college planning accounts, you can only use the funds for college,” says Ross. “It might only transfer to a certain person in the family, might only be used for certain schools. So make sure you talk to a professional about the account you’re choosing.”
