Hacks for More ??
We know saving and investing isn’t easy. With inflation, rising costs, and little time in a day, who’s got time to figure all of this out?!?! emvest.ai has got your back to hack yourself into this.?
- Hacks to grow your money ?? without more work
- Good News: Pay increases now mean something!
- Shameless self-promotion: Get emvest.ai
Today's newsletter is 859 words, estimated reading time: 5 minutes.
Hacks for ?? & ??
I’m sure you’ve heard of “paying yourself firstâ€. Whelp, that’s what you have to do to secure your financial present and future. We’ve got 4 hacks and some pro tips to pay yourself first.?
Hack #1: Autopay your debt
Before you go onto save and invest boat loads of money, REDUCE YOUR HIGH INTEREST RATE DEBT FIRST!!! This means paying your credit cards, expensive student loans, mortgage, car loans, and whatever else that has an interest rate of over 5%.??
Yep, this means I autopay my credit cards. That doesn’t mean I don’t check my monthly statement.? I still check all the charges are correct, but I’m not going to be hit by:?
- Late fees
- High interest fees for forgetting to pay
If you’re anything like me, I have a large monthly Costco bill and it’s imperative that I pay my bill in full or face a 22% interest fee for late payment.? If I’ve spent $1000 at Costco, this means if I miss a payment for a month I’m paying $220 in FEES! I could buy 44 rotisserie chickens with the money in fees! ?? Cluck, cluck.
Hack #2: Auto-transfer money from your checking into your savings funds
The title says it all. Wherever your paycheck is deposited, set up an automated monthly transfer to your savings accounts, such as your emergency fund.? This could mean an auto-transfer of $100 from your checking account to your money market fund that’s paying 5% interest on the 5th of every month.?
?? Pro Tip: Set the transfer day a few days after your paycheck is deposited. This helps ensure your account has the money it needs in case of holidays and glitches that impact your account balance and minimums.?
Hack #3: Maximize Your 401k ASAP?
Putting money into your 401k is the best way to optimize for taxes and save quickly for retirement.? To do this as fast as possible, this means I put 20% of my paycheck in my 401k so I max out quickly.??
Why max out on my 401k at the beginning of the year?
In case I get laid off, I know that I’ve cared for my financial future AND optimized my taxes.? Some of you may think this is crazy, but the 401k allows you to put up to $22,500 in 2023. There is no other retirement vehicle that lets you save so much pre-tax.? If it takes me a while to find a job, at least I’ve paid myself first.? I did this by accident during the Great Recession in 2010 and it was one of the best accidents to happen because it took 9 months to find a new job.?
Maxing out your 401k at the beginning of the year too much for you??
You can reduce the percentage to 10% or 8%, whatever number or percentage that suits your needs. Be aggressive as you can because job stability is hard to find.?
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Hack #4: Auto-invest in the Stock Market via the S&P 500
Just like the savings account, you can also use your brokerage account (regular investing account, IRA, Roth IRA, Rollover 401K, and the like) to auto-invest in the S&P 500.? This ensures your money is quickly invested into the stock market and not left in cash where it’s losing value due to inflation. This removes the headache of trying to figure out how to stock pick while ensuring you don’t miss out on gains in the market.?
Stat Alert ??: The S&P 500 has only been down annually 26% of the time since 1950. The average annual return of the S&P 500 is 10%.?
Not sure which S&P 500 ETFs to choose? Pick low fee ETFs, such as VOO, IVV, and SPLG to start.? Be sure to compare fees because not all ETFs fees are the same and it impacts your NET return aka, what you ACTUALLY get in your account.?
?? Pro Tip: Avoid the notable Spider S&P 500 ETF Trust (SPY) due to higher fees at 0.09% vs. 0.03% for the ETFs mentioned above.? This impacts the money you actually take home aka net returns.?
Closing Out: Pay you and what’s most important to your stability FIRST. ‘Cuz you’re NUMBER #1! ??
Wages Increases Now Mean Something
Wages have risen above 4% from June 2022, while inflation rose 3% over the same time period. This means you and I are able to feel that we can afford everyday items, such as groceries and gas.?
tl;dr: Purchases should FEEL less expensive.?
What to ?? out for: Whether the Fed will raise rates and its impact on jobs and the unemployment rate in the coming months. More at NY Times.
??Shameless Self-Plug: Get emvest.ai at your company??
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