Where does a Polar Bear keep its money? In a snow bank.
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It's money. I remember it from before I had kids!
Money can allow you to do fun things but managing money is not always fun or funny!
While I hope the jokes above at least made you smile you are probably looking for more insightful financial solutions. Please keep reading.
Emergency Savings Accounts that Pay You More
While bonds underperformed last year, the silver lining is savings accounts and money markets are paying interest rates that we haven't seen in more than a decade. I have heard from local bankers that they are offering "special" rates on new deposits. However, the rate they are paying compared to other options can be quite wide.
The average interest rate for savings accounts is 0.23% as of March 1, 2023 according to Bankrate.com. High-yield savings accounts at Capital One and Marcus were paying more than 3% interest on deposits. Charles Schwab has a money market fund that is paying more than 4% with no minimum deposit at the beginning of March 2023.
There are other Schwab money fund options for large cash holdings or tax-free interest from municipal money market funds. To view the entire list click on this link:
Schwab Money Market Choices
Changes to Retirement Account Contributions
In 2023, the following maximum contributions into retirement accounts increased:
401(k): $22,500; Catch up for 50 and older is another $7,500
SIMPLE IRA: $15,500; Catch up for 50 and older is another $3,500
IRA and ROTH: $6,500; Catch up for 50 and older is another $1,000
SEP and profit sharing: Maximum contribution up to $66,000
*Remember, you are allowed to contribute to an IRA/ROTH even if you contribute to an employer retirement plan.
HSA max contributions also increased in 2023. $3,850 if you have self-only coverage or up to $7,750 for family coverage.
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When It Comes to Marriage and Money, Opposites Attract
(Julia Carpenter | The Wall Street Journal)
When looking for a potential spouse, an individual might look for someone with similar values and qualities, thinking that doing so will lead to less conflict in the marriage. But recent research suggests that when it comes to money, having different values (combined with strong communication skills) can actually boost a couple’s financial partnership.
For instance, an individual who tends to save and rarely spends on themselves might look for a partner who can help them feel more comfortable with an occasional splurge. And rather than staying rigid in their views, spouses often find middle ground over the course of their marriage, learning from each other in the process (although money can become a source of conflict for those couples who cannot find a middle ground).
At the same time, productive communication between spouses about financial issues is an important part of building mutually beneficial financial practices. For instance, if one spouse serves as the household ‘CFO’ (e.g., by managing the couple’s bank accounts and investments), it can be useful for the other spouse to remain aware of and involved in the couple’s finances, not only to be prepared in case something happened to the ‘CFO’ but also to contribute their own ideas and values to financial decision making. In addition, by discussing their mutual goals for their money couples can avoid falling into the trap of focusing on what one partner wants the other to avoid when it comes to spending (which can breed antagonism rather than cooperation).
As a financial advisor, there have been many instances where I have helped encourage positive financial communication between spouses and build gratitude towards each other. By stressing the importance of both partners participating in financial planning meetings, they are stronger as a single married unit and better prepared future changes. Spouses also benefit from the group meetings as they provide community or social support and that builds gratitude to reduce money disputes. Questions to help strengthen the financial bond in marriage include, “What are three things you currently think you (or your partner) do(es) well financially?” or, “Describe three financial things you feel content about right now?”
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