Last year, I wrote about lowering the bar for happiness. I recently found out my neighborhood doughnut shop is experimenting with the cronut trend, and I became genuinely giddy. So I think I've been doing pretty well with that resolution.
I can't believe it's already 2014, and the new year has me thinking about resolutions again. The start of the year is a good time to clean up your finances and tackle any money changes you may have been putting off. So I assessed my income, savings and spending and came up with a handful of my own money resolutions for the new year.
Max out my retirement, continue saving
Last year, I maxed out my IRA and was able to save in another account. It felt good to be able to save. Last year, my income earnings were relatively high. Recently, that changed drastically, but I still want saving to be a priority. Thus, one of my goals is to max out my retirement. This might mean taking on extra jobs; it might mean cutting back significantly on my spending. Either way, I want to continue to save despite my change in income.
Open an HSA
A year and a half ago, I researched Health Savings Accounts after my dad raved about his. At the time, I decided it wasn't for me. Calculating the tax savings and considering the different health scenarios, it didn't seem worth it to switch from my already low-premium insurance plan. But last April, I turned 30, and my insurance increased. Then, throughout the year, I had some health-related expenses that weren't covered by my insurance (they were, however, HSA-eligible expenses). It would've been great not to pay taxes on those.
A few months ago, I got a letter from my insurance carrier about switching to a new plan with the instatement of the Affordable Care Act provisions. The suggested plan happened to be an HSA-compatible plan at $210 a month. I took to the ACA website to research my other options. Yes, the website loaded, and I discovered I was eligible for a cheaper plan. But I ultimately decided to go with my insurance carrier's new plan and open a Health Savings Account. Why? Well, I've alluded to a few reasons above, but to summarize:
- Contributions are tax-deductible
- Tax-deferred interest
- Tax-free medical expenses
- Another method of saving for retirement
- Research credit unions I've been contemplating a big-bank switch, but after reading and hearing so much praise for credit unions, I'm wondering if they might be a better option. Admittedly, I don't know much about them, aside from reading that credit unions have better interest rates and lower fees, but some consider them less convenient. I'll research them more and put together a pro/con piece as I make that decision.
- Open a checking account with interest Sarah Gilbert wrote about how most people won't change banks, partly because it's a hassle. Guilty. Especially because I opened my bank in another state, I'm worried about how difficult it'll be to close it. Last time I closed a checking account, it was a huge pain in the ass, so I've postponed even thinking about it.But after researching interest rates for another post, I was faced with the realization that my current banking situation sucks. My checking account, for example, not only doesn't earn interest, it also charges me $12 if my balance falls below a certain amount. That's just rude.
Thus, my New Year's resolution for 2014 is to reassess my banking situation, do some research on banks versus credit unions and, finally, switch.
Thanks to some helpful people in my work life, I've still been able to pay the bills despite losing a big client. But, as I mentioned, I still want to save for the future, and that means I'll have to earn more. It's a generic money goal to have, but it's also a big one.
Earning more is probably my top money goal for this year. That being said…
Find a balance between work and passion
And here's where I'll veer from the practical side of things and talk about all that right-brain junk.
We've certainly discussed the topic here enough, but it's an important one: jobs versus passions. For example, a guest post last year asked, “What would it take to quit your job and pursue your passion?” Another reader wrote about building up the courage to quit a promising career. And Holly Johnson shed light on the fact that a career switch isn't always what it's cracked up to be.
Despite taking on a writing career, this is always something I've wavered on — choosing money versus choosing passion. Ideally, it'd be great to have both. To some extent, I do have that, and that's pretty cool.
But I have a long list of passion projects that I've postponed because of money. I've always put them on the back burner in favor of earning more. I did it when I graduated and decided to take on a career in the engineering/tech writing industry, for example. I didn't go to school for tech writing or engineering, and I didn't find it interesting. But it paid well, and I learned to be good at it (and, actually, it was kind of fun sometimes).
Generally, I've always teetered in favor of money. I certainly don't regret my decisions; they were good for my finances. But I do think there's a delicate balance in doing what you love and making money. Recently, I was discussing this with a friend, and she pointed to our upbringing. Our parents grew up poor, so they never really encouraged us to pursue our dreams. They did encourage us to be financially independent, though. And that's great, but as adults, we both find it difficult to say no to money, even if it means setting aside our dreams and passions.
On the other hand, before I moved, I had a friend who tried to convince me that following your dreams is worth anything, including taking on hundreds of thousands of dollars of credit card debt. We had a long argument about it, and ultimately, my point was, debt keeps you from doing things, including pursuing your dreams. Despite the fact that Kevin Smith paid for Clerks with a credit card, debt usually makes things worse for most of us. Usually, debt holds us back and distances us even further from our passions. Why? Because instead of focusing on the unlimited potential of your amazing creativity, you're distracted by your crappy financial situation and the looming repercussions of a negative net worth.
Point is, I worked hard for financial security, and I did it so I could live the life I want. As long as I'm secure, I want to spend more time on things I'm excited about. In fact, that's why I recently launched my own silly website, Brokepedia. (Sorry for the shameless plug). It's a blog I've been kicking around in my head for a while but have always been too scared or intimidated or busy to start — but in the spirit of finding balance, I decided to go for it.
I can't believe 2013 is over, and what an eventful year it was. The New Year is a great time to go reassess different areas of your life, including finances. These are my money resolutions and goals — what are yours?
Kristin Wong is a freelance blogger who frequently writes about relationships for MSNâ€™s The Heart Beat blog. After paying off her student loan debt, Kristin decided it was time to pursue her dream and also put her English degree to use. She scrimped, saved and in 2010, left her hometown of Houston, Texas to pursue a writing career in Los Angeles. Since then, she has written for television, web, and occasionally, sketch comedy. When sheâ€™s not attached to her laptop, Kristin enjoys baking, amateur gardening, listening to 60s rock and exploring her city.