Finance
‘Spring cleaning’ for your finances: 12 money moves to make right now
Allworth Advice: Some 401(k)s are not like others
Amy Wagner with Allworth Financial discusses whether a 401(k) is the best retirement plan.
Allworth Financial, Cincinnati Enquirer
Spring cleaning can mean tidying up your wallet or pocketbook, as well as your closet.
In the spirit of renewal, here are 12 financial moves you should make this spring. Some are annual rituals, or should be. Others are tasks we tend to put off, but shouldn’t.
1. Revisit your resolutions
Many of us set New Year’s resolutions for 2024 around spending and saving, borrowing and earning, but fewer of us followed through on them.
“For a lot of people, a top money goal was paying off credit card debt or starting an emergency fund,” said Kimberly Palmer, a personal finance expert at NerdWallet. Spring is “the perfect time to see if you’re making any progress,” she said.
And what if you’ve made zero progress?
“For those of us who fell off track, there’s something called a reset button,” said Ashley Folkes, a certified financial planner in Birmingham, Alabama. “Spring offers the perfect opportunity to restart where we left off, without dwelling on regrets.”
2. Clean your financial ‘junk drawer’
Spring offers a chance to sort through that drawer – or box, or unused corner of the dining room table — where you stash financial paperwork to deal with on some unspecified future date.
“You know the one I’m talking about, where you toss all your statements and bills, intending to sort them out later,” Folkes said.
Working through the neglected papers is a great way to ease financial stress, he said. Throw some away. File some away. Deal with the rest, one way or another.
3. Start a 2024 tax folder
Speaking of papers: If you haven’t already, consider setting up a folder to stow all your tax documents for 2024: receipts, donation forms, and anything else you need to report or plan to deduct. Better still, set up one real folder, and another on your laptop, says Jeff Farrar, a certified financial planner in Shelton, Connecticut.
This tip comes from Jeff Farrar, a certified financial planner in Shelton, Connecticut.
4. Watch that withholding
While you’re at it, look at your W-4 form and make sure you are withholding the right amount of your paycheck.
“Since taxes are on our mind, with April 15 coming, why not get better prepared for next year’s taxes?” Farrar said.
Will you get a refund next year, or will you owe? Most of us have a lot more control over that question than we think, said Jeff Jones, CEO of H&R Block. You may want to reap a large tax refund to help your family’s cash flow. You may prefer to limit your withholding so that you hold onto more of your paycheck until tax time. The decision is yours.
“In general, you can actually control the outcome,” he said. “We try to remind people, it’s really a choice you can make.”
Most of us have fairly predictable income. Take a look at your last few tax returns. Study the pattern. Are your earnings trending up, or down? Then, consult a tax professional.
Taxpayers straightforward returns “can be in much more control if they just get some expert help and think about withholding changes on their W-4 at the beginning of each year,” Jones said.
5. Talk to your tax preparer
More broadly, spring is a great time to have a conversation with the person who prepares your taxes.
“Aside from housing, taxes are most people’s largest annual expense, so it deserves more attention than pulling together your W-2 and 1099s” and sending them in, said David Flores Wilson, a certified financial planner in New York.
“Our advice is to have a thoughtful, proactive conversation with an accountant, CPA, or financial planner after the spring tax deadline so that you can strategize what you can do the rest of the year to lower your taxes prior to next spring,” he said. “Perhaps there are deductions or credits you weren’t aware of.”
6. Max out your retirement plan
You can contribute to an IRA up to April 15 and have the money count toward your 2023 savings. The contribution limit for 2023 is $6,500 if you’re under 50, $7,500 if you’re older.
Even better, get an early start on contributing to your IRA for 2024. The longer the money sits in your retirement account, the longer it can accrue interest.
“There is a 15-month window to make IRA contributions for any given year,” said Mary Ryan, a certified financial planner at Vanguard. “The earlier you make it, the more you benefit from the compounding effect,” earning interest both on the money you’ve saved and on the interest it has already reaped.
Spring is also a good time to challenge yourself to contribute to a workplace 401(k), Wilson said.
Those plans have higher contribution limits: $23,000 in 2024, plus an extra $7,500 if you’re 50 or older.
“Maxing out 401(k) contributions can lower your taxes and get you closer to financial independence,” Wilson said. “Our advice is to marginally increase your contributions every couple of months, up to a level that’s uncomfortable, then back off a little.”
Not saving for retirement? Now is a good time to start.
“Even if you can only save a little right now, getting started is very important, because you want to give your retirement savings time to grow,” said Terri Fiedler, president of retirement services at Corebridge Financial, a financial services company in Houston. “Ideally, you’ll be contributing enough to at least maximize what your employer will match. And if you’re not there yet, look for opportunities to increase your contributions over time.”
7. Name your beneficiaries
Most retirement plans and life insurance policies include beneficiaries: The folks who get the money if you die.
Many of us procrastinate in naming them. In the spirit of spring cleaning, why not name them now?
8. Dust off your estate plan
Speaking of beneficiaries: Anyone with an estate plan should review it every year, or at least any year when a major life event plays out, like a job change, marriage, divorce or arrival of a new child, experts advise.
“An estate plan isn’t something you can set and forget,” Ryan said.
Consider whether you need to update any part of the plan, including your beneficiaries.
9. Book your 2025 vacation in 2024
Setting up vacation plans a year early saves money and gives you more choice of flights and lodgings, experts say. And then there’s the psychological value.
“Studies have shown the anticipation of a vacation is half the psychic value you get out of it,” Farrar said. “So, enjoy this summer’s family vacation, but put next year’s on the calendar, as well.”
While you’re at it, he said, “dig out your passport and check the expiration date. Nothing worse than getting ready for an international vacation and realizing your passport is about to expire.”
10. Review your investment portfolio
“You don’t need to monitor your portfolio on a daily basis,” Farrar said, but spring is an ideal time to review your asset allocation and make sure it suits your needs.
Your mix of stocks, bonds and other investments can drift over time, and your portfolio objectives change.
“Check to see if your allocation of stocks vs. bonds is where you want it to be,” said Maureen Demers, a certified financial planner in North Andover, Massachusetts.
11. Invest in high-yield savings
Yields on savings accounts, certificates of deposit, money market accounts and other savings vehicles have been up for the last year or two, along with interest rates generally.
Yet, many people “are still holding large cash balances in suboptimal, low-yielding vehicles,” Wilson said.
If your savings isn’t earning 5% annual interest, or close to it, consider transferring the balance into a high-yield account.
Growing debt: Our credit card balances threaten to swamp our savings. Here’s how to deal with both
12. Check your credit card
Credit card debt is rising, along with credit card interest rates. Now is a good time to take a good look at your card, especially if you carry a balance from month to month, Palmer said. The key question: “Are you paying more interest than you realize?”
Credit card rates change over time, and lately, they’ve been going up.
If the APR on your card is rising, Palmer said, then it might be a good time to shop around for a new card.
Daniel de Visé covers personal finance for USA TODAY
Did you know there are some financial metrics that can provide clues of a potential multi-bagger? Amongst other things, we’ll want to see two things; firstly, a growing return on capital employed (ROCE) and secondly, an expansion in the company’s amount of capital employed. Ultimately, this demonstrates that it’s a business that is reinvesting profits at increasing rates of return. Although, when we looked at Big Technologies (LON:BIG), it didn’t seem to tick all of these boxes.
Our free stock report includes 2 warning signs investors should be aware of before investing in Big Technologies. Read for free now.
For those who don’t know, ROCE is a measure of a company’s yearly pre-tax profit (its return), relative to the capital employed in the business. To calculate this metric for Big Technologies, this is the formula:
Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets – Current Liabilities)
0.09 = UK£12m ÷ (UK£144m – UK£8.5m) (Based on the trailing twelve months to June 2024).
So, Big Technologies has an ROCE of 9.0%. On its own, that’s a low figure but it’s around the 11% average generated by the Electronic industry.
See our latest analysis for Big Technologies
Above you can see how the current ROCE for Big Technologies compares to its prior returns on capital, but there’s only so much you can tell from the past. If you’d like, you can check out the forecasts from the analysts covering Big Technologies for free.
When we looked at the ROCE trend at Big Technologies, we didn’t gain much confidence. Around five years ago the returns on capital were 12%, but since then they’ve fallen to 9.0%. Meanwhile, the business is utilizing more capital but this hasn’t moved the needle much in terms of sales in the past 12 months, so this could reflect longer term investments. It’s worth keeping an eye on the company’s earnings from here on to see if these investments do end up contributing to the bottom line.
On a side note, Big Technologies has done well to pay down its current liabilities to 5.9% of total assets. So we could link some of this to the decrease in ROCE. Effectively this means their suppliers or short-term creditors are funding less of the business, which reduces some elements of risk. Since the business is basically funding more of its operations with it’s own money, you could argue this has made the business less efficient at generating ROCE.
Bringing it all together, while we’re somewhat encouraged by Big Technologies’ reinvestment in its own business, we’re aware that returns are shrinking. Moreover, since the stock has crumbled 75% over the last three years, it appears investors are expecting the worst. Therefore based on the analysis done in this article, we don’t think Big Technologies has the makings of a multi-bagger.
Finance
Stock market today: Dow, S&P 500, Nasdaq decline, reversing earlier gains amid latest Trump tariff moves
Investors’ consensus view of the macroeconomy has flipped on its head in the past month.
In the latest Bank of America Fund Managers Survey released on Tuesday, 49% of respondents said they expect a “hard landing” for the global economy — where economic growth deteriorates before inflation fully retreats — in the next 12 months. Last month, just 11% of respondents had expected this outcome.
Conversely, a “soft landing” — where inflation falls to the Fed’s 2% target without the economy tipping into recession — is no longer the consensus. In the latest survey conducted from April 4 to April 10, just 37% of respondents said they expect a soft landing. This is down from 64% expecting a soft landing a month ago.
The shifts in sentiment reflect how economists have been discussing the potential impact of President Trump’s tariffs, with many expecting the new policies to boost inflation and slow economic growth. Some even believe the tariffs could push an already slowing US economy into recession later this year.
“The Fed had accomplished what many had thought was impossible,” BNP Paribas chief US economist James Egelhof told Yahoo Finance, pointing to a recent strong jobs report and inflation hitting its lowest level in four years. “It had brought us to the brink of a soft landing. Now, the tariffs change everything.”
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