We like to stress the importance of seeking simplicity, safety, and predictability in your financial life. There are many things you can do to simplify your financial life this year, starting with cutting down on the number of bank and investment accounts you have and opting to receive your bank and brokerage statements online rather than on paper. But there’s a lot more to simplifying your financial life, like opting for straightforward investments rather than the exotic investments that end up being a debacle for many investors (need we mention cryptocurrencies?) Exchange-traded funds, index funds, and target funds offer simplicity, as do straightforward, old-fashioned insurance policies. As you go about your planning for 2023, look for simpler ways to arrange your financial life.
Smart Money Tips
- Quit using outside storage. Outside storage may be a way to store stuff you don’t usually need at home (like holiday decorations), but those monthly charges really add up. Perhaps you could do some decluttering at home and bring back the stuff that’s in storage, much of which could probably also stand to be donated or tossed. If you must think about what you will do with the savings from kissing the storage facility goodbye, you haven’t read our weekly remarks very closely.
- Prepare for a large increase in long-term care insurance premiums. Long-term care insurance premiums are probably going to rise even more than many have already. The insurance industry badly underestimated the cost of this coverage (as if it isn’t already expensive enough), and some policyholders are finding their premium costs doubling or more. If you already have an LTC policy, will your retirement budget be able to withstand a sharp increase in the premium? This question also applies to those who are in the market for a policy. While the insurance company will probably offer to keep the premium unchanged if you agree to a reduction in benefits, that’s a steep price to pay for the company’s botching their original premium projections.
Food for Thought
We will open the book. Its pages are blank. We are going to put words on them ourselves. The book is called “Opportunity” and its first chapter is New Year’s Day.
–Edith Lovejoy Pierce
Money Can Be Funny
The gist of New Year’s Day is: try again.
-Frank Crane
Word of the Week
quaaltagh (KWAHL-tuhk) – The first person to enter a house on New Year’s Day.
Origin: From the Manx quaaltagh meaning “someone who meets or is met.” The word quaail means “meeting”
A light-haired male or female is deemed unlucky to be a first-foot or quaaltagh on New Year’s morning.