Are you feeling a little flusher than usual? And no, we’re not just talking about your ire after watching The Bachelor last night. (Yes, it’s my guilty pleasure. Don’t judge.) The sort of flush I’m talking about is a bump in your take-home pay. For many people, the new tax law has resulted in heftier paychecks. But the overhaul brings other changes that will affect what you’ll owe overall. Brackets have changed, some deductions were trimmed and the standard deduction doubled.
Bottom line: At the end of the year, some of that money you’re receiving may have to be paid to Uncle Sam. As the incredibly knowledgeable and dogged tax reporter Laura Saunders (who has been on this beat since we worked together at Forbes in the early ’90s) laid out in the Wall Street Journal, going through the process of checking your withholding is a good idea for pretty much everyone. But it’s particularly important for two-earner couples, filers with large itemized deductions on Schedule A and anyone who claims more than two “personal allowances.” The IRS just released a new tax withholding calculator to help make sure you have the right amount withheld from your paycheck. Once you figure out what the right amount is, you can change your withholding by filling out a new W-4 form and giving it to your employer ASAP. And until you’ve gone through this process, stashing — rather than spending — your extra spoils is definitely the right move.
Think Like A Girl
Happy International Women’s Day! This week on March 8th, we celebrate the movement for women’s rights and take time to reflect on all the things women do so well. One of those is the undersung fact that we tend to manage our finances better than men, according to a 2017 analysis of eight million investors from Fidelity Investments. Women not only save 0.4 percent more than men each year, their investments earn an additional 0.4 percent annually. It sounds like very little, but over time (and with the help of compounding), it can add up to tens of thousands of dollars, sometimes more. What are the keys to investing a little more like a girl?
Don’t let an abundance of confidence lead you to act rashly (or act too often). It has been well-documented that women lack financial confidence, but that works to their advantage. Men tend to be overconfident, which leads them to trade more frequently. Factor in the transaction costs, and women get the better return.
Keep your emotions at bay. Women tend to avoid making rash decisions when it comes to our portfolios. This is particularly important when the markets are roller coaster-ing (or dropping precipitously) and you’re inclined to sell. Trying to gauge when to get back in can leave you on the sidelines for much too long.
Focus on the goal rather than the game. Women tend to be more oriented toward achieving an end objective rather than investing to produce the best possible return. That serves women well because it encourages keeping risk levels appropriate.
Are you ready to do your grocery shopping at a big box store or online? It may be time. An app called Basket facilitates comparisons on everything from avocados to ground beef from brick-and-mortar grocers as well as big box stores like Walmart, Target and Amazon. It shows that the big guys like Walmart, Target and Amazon are consistently offering lower prices for popular items compared to regional grocers like Publix, Safeway and Wegmans. According to Recode, Walmart’s prices were 16 percent cheaper than regional and local grocers for 15 of the most-searched grocery items (including milk and chicken breasts) on Basket. (Sales were also taken into account.) Target’s and Amazon’s prices were cheaper by 13 and 4 percent, respectively.
Tightfisted Tooth Fairy?
Finally, it looks like the Tooth Fairy is feeling a little pinched. The average amount of money paid per tooth has dropped from $4.66 to $4.13 — an 11 percent decrease from last year, according to Money.
Delta Dental, which conducts the annual Original Tooth Fairy Poll, interviewed over 1,000 parents of six- to twelve-year-olds about how much the Tooth Fairy leaves under the pillow. The winged one was more generous in western states (where the average child received $4.85 per tooth) and least generous in the Midwest (where each pearly white netted an average $3.44 per tooth). Maybe the Tooth Fairy is keeping the excess under his or her own mattress instead?
Have a great week,