I have more student loan debt than I care to admit. But it was my decision, and I own it.
There’s been a lot of chatter in the news lately about student loan debt. With the total U.S. student loan debt reaching $1.75 million (mine included), the calls to forgive student loan debt have reached a crescendo—as if, if we scream it loud enough, the debt will just disappear into the ether. Removing the prospect of a presidential magic wand making it go away, the real question now is this: how do you save for the future, pay down your debt, and live fully?
I often read news articles detailing the hardship new graduates face when they struggle to pay down their loans and subsidize their lifestyles. I see a lot of finger-pointing toward a rigged system, corporations underpaying, or the predatory nature of lending. This isn’t to dismiss legitimate concerns of these institutions, but too often, I see a lack of personal agency. Behind some news articles, you find the subject of the article owns a Mercedes or rents an apartment that their social status dictates they should have but not the one their wallet demands. Take a step back.
Can you answer “yes” to these questions?
I know exactly how much money I’ll have at the end of the month.
I do not live paycheck to paycheck.
I can pay my bills and still save for wish list items.
If you answered “no” to any of those questions, it’s time to look at your current lifestyle. There’s an emotional component to finance that we often overlook. For many of us, our relationship with money becomes a reflection of who we are as a person. No one proudly admits they spend $150 on brunch a month. And no one boasts about their tendency to avoid their bank accounts out of fear of what the balance will be. After college, I had a coming-to-Jesus moment when I decided that to live my life fully, I needed to be the one who dictated where each and every dollar went. Enter zero-based budgeting.
If you’re not familiar with it, zero-based budgeting requires you to assign each and every dollar of your paycheck to a job. By assigning each dollar, it exposes your spending habits and tallies all the dollars and cents that have a sneaking tendency to add up well beyond your expectation. You must decide, “Do I need to budget $100 on Uber rides? I’d rather apply it to something else more important.” There is a mental calculation and trade off that must occur for you to affirm how your money is spent. There are several apps you can find to assist with this, such as You Need a Budget (YNAB) and EveryDollar. Having done this myself for a while now, I have found significant savings that I use to apply toward next month’s bills, thus providing me a safe buffer should I run into emergency expenses. I cook meals at home, and now suddenly I have $150 to allocate how I want (hello, Hawaii fund!).
Here’s the point: budgeting every dollar sets you free. It sounds counter-intuitive, but it’s not. I’ve been able to tell every dollar what to do. I can set goals for myself, make trade-offs, and avoid incurring more debt. That constant fear of not knowing if I’ll make it to the next paycheck has vanished. It’s also worth noting that while it may feel difficult at first to adjust, your income is likely to increase as you pay down your loans. Luckily, your spending habits will stick even as you increase your wealth.
How do you save for the future, pay your debt, and live fully? You take control of your financial situation—warts and all.
Disclosure: All opinions expressed in this article are for general informational purposes and constitute the judgment of the author(s) as of the date of the report. These opinions are subject to change without notice and are not intended to provide specific advice or recommendations for any individual or on any specific security. The material has been gathered from sources believed to be reliable, however Merriman cannot guarantee the accuracy or completeness of such information, and certain information presented here may have been condensed or summarized from its original source. Merriman does not provide tax, legal or accounting advice, and nothing contained in these materials should be taken as such.
Meeting new clients is one of my favorite parts of working in wealth management. They come to us from all walks of life, and there’s a certain fascination associated with discovering each client’s journey that brought them to Merriman. Part of that discovery process involves understanding a client’s financial situation and looking at their previous work history. We see asset statements for IRAs, brokerage accounts, and, more often than not, an old 401(k) plan from a previous employer that’s been hanging around. Trust me, I’ve been there. Everyone switches jobs, and in the hustle and bustle of getting set up with a new company, the previous company’s 401(k) plan is left to its own devices with the assumption that it’ll continue to grow in value. But at what cost?
There are several options you can pursue in handling your old 401(k). We’ve put together a great tool to help you decide what to do: The Ultimate Guide to 401(k) Rollovers! We discuss your options, ranging from doing nothing to rolling your 401(k) into a traditional IRA. We walk through the advantages and disadvantages of each option as well as what to think about before making a decision. Every person has a different set of circumstances that must be taken into consideration, so ultimately, the decision you make has to be the one that is best for you. As always, if you find yourself wanting to speak with an expert, don’t hesitate to reach out to us at Merriman.
Disclosure: The material is presented solely for information purposes and has been gathered from sources believed to be reliable, however Merriman cannot guarantee the accuracy or completeness of such information, and certain information presented here may have been condensed or summarized from its original source. Merriman does not provide tax, legal or accounting advice, and nothing contained in these materials should be relied upon as such.
To learn more about the New Payroll Tax in Washington State check out our previous post.
To start the process of applying for an exemption from the Washington Long-Term Care payroll tax (WA Cares), you will need an account with SecureAccess Washington (SAW). If you do not currently have an account, you will be asked to create a username and password for the site. You can get started here: https://secureaccess.wa.gov/
Note: Before creating an account, be sure to double check if you already have one as many Washingtonians use this site to also apply for fishing licenses, paid family and medical leave, professional licenses, and more.
1. After creating an account, you will be directed to this page. Select “Add a New Service.”
2. From here, you will select the option for “I would like to browse a list of services by agency.”
3. Scroll down and select “Employment Security Department.”
4. Select Paid Family and Medical Leave (PFML) by clicking “Apply.”
4.5 If you are already registered for PFML, please skip to step 7.5.
5. By selecting the Paid Family and Medical Leave (PFML) option, this service is added to your SecureAccess account. From here, you can begin the process of applying for the Long-Term Care exemption. Click “Access Now.”
6. Click “Continue.”
7. From here, scroll down until you see “WA Cares Exemption” and click “Create an Account.”
7.5 If you have already registered for PFML in the past (see Step 4.5 above), you’ll need to complete a workaround to find the WA Cares Exemption application.
First, access the PFML service where you applied for benefits in the past. Look to the top right corner of the page and click “Add/Switch Account.”
Then click “Create a New Account” under your name. Now proceed to step 7.
8. If you have not previously applied for PFML, you will be prompted to enter your personal information: Name, Social Security number, address, and phone number. Once this is done, you will select the link: “Apply for an Exemption.”
If you have applied for PFML before, you will need to review your personal information and make any necessary changes.
9. Complete the Attestation form. Input your age and check all of the boxes if you have signed up for an eligible private Long-Term Care Insurance policy or qualifying alternative.
10. You will be required to upload proof of identify, such as a photo of your driver’s license or passport.
11. You will see a screen that confirms your exemption application.
All opinions expressed in this article are for general informational purposes and constitute the judgment of the author(s) as of the date of the report. These opinions are subject to change without notice and are not intended to provide specific advice or recommendations for any individual or on any specific security. The material has been gathered from sources believed to be reliable, however Merriman cannot guarantee the accuracy or completeness of such information, and certain information presented here may have been condensed or summarized from its original source. Merriman does not provide tax or legal or accounting advice, and nothing contained in these materials should be taken as such.
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