My top five financial woes 💰

Hey gang, sorry for dropping off. I had some issues come up that have now been resolved. Bec’s Bux is back on track!

Now in my 17th year as an expat, the majority of my time has been spent in the USA. The land of opportunity, hard work 🫠 and also money. Through the years, I have become more privy to my own financial woes and learnings. Below are my top five wisdom nuggets that I would like you all to learn from.

⭐ 1. Take the company match on the 401K come hell or high water

This feels like an obvious one, but I recall in my first job in the US, I crossed out 'NO' on the 401K contribution form. My mind was in a place of ‘I’ll be here for 2 years’. In retrospect, it was literally throwing money down the toilet.

What is a 401K and why should you sign up for one, you ask? It's your best shot at a pension (of sorts), however, not all 401K's are created equal, and not everyone has access to them. If you are lucky enough to work for a company that offers one and matches your pay up to a (small) percent, sign up immediately. This money is then taken from your paycheck pre-tax and will be invested on your behalf. Once you take it out in retirement, you are taxed then. You can personally contribute $23,000 per year, and the company match is in addition to this.

If you maxed out the 23K from age 29 into a standard S&P 500 fund, at 65, you would have almost 3 million dollars. Plus, your company’s match would be compounding too

⭐ 2. Signing up for a managed pension

This was a hard one to learn, with good intentions, I paid into a managed private pension. Not understanding the full gravity of what I had signed up for, I was paying a 1% management fee. Years went by of diligently paying into it, but it wasn't growing. Now, in hindsight, it was being eaten away with fees.

I recently withdrew the money (with a penalty, of course), and I now manage it myself. Based on this experience, I will forever be distrustful of financial planners, experts, and services.

⭐ 3. The HSA miracle

I discovered the power of a Health Savings Account (HSAs) in my last corporate job. It’s the government's way of helping you with those pesky medical bills. The limit you can put into it is $4,300 (as an individual) a year pre-tax, and you can use it to pay any number of medical-related expenses (see this link) tax-free! I’m a generally healthy person, but the odd twisted ankle and blood panel can add up fast. Paying for them tax-free is a huge benefit.

⭐ 4. Fee’s on checking accounts

Ok, you just got off the plane and work has set you up with a social security and bank account (Chase, Bank of America, Wells Fargo, etc) to have your first paycheck go into. Unfortunately, these banks tend to be predatory with their charges. I personally manage my money with multiple accounts to keep track of different monies for various purposes (investing for the short term, tax, holiday savings, etc.). I was surprised to find out I would be charged $12 per month for each account, as well as ATM fees, among other random charges.

Now, I bank with Charles Schwab. No monthly fees and no ATM charges worldwide. Other good fee-free options include SoFi and American Express. And yes, I have multiple accounts for different “pots” (short-term investing, taxes, holidays).

⭐ 5. Not setting up a ROTH IRA sooner

A Roth IRA is the US version of the UK’s StockISA. You contribute after-tax money, but your investments grow tax-free, and you withdraw tax-free in retirement. Previously, I was over the income limit (it's capped based on your income). This year, I’m well below the threshold (sabbatical life), so I will be funding one. I will continue with my Traditional IRA (pre-tax retirement account).

⭐ 5A. Investing in general

Again, this ties into signing up for a 401K. A friend once said to me, you need 50K to start investing. That bad advice stayed with me for a long time. Years later, there I was, buying a single $70 stock at the back of a room of an all-day sign-off meeting.

Of all of the lessons, my biggest learning was to understand and be in control of all of my money. Now I know exactly what funds, banks and stipulations I’m signing up for. Before, I felt stupid asking, and I would eventually get screwed over. I now feel proud to have built a strategy that is working for me while I sleep, vs losing sleep over what is going on with my accounts. Amen. ✌️

*This is NOT financial advice, but more guidance. If you want to discuss further, please email getintouch@becsbux.com*

Bec’s Bux was founded and started as a personal journey to get my financial life in order while living abroad for 17 years.