Getting Started: Money 101

We're here to get you started on the fundamentals of saving, investing and understanding taxes. Then you can move onto the fun stuff - higher risk investing, real estate and understanding impact investing!

Start Saving Your Stash

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You worked hard for your money. Let's make sure your fundamentals and your future are covered through saving, all while being able to do the things you want.

Start Small

  • Automation is key. Tuck a percentage of your paycheck into a savings account every month.

  • Put your money into a high yields savings account, which accrues interest while your money sits there.

  • Everyone has different circumstances. Adjust your savings rate accordingly.

50/30/20 Rule

  • 50% goes to your essential needs (rent, food, insurance).

  • 30% goes to your wants (dining out, shopping, hobbies).

  • 20% goes to your high yield savings account.

Increase Your Savings Rate

  • There’s a running theme in the personal finance community that a high salary is not impressive, but instead a high savings rate is.

  • With extra savings, you'll sleep okay because you have cash on hand.

  • According to Statista, the personal savings rate amounted to 7.6 percent in 2019.

Make Your Money Work

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Make your money make more money. Investing is always a bit daunting, but we make it simple. We offer some nuggets of wisdom to make your journey a bit more easier to navigate.

Diversify Your Portfolio

  • One of the most important part of investing your personal portfolio is understanding risk and diversification.

  • Consider investments with varying risk.

  • The younger you are, the more risk and higher reward you can afford, because you can make up losses overtime.

  • If actively managing a portfolio isn't for you, look into an age-based or target retirement funds.

Key Lessons

  • Stock picking is less important than diversifying your portfolio and understanding risk.

  • Past performance does not indicate future performance.

  • Always do your due diligence. Don't throw a large sum of money into the market without doing your research first.  

Take Your Money Further

Learn about Tax Planning

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Proactively understanding certain tax strategies helps you plan for savings, maximize your investment returns and feel less dread during tax season!

Understanding the tax system

  • First of all, plan to start filing taxes well ahead of the typical April 15th deadline.

    Start saving tax-related forms year-round, such as donation receipts, W-2s, 1099s, etc.

  • Understand how the U.S. marginal tax brackets works. In general, the more money you make, the more you are taxed. We explain and provide additional reading in this post about the 2020 tax season.

  • Once you understand your taxed income, you can begin to look at common tax deductions. The federal, state and city governments use these deductions to incentivize certain activities, so it's fair to use them to lower your tax rate

Learn about capital gains vs. income tax.

  • Capital gains are typically taxed at a lower rate than ordinary income. Capital gains tax ranges from ~0-20% whereas income taxes reach 37%. Moreover, you have more control over your capital gains tax rate!

    Learn more about capital gains and factor taxes into your stock trades to maximize returns!

  • Capital gains also apply to real estate investments. There are certain tax benefits to home sales of your primary home caveats laid out here.

  • While you're at it, learn about mortgage interest deductions!

Make the most of your donations!

  • First, recall if you usually take the standard tax deduction or itemize. Your accountant or tax service should have the answer, and this impacts your tax strategy.

  • Understand that tax guidelines can change each year. Due to CARES Act 2020 changes, tax payers who do not itemize donations can now deduct up to $300 in donations from their federal taxes in addition to the standard deduction.

  • Look into Donor-Advised Funds or Impact Investing - our guide is coming soon! These strategies help you maximize impact and plan around taxes.

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