Contribute to retirement accounts. If you want to hang onto your money, a great way to do that is to spend it before it’s taxed. One form of so-called “tax sheltering” is by maxing out your retirement contributions. Different accounts have different rules and applications, but it’s worth figuring out which will benefit you and your situation the most.
For 2020, for example, you can put as much as $19,500 into your 401(k) before taxes. Workers older than age 50 can make catch-up contributions as high as $6,500. Roth contributions, on the other hand, are taxed, but withdrawals can be made tax-free during retirement.
Consider medical savings accounts. If your employer offers a flexible spending account (FSA) or a health savings account (HSA), open one. The money directed to those accounts can be used, tax free, to cover medical co-pays and other eligible medical expenses. Eligible medical expenses include everything from trips to the kinesiologist and acupuncturist to thermometers, contact solution, allergy pills, acne treatments and, now, tampons.
Just be careful deciding what amount to set aside for medical expenses — there’s a hard deadline for when the money has to be spent and any money not spent is forfeited.
Negotiate with your credit card company. If you’ve got credit card debt — and more than half of those with credit cards do — see if the card issuer will agree to cut your interest rate. If you’re making payments on time, you are in a good position to ask. Let them know that you would rather stay with them than transfer your balance to another company’s card.
