Transcript for 2013 Financial Makeover Advice
So what does the new year have in store for you and your wallet and where should you be investing to maximize your money in 2013? Here to get you a fresh start in the new year is personal finance expert farnoosh tharabi. Happy new year. Happy new year to you. Not necessarily for a lot facing the "d" word deeply in debt. What advice do you have. Attack it sooner rather than later. This time last year they were still dealing with credit card hangover. Hoping we'll be able to rerace this by february, march. To do it pay more than the minimum, three or four types it and if you need help get help. There's a lot of good systems out there. Debt management program like the national foundation for credit counseling, they will look over your budget. They will be your advocate to get you out of debt slowly by surely. Also the time of year where people think about buying a home. Interest rates are low but real estate prices are expected to keep climbing throughout the year. What do you think people sho consider when they're looking to buy. Okay, so you want to have all your financial ducks in a row. It's tempting to jump in because the expectation that they will rise by the later part of this year. So people say we have to act fast but you really want to make sure you have a steady job, that you have a good credit score to capitalize on interest rates and when you're buying the home, it's not a knee-jerk reaction to a headline. It's that you want to stay in the home for five years or ten years so really be prudent before jumping in. All right, also the start of the year, millions of workers are now picking out their benefit choices for 2013. It's a very confusing time so they're deciding how much salary to put into health care flexible spending plans and what's your advice? So first know the rules and the new rule is your flex SPENDING ACCOUNT, THESE FSAs Which are tax-friendly accounts, put aside money to pay for out-of-pocket expenses like co-pays and deductions that will be limited to $2500 per person per year. So if you and your spouse are -- HAVE ACCESS TO FSAs, BOTH SHOULD Tap into these and use the accounts. We often find people have some money left over and that money goes right back to your employer so make sure you're taking ADVANTAGE OF YOUR FSAs. What about changes in retirement accounts? This is a silver lining. I.R.A.s AND 401(k)s, THE Government is increasing taxable contributions every year so for I.R.A.s, IT WAS $5,000, NOW IT'S $5500 PER YEAR AND FOR 401(k)s, It's jumping 3% to $17,500 per year. The advice here you want to do as much as you can. We know the story that people are not planning well enough for retirement so take advantage. It's a tax deduction. Speaking of planning how about money-saving tips? We could use thos my biggest tip for anyone trying erase debt, save more is to stick with cash. Credit cards arey nvenient. But cash limits you physically and also psychologically. When you pay with cash at the restaurant or at the department ore -- it hurts more. It hurts and that's a good thing if you're trying to get into that behavior of sticking to a budget and I'm getting out of debt. Words of wisdom, farnoosh torabi, happy new year. You too.
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