One of the most dreaded days of the year is fast approaching: Tax Day. If you’re anything like me, every April you also scramble to file your taxes the week before (or the night before) they’re due. It’s terrible and sloppy and every April I vow to do better next time. Which is why I’ve started following money-minded influencers to hopefully glean some of their financial prowess.
Financial fitness is a crucial life skill that many of us wait far too long to master. Read below for some favorite tidbits of knowledge I’ve learned from these women offering financial education (not advice).
You have longer than you think to make your annual Roth IRA contributions.
A very common piece of financial advice that you might have heard is to max out your Roth IRA contributions every year if you can. What is a Roth IRA? Well, a Roth IRA allows you to put after-tax money away so that it can grow tax-free; you can withdraw these funds tax- and penalty-free after you are 59 ½ years old. There is however, a limit to how much you can put into a Roth IRA every year which is between $6,000 and $7,000 depending on your age and this is where money educator Amanda Wolf's reminder comes into play: you can invest in your Roth IRA up until Tax Day for the prior year. This tip from Wolfe is a game changer, especially if you are a procrastinator and worry that you missed the boat to make a 2021 Roth IRA contribution. You still have until April 18, 2022, for those 2021 contributions.
More from SwimLife
Don’t sleep on miscellaneous purchases.
Tiffany Aliche, aka The Budgetnista, is a money educator and New York Times best-selling author. Every Friday she posts tips to help people “maximize their paychecks.” This piece of advice stood out: small purchases add up over time. For example, if you spend just $20.55 a day, it adds up to $7,500 a year. Whether you’re contemplating eating out, buying a shirt you didn’t really need, or wanting a new houseplant - thinking about the bigger picture of how our spending ads up is helpful. Aliche reminds us that mindful spending can be great, but mindless spending is where we can cut back, and small regular actions can have huge consequences.
It’s never too early to start investing.
Just as our second learning highlights the compounding effects of small spending habits, this reminder is like its inverse: you can save so much by getting in the habit of investing small amounts regularly. Naseema McElroy, @FinanciallyIntentional, is a single mom on a mission to help you build wealth. In this post,, the registered nurse works to counter the myth that you need a lot of money to begin investing. She explains that it can take less time than you think to have an investment grow to $1,000,000. “If you maxed out a Roth IRA annually at $500/m or $6k/yr it would take you 38 years to reach $1,000,000.” Read her post for other tips to get there even faster.
Refinance when you can.
Kendall from Babe on a Budget provides a lot of resources around financial education, but I especially like her posts on student loan refinancing. About 46 million Americans have student loan debt. Refinancing can generally help you secure a lower interest rate and pay a higher percentage of your monthly payment towards your premium. It’s not, however, the best choice for everybody. Kendall offers lots of advice to help you learn about the particularities of your student loans and help you determine what might be the most beneficial actions you can take for your situation.
Invest where it matters.
Millenial Money with Katie is full of great tips, but this one stood out to me, and is a great reminder for us all: money is not the only thing we should be focusing on and investing in for a great life. Your time, your relationships, and your work are also all areas of your life that require investing and planning in order to feel fulfilled.