ChooseFI Community Taking Action This Week
My 1% this week is meeting with our financial planner to ensure we’re tracking all our goals AND helping someone else with their 1% better: my younger sister is just starting on her financial “adulting” adventure and this week I provided some (requested) budgeting advice.
Super simple stuff like meal prep instead of going out and what to do with credit cards. But she’s excited to get started. It’s fun to help others!
Wanted to send along a new 1% win, but not one for me. It’s a win for my 13yo son.
Conversations about finances, investing, and FI have always been part of our family. My son told me recently he wanted to learn more about investing and start getting into index funds. He has now read The Simple Path to Wealth and The Psychology of Money. He received some money gifts for his birthday and decided he wanted a chunk of it to go to investing.
We set him up with a Vanguard UTMA, where he is now investing in VTI with a starter lump sum and a monthly auto-investment from his weekly allowance.Finances, much less FI, were a limited part of my childhood. I had to figure out a lot on my own, and have made so many mistakes along the way. Helping my kids have a better understanding of money, FI, and most importantly their agency over their own lives, has been a big priority for me as a dad. My teen taking these early steps is such a big win for his future self.
My 1% better this week is that I increased my 401k contribution by 2% for a total of 16% and then also get a 5% match for my employer. I know most people are decreasing or completely stopping investing due to the market currently, but since I started listening to you 3 years ago, I am confident that the stocks are on sale and therefore I am buying more. I believe this will help me in 5 to 10 years to help increase my retirement savings. Thanks again for what you do and bringing all this knowledge to the general public.
My 1% better was diligently following up for 7 months about an insurance error and finally receiving a $1500 reimbursement to pay down medical costs.
This is both a win and a big tip. If you or a parent lost a spouse and live in a US Community Property State (AZ, CA, ID, LA, NV, NM, TX, WA, WI, or opt-in AK), check your brokerage accounts for the correct step-up in basis. When my dad died in California, my mom’s CPA noticed Vanguard only gave her a 50% step-up on their joint account and none on her individual account. In community property states, both should get a 100% step-up in basis, even if only one spouse’s name is on the account.
We had to call Vanguard and submit a letter to get it fixed. This reduced my mom’s taxable gain on a sale from $24,300 to $10,300.
Takeaway: Don’t assume your brokerage will update the cost basis correctly after a spouse’s death. In community property states, surviving spouses are entitled to a full step-up in basis on community property assets, unlike common law states where only the deceased spouse’s share gets the step-up. Always review your accounts and request corrections if needed. This can save you or someone you care about a lot in taxes.
We just used compost we made over the winter from kitchen scraps and leaves gathered in the yard to prep the soil for our spring garden. It saved us $40 compared to buying lower-quality compost from the nursery. The real payoff, though, will come at harvest time. Last year, our garden yielded about 300 pounds of produce, and high-quality compost was key to that success. Best of all, it turns what would have been waste into something incredibly valuable.