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FI Weekly – January 3, 2023: New Contribution Limits for 2023, Net Worth Calc, Better Habits

New Year, New Contribution Limits

Happy New Year!

It’s a new year, so that means there are new contribution limits for retirement and tax advantaged accounts and even if we maxed these accounts out in 2022, we’re back down to $0 contributed in 2023 and are ready to fill the accounts up again.

My family can contribute to an HSA since we have a (very) high deductible health insurance plan.  I saw the recurring reminder in my ToDoIst app on January 1st to max out the HSA, then quickly googled what the new contribution limits are for 2023 ($7,750 for a family), and initiated the contribution via Fidelity.

This all took about 5 minutes and it’s an example of the continued action we’re taking to optimize and make our financials lives better.

What action are you going to take this month to improve your financial life?

Net Worth Calculation for 2022

Speaking of taking action, here’s a timely one:

I think it’s really important to track your net worth on a yearly basis (I personally do it on a quarterly basis but since the year and quarter just ended, this is a nice easy two-for-one to get started!).

Really simple to do:

You can use a free app like Personal Capital, but I like an old-fashioned Excel spreadsheet where I just list out all my assets (every account separately plus major assets like my home and investment properties) and liabilities (mortgages, student loans, credit cards, other debt, etc.) individually.

Then you just add up all the assets and subtract out the liabilities to get your 12/31/2022 net worth.

It takes me about 10 minutes to log into all my accounts each quarter and I find the tracking and accountability of this to be quite valuable.

Better Habits

James Clear, author of Atomic Habits, was a guest on the ChooseFI podcast in Episode 157.

His book is an all-time favorite in the FI Community, and I’ve subscribed to his newsletter since meeting him in 2019.  I just noticed he’s offering a free 30 Days to Better Habits email course and knowing the high-quality content that James puts out, I feel confident recommending you check this out.

It isn’t hyperbole when James says, “Your life today is essentially the sum of your habits. How in shape or out of shape you are? A result of your habits. How happy or unhappy you are? A result of your habits. How successful or unsuccessful you are? A result of your habits.”

Now would be a great time to take action on creating better habits.

ChooseFI Community Taking Action This Week

  • Jacob said, “Our 1% Better was adding a Net Worth section in our budget and calculating our net worth for the first time. We plan on doing this quarterly like you suggest!”
  • Garrett said, “I just booked travel for my first trip to Europe. My wife and I will be flying into London and slowly moving around England, then taking a short flight to Paris before flying back home from there. I used travel rewards to save nearly $4500 in airfare with just 80,000 Chase Ultimate Rewards points! Thanks, ChooseFI for putting me on a path to make our dream vacation come true without breaking the bank!”
  • Luisa said, “My 1% better is that, while visiting a friend in Hawaii, we invested their first $100 in a Roth IRA in SWPPX (Schwab’s S&P 500 index fund with a 0.02% expense ratio). They had finally opened an account and didn’t know what to do with it. It was a win visiting Hawaii, staying with friends, spending time with friends and helping them start investing!”
  • Haley said, “My 1% better this week is officially launching my new business teaching a 6-class personal finance course for women. I can’t wait to help other women gain an understanding of their current financial position and how their spending, saving, and lifestyle habits affect their financial future – using the Choose FI principles. It took major life changes this past year to have the time and flexibility to make this passion project happen, including moving to a lower cost of living area, and I’m so excited!”
  • Michael said, “My 1% better this week was adding two-factor authentication to the financial apps where I hold my taxable brokerage accounts in. It is such an overlooked extra layer of security that can provide much protection. After listening to Episode 397 Securing Your Financial Life with Tom, I wanted to take action.”
  • Erin said, “My 1% this month was increasing our retirement contributions and beginning to listen to podcasts on minimalist lifestyle. I have been really surprised by how much of FI is NOT financial. It’s learning to be happy with what I have and simplify my life.”
  • Matt said, “My 1% better was for my wife and me to turn off mobile data on our cell phones. We didn’t realize we were spending $50 and $70 per month on data. If I need notifications or maps I toggle the mobile data on, but otherwise it stays off. It also provides a bit of peace while I transit between wifi locations e.g. home, work, etc.”
  • Lisa said, “The 1% (literally) I’m working toward right now is moving away from my financial advisor with a 1% AUM fee to a DIY brokerage.”

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