Many professionals earn a considerably good amount of money but struggle to manage finances. Extravagant expenses, and lavish lifestyles are some of the reasons why you struggle to manage your finances. Or it could be because they do not have an effective financial management system. If you earn low to medium six figures but are not wealthy yet, there is a term for you. It is called HENRYs, meaning High Earner, Not Rich Yet. High tax slabs, extravagant lifestyles, and low savings are some of the reasons why HENRYs do not save money for their future. In her article for Select, Jasmin Sukhnanan shares several tips to manage finances efficiently.
Quick Tips for Better Financial Management
Save in Different Accounts
Many professionals tend to save for their future in the usual workplace 401(k) account. It is better to contribute the same amount to the account from your end. Besides, Sukhnanan suggests that you set up your individual retirement account (IRA). It will help you make investments outside your 401(k). If you want to explore other options, you can look into taxable brokerage accounts, ETFs, index funds, and mutual funds.
Cut Down Your Taxable Amount
If you are experiencing a sudden growth in your taxable account, there are several things you can do. One of the most effective methods is to have a word with your company’s accountants for advice. Besides, you should try to match your 401(k) investment with your company. Health Savings Account (HSA) is another method to lower your taxable amount. HAS helps you save money for medical expenses, and the growth rate is tax-free.
Consult Professionals for Better Financial Management
Finance managers can help you strengthen your retirement strategy and come up with better solutions to your financial management. Experts believe that when you consult finance managers, you often save more money than you initially thought.
Click on the link to read the original article: https://www.cnbc.com/select/high-earners-not-rich-yet-henrys-financial-moves-to-make/?&qsearchterm=financial