Log In
Let's Talk

Category: Cash management and budgeting

How to Start an Emergency Fund

Posted on by Hillary Mitchell

An emergency fund is a safety net. While we hope to never fall, it’s there to catch us when life’s unexpected challenges arise. An emergency fund provides a comfortable cushion for your family during a crisis and is the foundation of any financial plan. Here we’ll answer all your questions about where, when, why, and how to start an emergency fund.

Why should I have an emergency fund?  

We can all think of countless “life happens” scenarios in which we incur unexpected expenses. Some may be life-changing (like the loss of a job), while others may be relatively minor annoyances (like dropping your cell phone in the bathtub). The key takeaway is that crises are a part of life for everyone. Having an emergency fund gives you peace of mind, knowing that when the unexpected happens, you’ll be prepared to handle it. 

Having a comfortable emergency fund in place also helps you avoid racking up credit card debt to pay for an unexpected expense or cover a period of lost income. This is especially important if you already carry debt.   

How much money should I keep in my emergency fund?  

We recommend keeping 3-6 months’ worth of your fixed expenses in an emergency fund. Target three months of expenses if you are a dual-income household. Err on the side of six months of expenses if you are a one-income household. You’ll also want to target six months if you are a business owner, and your income is variable or unpredictable.   

Looking at your monthly fixed expenses will help you set a goal and start saving towards that goal. Some websites offer online calculators to help you determine your target amount for your emergency fund.   

How do I start an emergency fund?  

Starting an emergency fund is like any other savings goal: Decide your target amount, then strategize how to get there. Consider a variety of saving strategies, such as directing one-time income (like a holiday gift or tax refund) toward your emergency fund, setting up automatic contributions from your checking account to your emergency account, or establishing a habit of saving on a routine basis.   

Where do I keep my emergency fund savings?  

You have a few options as to where to keep your emergency fund:   

Cash

We’ve all heard the stereotypical “cash in the mattress” anecdote. And some people do like to keep their emergency fund in cash in their homes. While you do have very immediate access to your fund—a benefit for some people—there is no opportunity for your money to grow and it isn’t as secure as it would be in a bank or investment account.

Bank account

Keeping your emergency fund in a checking or savings account offers easy access through a debit card or to pay off your credit card, but it typically earns little to no interest.

High-yield savings account

This is generally where we recommend our clients keep their emergency fund. A high-yield savings account is an FDIC-insured savings account offered through an online bank. The funds take 1-2 business days to transfer to your checking account, with some banks even offering same-day transfers. You will be paid interest by the bank on your balance, and it will be much higher than what a traditional brick-and-mortar bank would pay.

Conservative investment account

“Conservative” in this sense means the account is more heavily allocated towards bonds than it is stocks. With this setup, the account is invested, and it can lose value, even with the conservative allocation. The funds will take 4-5 business days, on average, to reach your checking account in the event you ever need money. However, the market can reward you, and this offers the highest growth potential of all the emergency fund options.

When should I start my emergency fund?  

There’s no time like the present! Having an emergency fund is the first step in any prudent financial plan. Having the cash to cover emergency expenses provides peace of mind while you work towards bigger financial goals.

If you want help budgeting for emergency savings, setting up an emergency fund, or simply getting started with a personalized financial plan, our team at Commas can help.

Financial New Year’s Resolutions: 10 Goals for 2025

Posted on by Hillary Mitchell

The clean slate of a new year often comes with fresh motivation to meet our goals—whether that means reading more, getting in shape, or spending more quality time with loved ones. For some, these goals revolve around a particularly stressful topic: finances. While setting financial new year’s resolutions can feel daunting and complicated, the long-term return and peace of mind is well worth the effort.

To get you started, we’ve compiled a few tips from our team to reduce mental stress and help your financial life run like a well-oiled machine this year. Here are ten financial new year’s resolutions for your 2025:

Get better at budgeting. 

The key to budgeting is tracking and understanding your spending habits. Once you understand your habits, you can make incremental changes to meet your goals. When doubt, use the 50-30-20 rule. That is, you should allocate 50% of your budget to essentials, 30% for discretionary expenses, and 20% to savings.   

Max out your 401K contributions. 

While this is easier said than done, we recommend prioritizing these contributions as much as you’re able. At a minimum, you want to be contributing enough to get the full match from your employer. If possible, try to max out your 401k or employer plan at the annual limit ($23,500 for 2025).   

Automate your savings. 

Set up your accounts so that part of your paycheck automatically goes to a savings or investment account before you have a chance to spend it. You might also consider setting up different savings accounts for different goals. For example, an emergency fund account (which should be a top priority) can be separate from your vacation planning account.   

Update your estate plan and will. 

Ensuring your estate plan and will are up-to-date relieves the burden of making difficult decisions in a crisis. If estate planning feels overwhelming, don’t worry. Your Commas advisor can help you get connected to the right resources and ensure you have beneficiaries where appropriate. In the meantime, start small by creating a list of your personal and financial information and accounts, as well as your passwords, and put them all in a secure place.  

Pay attention to what conversations you have about finances. 

Every household’s approach to their finances is different. Whether you manage your finances individually or have shared accounts with another person (or people, if you have children), identifying the culture around money in your home can be a good early step in decreasing stress and finding financial peace of mind.  

Try asking yourself these questions:

  • What truly matters most to me, and how well do my financial decisions support those priorities? 
  • How do I/we make decisions about spending, saving, and giving, and what does that reveal about my/our shared priorities and values? 
  • Do we have open and honest conversations about money, or is it a source of tension in our home? 

For parents: 

If you do have younger children, you might consider using an app like Greenlight to offer an allowance and help them start understanding financial basics like spending, saving, and giving. Getting started young allows your kids to make (and learn from) financial mistakes while the stakes are still low, in a safe environment.  

If your children are teenagers or young adults and require less supervision, conversations will shift to managing money earned at a job, saving for college, or filing taxes. Talking about money with kids of any age shows you’re comfortable discussing finances with them—and opens the door for them to come to you with financial questions.   

Read (or listen to) a great book. 

Use some time this year to explore literature on financial management, investing, and market history. We particularly recommend The Investment Answer, The Opposite of Spoiled, The Psychology of Money, and The Millionaire Next Door.  

Track all your charitable giving. 

With some smart planning, you can increase your charitable giving by using available tax benefits. By taking time to educate yourself on the benefits of charitable giving, you can gift more by gifting smarter.  

Don’t let the content stream overwhelm you. 

With an incredible amount of content and current events coverage more accessible than ever, it’s often difficult to keep panic—or, at least, a constant sense of anxiety—at bay. Today’s financial news might seem urgent, and the markets may fall, but it’s the long-term view that matters most when it comes to investing. We know the markets reward discipline and resilience. Before you act on what you come across on your newsfeed, take a step back and refocus on your end goal.  

Don’t wait until April to do your tax planning. 

Rather than waiting until the last minute to scrounge up paperwork, spend some time thinking ahead about what you’ll need to file your taxes. This mindset may also end up saving you money, as some tax benefits can be gained by taking certain actions prior to December 31.  

Add this bonus financial new year’s resolution: create a file system (if you don’t already have one) to keep your tax paperwork handy throughout the year, especially if you work for yourself or run a business. 

Connect with a financial advisor. 

Financial advisors aren’t just for soon-to-be retirees. In fact, if you’re in the early or middle stages of your career, a relationship with a trusted financial advisor can make a significant difference to your future by helping you circumvent commonly made mistakes and stay on track with your goals. 

Having an experienced professional who can take an objective view of your financial situation and guide you through complicated financial decisions like major purchases, long-term savings, or equity compensation elections can help you make the most of your wealth accumulation years—and provide peace of mind along the way.  

If you have found yourself setting a goal to ‘get your finances in order’ for another consecutive year, it may be a good time to talk with a professional! At Commas, we love to work with people who are motivated to make the most of their income—even if they’re not sure where to start. If that sounds like you, we can help. Let’s talk. 

Maximizing Your Charitable Giving

Posted on by Kelsie Joos

When it comes to giving back, there are a few tax-efficient strategies to make the most of your contributions and maximize your impact on the organization.

1️⃣ Qualified Charitable Distributions (QCDs): If you’re over 70½, the IRS allows tax-free IRA distributions directly to charity, reducing your tax burden and required minimum distributions!

2️⃣ Gifting Appreciated Stock: Instead of selling highly appreciated stock and paying capital gains, donate it directly! The charity pays no taxes, and you avoid capital gains, amplifying your impact.

Additionally, if you’re an Ohio resident, learn about the dollar-for-dollar Ohio SGO tax credit to directly support educational institutions here.

“When it comes to charitable giving, sometimes it can be something that kind of gets put on the wayside in terms of different things you can do in order to maximize your charitable giving. We have lots of clients that are charitably inclined and what we’re able to do is just maximize that gift by employing different strategies.

One of the strategies is called qualified charitable distributions. If you’re over 70 and 1/2, the IRS actually allows you to make tax-free distributions from your IRA to charitable organizations. And what this does is when you’ve been saving into your IRA, you’ve always been deferring those taxes so when you make this charitable distribution, you actually never pay taxes on it yourself and the charity never pays taxes on it. It’s a way that you could marginally increase the way that you’re giving. Another benefit to using qualified charitable distributions is that it this can ultimately lower your RMS your required minimum distribution. The more you get out of that IRA tax free and the more money giving from your IRA is lowering the required minimum distributions and ultimately lowering the amount of taxes you’ll pay on those dollars.

Another way to give charitably while maximizing tax efficiencies, is giving appreciated stock. A lot of organizations these days are able to take charitable donations in cash, but also in appreciated securities. What can happen is you’ve been gifted, maybe some really appreciated stock some legacy stock from grandparents or parents or maybe you bought stock years and years ago and you’ve never sold it and it’s been growing all these years. Now there’s a lot of built up capital gains in that fund, where if you were to sell it you, pay capital gains tax versus if you gift that share to charity, they receive it and do not pay taxes on it and you also have never paid taxes on that appreciation.”

Choosing Between an HDHP and a PPO

Posted on by Kelsie Joos

Choosing the right health plan is based on your family’s needs and can make a big difference for your family’s healthcare costs.

An HDHP (High Deductible Health Plan) is ideal for healthy families who don’t often visit the doctor, offering lower premiums and the option to save tax-free with an HSA.

A PPO (Preferred Provider Organization) is great for families with more frequent medical needs, providing predictable costs per visit but higher premiums.

Not sure which plan fits your family? Your Commas advisor can help guide you through the decision during open enrollment.

“A high deductible health care plan or HDHP plan is one where you pay for all of your medical visits and procedures out of pocket in, generally, exchange for a lower premium each month or paycheck. The reason why these plans are called high deductible is exactly that. You have the opportunity to pay more out of pocket if you do frequent the doctor than say another health care plan. But that exchange is having a lower monthly premium. A PPO plan or a preferred provider organization health care plan is one where you pay specified costs for each visit or procedure and you know that ahead of time. However the trade-off, unlike the high deductible plan, is those premiums can tend to be more.

High deductible health care plans are great for families who are generally healthy, maybe don’t frequent the doctor as much. Which is great for those families because you’re not going to the doctor so you’re not paying out of pocket costs and also so you’re having lower monthly premiums. So all in all, if you’re healthy, that means more money in your pocket each month through each paycheck. With a high deductible plan you also have the option to use what’s called a health care savings account or an HSA account and how those work is you put money in pre-tax and if you’re using those to pay medical expenses they’re also tax-free. So essentially you never pay taxes on the money that you’re using to pay medical expenses.

A PPO plan is great for families who maybe need to visit the doctor or have more procedures done throughout the years because those costs of what that will be are known before even walking into those appointments so it can help families who may frequent the doctor more to plan financially how to pay for those costs. When it comes time for open enrollment your Commas advisor is here to help you decide which plan might be best for you and your family.”

Commas Advisor Nate’s Budgeting Approach

Posted on by Kelsie Joos

Creating a budget can depend on what works best for you based on your financial goals, spending habits, and personal preferences. Commas advisor Nate approaches budgeting by prioritizing saving first and paying essentials like rent, groceries, and loans. He then gets to spend whatever is left guilt-free!

“The way I think about budgeting is: I take a very reverse budgeting approach. So I look at: what do I need to save first? What money is already going out the door in terms of maybe rent or mortgage payments, groceries. Do I need to save in my Roth IRA? Do I need to save to pay down student loans or anything like that? And then, anything that’s leftover after that I can freely spend money on. I think that makes budgeting a lot more fun and simple rather than saying: this is how much comes in each month and then here’s how much I cans pend on clothing or fun money. Whatever’s leftover I can spend wherever I want guilt-free and it doesn’t matter.”

2024 Contribution Limits

Posted on by Kelsie Joos

401k, HSA, and IRA contribution limits have increased for 2024, giving you more opportunities to boost your savings! As the halfway point of the year approaches, now is a great time to review your current savings rates and adjust accordingly.

“New contribution limits for 2024 for 401k, HSA, and IRAs:

401k contribution limits have increased from 22,500 to 23,000 for the 2024 tax year. The catch-up contribution for people who are over 50 or turning 50 in 2024 is 7,500. Now the entire plan contribution limit is up from 66,000 to 69,000, so this includes your employee contributions, any match that your employer gives you, as well as any after-tax contributions that you would be making. So if your plan offers a mega backdoor Roth strategy or after-tax contributions or in plan Roth conversions, this is where that would come into play.

Traditional IRA and Roth IRA contributions have increased from 2023 to 2024. Instead of $6,500, you can now get $7,000 into those accounts. If you’re over 50 or turning 50 in 2024, you can get in an additional $11,000. In order to contribute directly to an IRA you need to be under the income limits. For married filing jointly filers, that limit is $240,000 and for single filers it’s $160,000 so once you get to that point, that’s when you want to talk to your advisor about possibly doing a backdoor Roth IRA strategy.

If you’re in a high deductible health plan you have access to contribute to something called a health savings account or an HSA. The contribution limits have increased from 2023 to 2024. If you are are in a family plan, you can now contribute $8,300. If you’re in an individual plan, you can now contribute $4,150. If you’re over 50 or turning 50 this year, you can get an additional $1,000 into that account. Now remember, these are total plan limits so if your employer gives you a match, that would be included in that dollar amount.”

Financial Planning for Vacations

Posted on by Kelsie Joos

Planning your dream vacation starts now! Here’s a tip: instead of scrambling to pay for your trips last minute, why not save a little each month?

1️⃣ Estimate your yearly travel expenses.
2️⃣ Break it down into a monthly savings goal.
3️⃣ Automate savings into a high-yield savings account.
4️⃣ Enjoy guilt-free vacations knowing it’s all covered!

Even if you don’t have travel plans yet, we recommend still saving ahead. That way, you can pack your bags stress-free when the opportunity arises.

“One fun conversation we have with a lot of clients is financial planning and helping you plan for vacations for the year. Sometimes people will come to us and just say “I booked the vacation and I’m going to pay for it over the next couple months,” and so what we typically recommend is let’s try to first figure out how much are you going to spend in the year on vacation and then once we know that are we able to back up into a monthly savings amount so that we can just automate savings into a high yield savings account.

So we’re putting $300 into the high yield savings account every month that’s earning us 4% to 5% and then when that vacation comes up later in the year, I can just pull that money out and I know it’s taken care of. Or even backing into if I have a big trip this year I’m traveling internationally, how much do I think that’s going to cost? Looking at lodging, airfare, transportation, food and then maybe even adding an extra 1 to 2 thousand on top of that just to give you peace of mind. And then backing into that monthly savings number and saving money that way. And then also it’s powerful if you don’t have travel planned or trip planned still saving so that when it does come up you know the money’s there and you can go guilt-free.

If you don’t want to save every month for travel maybe it’s just: I know all my other goals have been taken care of through monthly savings and when I get a lump sum, maybe through a bonus or other form of lump sums, you just throw that into a travel bucket and you know the money’s there and that it can be taken care of.”

Tying Equity Compensation to Your Financial Goals

Posted on by Kelsie Joos

Receiving company stock as part of your compensation package is a great perk offered by many companies. To maximize this benefit, it’s essential to plan ahead and make the most of your equity compensation by aligning it to your own financial goals.

“One thing I like to help clients think about is tying their equity compensation to their financial goals. We’ve had many clients who will use the proceeds from their stock awards to purchase a new home or to fund their kids education, so it’s really important to have a plan for your equity compensation and to know what you’ll do with the proceeds when you receive them.”

Should You Put Less than 20% Down on a Home?

Posted on by Kelsie Joos

Buying a home doesn’t have to mean sacrificing your retirement goals! With PMI becoming more affordable and various loan options available, you might not need to put 20% down. Talk to a financial advisor to find the best balance for your savings goals.

“When it comes to saving for a home, it can be a very overwhelming and daunting conversation to have and a lot of times you’re thinking, ‘How much do I really need to save for my down payment for a home?’ Typically, you’ve heard save 20% for a down payment on a home. A lot of times, this is directly related to avoiding PMI insurance, which is an additional insurance that banks want to charge you when you don’t have 20% of equity in your home. But, what this can do is actually lead you to maybe giving up some of the retirement goals that you could be saving for as well as your home down payment goals.

Nowadays lenders are now really making sure that borrowers are vetted with making sure that you’ve had two years of consistent income, that you have a good debt to income ratio. Because of this, the PMI insurance has actually really come down and become more affordable than it used to be. So it could be that saving 20% doesn’t necessarily make sense for you and that you could get into a home with maybe 15%, 10%, 5%. There’s actually conventional loans that you only need 3% down. There’s a lot of government loans and programs where you don’t have to have the traditional 20% down payment so it’s really important to have a plan to be talking to a financial advisor in order to see what is the best down payment for you it can really depend on cash flow, long-term savings goals, all these different things.

You don’t have to put retirement on the side or the back burner in order to get into your dream home. Having these conversations with a financial advisor could really help you determine the best balance between coming up with a home down payment and saving for your short-term and long-term goals.”

You’ve Got the Job, Now What?

Posted on by Kelsie Joos

From a young age, it’s all about studying hard, getting good grades, and landing a great job. But once you’re in the workforce, there’s not one right answer for how to handle your money. Schedule a meeting with Commas to let us guide through achieving your goals.

“My entire life started with, in school, focus on doing the things you need to do: studying and and getting good grades so that eventually you could get into a good college and get scholarships. And then in college, it’s continue to do the same things in order to get a good job so that you can pursue what you’re interested in but also make some money. Then it it kind of stops and and you’re thrown out into the world and you have a job and and you’re accumulating money but so many people don’t have a next step.

It’s crazy because you’ve spent all of that time leading up to getting this job and and getting a paycheck and then it’s kind of an open world on on what you do with it. Everybody’s experience with money is different and some people are natural savers and some people like to spend more and you can make mistakes to the extremes in either direction but financial security is about helping people find that balance of enjoying what they have next but saving prudently so that you can live the same type of lifestyle later.

It it doesn’t come natural, and there’s all this attention on the front end of studying, getting good grades, and getting a good job but there’s so much less attention on on the back end of that and that’s that’s where we step in.”