New state and federal laws could help you save more in 2020


ATLANTA, Ga. (WSAV) – As we kick start the new year, better budgeting and saving more money could be one of your resolutions.

Now, thanks to new federal and state laws, you could end the year richer.

Ted Jenkin believes leaner budgets lead to fatter wallets.

“After diet and exercise, money is the number three new year’s resolution. The average American family has $7,000 in credit card debt.”

Jenkin says to pay off your smallest debt balance first.

“My biggest advice to Americans is to perform plastic surgery, is to keep two credit cards and cut up the rest, but don’t cancel them.”

He recently wrote a book called “The 21 Day Budget Cleanse”.

“You’re going to get a year end credit card statement,” Jenkin said. “Look at recurring subscriptions and credit card services and cancel them.”

Jenkin also said the average American family goes to the grocery store 14 times a month. He suggests challenging yourself and only going once a week with a list.

Insurance agent, Rajesh Jyotishi, wrote “The Money Talk” and says you should try to have multiple sources of income.

“The new year is a great time to review all of your finances: your insurance policies, your wills, your trusts,” Jyotishi said.

Jyotishi also says you should save six months of your salary in case of an emergency.

“A new Georgia law now allows for bigger tax exemptions when it comes to college tuition. Plus, the IRS has increased its contribution for 401k limits so you can put up to $19,500 pre tax and an additional $6500 if you are older than 50.”

“If you are in the 10, 12, 22% bracket, I’d do ROTH. If you are on the top which is 37% then do the pre-tax option. At least contribute to your 401k if your employer is matching. That’s free money that’s coming your way and you are missing out on the contributions.”

Below are some 2020 budget tips from Ted Jenkin, CEO of Oxygen Financial.

  • Determine how much to save every paycheck
  • Figure out if and where to invest your money
  • Develop and stick to a budget and break down your savings
  • Figure out your credit score and pay off debts
  • Start tax preparation early and don’t wait till the April deadline
  • Create a list of taxable information in a spreadsheet and save all receipts
  • Create a realistic savings goal every month
  • Pay off major debts like credit card debts or anything with high interest rates
  • Do research on companies if you plan to invest in stocks

Q&A with Jenkin:

What do we think about the stock market in 2020 with it being an election year?

Historically, the stock market fares well in election years, but had an abysmal year in the recent 2008 election and didn’t fare so well in 2000. The best advice after a banner year in the stock market to reset your goals and asset allocation. A good rule to use is the rule of 100 if you want to keep it simple. Just take your age and subtract it from 100 and it is about what you should have in stocks and the remainder in bonds. It’s just a simple rule.

What are the new tax laws/changes nationally and in GA for 2020?

  • The SECURE Act is the big one
  • Required Minimum Distributions now extended to the age of 72
  • Inherited IRA’s by non spouses will be subject to be depleted over 10 years removing the ‘stretch IRA’ planning technique
  • Part time workers who work 500 hours for three successive years in a row can participate in 401k plans (still must be 21)
  • New parents can take money out of IRA plans without a penalty up to $5,000

What are the best ways to do plastic surgery and clean up budgets for 2020?

  • Use your existing frequent flyer points- stop waiting for a rainy day.
  • Get down to two credit cards. Don’t cancel your card that you cut up during plastic surgery, but you shouldn’t need more than two
  • Pay off the lowest balance credit card first
  • Roll your payment from that card into the next card until you pay off all the cards
  • Consider a zero interest balance transfer if you can qualify

There are seven tax brackets and you need to determine one thing: Do I pay tax now or pay tax later?

  • If you are in the lower tax brackets 10%, 12%, 22%, the Roth is likely a good option unless you really believe tax rates are headed higher
  • If you find yourself in the tax brackets that are higher like the 37% level, you might want to consider pre-tax
  • If you want to hedge your tax bets then split your money 50/50

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