Nothing says “I love you” like money. All kidding aside, here are some ways you can express your affection and help your Valentine’s financial health.
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Speaker 1 (00:07):
Welcome back to another episode of 30 Minute Money, the podcast that delivers action-oriented smart money ideas and bite-sized pieces. I'm Scott Fitzgerald at Roc Vox recording in production sitting with Steve Wershing of Focused Wealth advisors.
Speaker 2 (00:20):
I just wish people could hear what happens on the mics before we record this, because some of it is hilarious.
Speaker 1 (00:27):
That's going to be for extra special paid subscribers who want the bonus material, who
Speaker 2 (00:31):
Want the outtakes. Exactly,
Speaker 1 (00:32):
Yes, the outtakes.
Speaker 2 (00:34):
Speaker 1 (00:35):
So while we're recording this, it is in February of 2024, so that big day is coming for you. Love Birds.
Speaker 2 (00:43):
That's right, that's right. Valentine's Day on its way. Of
Speaker 1 (00:46):
Course. No, it's my birthday. My birthday's on the 16th, by the
Speaker 2 (00:48):
Way. Well, now I have to think of what kinds of things I can give you for your birthday. So Valentine's Day. So of course I know the first thing on everybody's mind is what, Steve, what kind of financial gift can I get my loved ones for Valentine's Day? So, because that is the burning question on everybody's minds, that's what we're going to talk about today. All kidding aside, sometimes people want to be able to do something good financial for their loved ones, and there are some things that you can do. So I thought that we could cover a few of those things just in the event that it gives anybody an extra idea or two. And not
Speaker 1 (01:25):
To get off too far off track, but you remember the movie, the Shawshank Redemption, and the big thing with how Andy Frain gets in, how he's discovered basically by the warden, is that the chief guard, the captain of the guards, is complaining that he was left a lot of money. And Andy Frain says, well, you can give it to your wife and avoid all the taxes. Do you remember that part?
Speaker 2 (01:49):
Speaker 1 (01:50):
Yeah. And you're kind of like, okay, whatever, pal.
Speaker 2 (01:53):
Well, that's actually an upcoming episode where we talk about married filing separately. All
Speaker 1 (01:57):
Right, so that's a teaser. So stay
Speaker 2 (01:59):
Tuned, everybody coming up in the next few weeks.
Speaker 1 (02:02):
Alright, so what can I give my wife for? I almost said Thanksgiving.
Speaker 2 (02:08):
You can give this anytime of year, Scott, whenever you want to give it to her Valentine's Day. Sometimes you want to either not do the roses and chocolates or you want to do something beyond that. So there are some little things that it's not rocket science, but sometimes people don't think about it. So for example, if you have a significant other, or even have a child or a spouse who has some significant loans like student debt or something like that, you can make a loan payment for 'em. And that's just a nice thing. That's something that they would have to do and now they don't have to do it. So they might have a little bit more money to splurge on themselves, or they might just be getting ahead on their schedule a little bit or something like that. Just a simple little thing. Again, it's not rocket science, it's not a fancy financial strategy, but sometimes people don't think about that. Yeah,
Speaker 1 (02:56):
And that's something that kind of shows that you put a little thought into this thinking outside the
Speaker 2 (03:01):
Box. That's right. Exactly. And especially if people are struggling with making their payments and stuff. It's a way of saying, I care. Now, in terms of talking about things that people care about, you can also make a deposit to a donor advised fund for a loved one. So if there are causes, of course you can make a contribution directly to a charity that is meaningful to somebody, but if they do a lot of charitable stuff, then you can also make a contribution to a donor advised fund, and that way that person can direct it to whatever cause is important to them, whether it's important to them generally, or if it's important to them right at the moment, they can direct it themselves. But that's something else that you can do. Now if we want to talk about something for them and for their future, you could, for example, and you could do this for a spouse or you could do it for a child. I'll give you a story about a child in a minute. You can make a Roth contribution for somebody. Now it has to be on their behalf. They still have to qualify for it.
You can't do a Roth contribution based on your financial picture. It has to be based on their financial picture. But the point is that you can give them the money to contribute to a Roth IRA.
Speaker 1 (04:17):
So my wife can give me money that goes in my Roth that's not taken out of my paycheck or whatever she can.
Speaker 2 (04:26):
Yeah. Well, so two things we can talk about here. One is that they can make a deposit into your Roth and the institution that holds the Roth IRA doesn't really pay much attention to where the money comes from. You just have to be able to qualify to do it your own on your own. Okay? Now there is a twist on that in that if your spouse does not work, you can make a spousal Roth contribution. And what that means is not that you are putting the money into the Roth, which usually is how it works, but what it means is that you're putting money into a Roth of somebody who doesn't have the income to qualify for a Roth because you can't contribute. You can only contribute to a Roth up to a hundred percent of your income or 6,000 bucks, whichever comes first. So if you don't have earned income, you can't contribute to a Roth.
However, if you're married to somebody who makes enough money, that 6,000 or however much you want to put in the Roth is less than a hundred percent of your the spouse's income. You can make a spousal contribution that's kind of different than what we're talking about here. This assumes that they're making enough, they could have contributed to a Roth on their own, which we should also mention that nobody can have Roth contributions in excess of the legal limits. I mean, if somebody's already contributed the legal limit to the Roth, you can't then add more to it. That would put them over the limit. Gotcha. But if you've got somebody who otherwise has not or is not in a financial position to your Roth, you can do that for them. And it's a little gift that helps them for the future getting to be a little bit more fun and a little bit less practical.
You can make a gift of a couple shares of stock for folks. And sometimes first, if it's a child, for example, you can give 'em a couple shares of stock and that introduces 'em to financial investments and might trigger an interest that they follow this stuff. That can be kind of fun. It used to be that there were some companies that you could give that would have perks. People used to give a couple shares of Disney because it used to be that if you were a Disney shareholder, you got big discounts on the theme parks and that kind of stuff. That went away about 20 years ago. Surprised it hung around that long. Yeah, right, exactly. So don't get carried away on that, but one fun one that you can give to somebody, a Southwest airline. So if I said symbol to you or ticker, would you know what I'm talking about? Yes. Okay, good. So the symbol, a symbol is just a one to five letter designation. That is how a stock gets traded on the exchanges. So at t for example, is T for telephone. If you want to buy shares in at t, your broker would put T on the ticket. A fun one that you can buy for people with Southwest Airlines, because its symbol, its ticker is LUV. Oh, isn't that sweet? They love to fly.
So you can give a couple shares of stock to somebody, and it's a little bit trite, but I'll say it anyway. I mean, if you want to say I care and I want to make sure that I take care of you, even if I'm not around to do it, you can buy a life insurance policy for yourself. So if you have not done your financial planning, or if you have a new family or if you have a new spouse or something like that, getting life insurance to protect them for the longterm is a nice way to say I love you. Even if it sounds like a life insurance marketing brochure, which it is now, a lot of times parents, especially mothers, will give Valentine's Day gifts to their kids. And so sometimes you can mix that in with a financial theme as well. So if you have a little kid, you can give 'em a piggy bank for Valentine's Day and put a couple of coins in it so that it makes noise when you shake it and sort of get them starting to think about, oh, well, if I have a little bit of change hanging around, I can put it in the piggy bank and you can talk to 'em about what happens over the long term.
If you do something like that, if you have a little older child and you want to start getting them into better financial habits, one kind of interesting thing you can do is to buy them a prepaid debit card.
So a debit card, obviously there's no credit involved, it's just it taps into a balance. And if you get a debit card for your bank account, then you can spend as much as you have in your bank account. But you can also buy these prepaid debit cards. So you can buy one, you can buy a $50 debit card and you can spend $50 on it, and then you're done and you have to throw the card away. So if you have a middle schooler or a teenager, you can get them a prepaid debit card. And on some level, without even saying anything to 'em about it, it sort of teaches them that money is a limited resource. And so they got
Speaker 1 (09:10):
50 bucks on there and now they have to decide what they want to spend it on. And
Speaker 2 (09:14):
That's right. So they might get all excited and blow it all at once, and then they experience that regret of not having been able to do something else. And it's funny, but it's a valuable lesson and it's a cheap lesson. I mean, just giving somebody a $50 card and saying Anything you want, sweetheart, you can go get for yourself. And they do that and they realize later it was a bad decision. That's a really inexpensive way to, the more they get to feel that, the more they start thinking about the value of money. And I mean, it sounds funny, but really getting that kind of experiential learning can really be a big deal. So it's not a bad way to go.
Another thing that you can do is, and this is very popular among for birthdays and stuff, you can do it for Valentine's Day as well. It's popular with parents and grandparents especially, is you can put money in a 5 29 plan for a child. So if you've got somebody, if you've got a grandchild who's five or six or something like that, well you can make a small deposit into their 5 29 plan and put money away for their future education. And on some level, it's a gift to the child on some level it's a gift to the parent. So it's less that they would've to do similarly if they're already in school, if they're already using it. You can also make a direct tuition payment. And I say that specifically because if you are a grandparent and you're well to do, if you've got a lot of assets, and one of the things you want to do is gifting as a way of working down your estate, or if you just want to be able to give as much as possibly your grandchildren, making a payment directly to an institution is not a gift.
It's paying a bill. So it's a way of getting around those limitations on taxable gifts every year. So every year you're allowed to give a certain amount of money to any one individual. If you give above that threshold, then it starts coming off of your unified credit for your estate taxes and estate taxes are going to be a bigger deal in about two years than they are now. The limits are likely to come back down again. If you're looking for a way to give away more in a year, making a direct tuition payment is a great way to do it because it doesn't count against that annual threshold for taxable gifts. So that's another thing that you can do. And
Speaker 1 (11:34):
That's because it's a bill. So it could be any bill that you could pay for somebody that would be the same thing.
Speaker 2 (11:39):
Yep, exactly. Interesting. Well, if you pay on a credit card, it would be considered a gift because you're paying to the credit card, but you're reducing someone's debt and someone's debt is a type of income.
Speaker 1 (11:56):
So it can't be something like
Speaker 2 (11:57):
That. No, but if you pay a direct bill for them, if you pay somebody's rent, pay somebody's tuition, pay somebody's car payment, well, car payment would be a loan as well as well. But if you make a direct payment to something that's actually different than making a direct gift or even paying down some debt. Gotcha. So those are all a bunch of different ways that you can involve finances in Valentine's Day, because of course, everything in my life revolves around finances. That's my jam, as the kids will say these days. But really, whatever you do, whether it be financial or not, of course, is give someone something that is something that they would really like, but something that they would not buy for themselves. So Scott, give your wife a spa day.
Speaker 1 (12:46):
And that's really, it's getting more and more common these days. I've noticed in the last couple of years, people getting a sauna certificate for a sauna or a massage or one of those things where they put pickles on your eyes. I dunno what that is, but
Speaker 2 (13:05):
I dunno what kind of spy you're going to man, but I want to see it. I do that kind of stuff for my daughter. My daughter is a doctor and she's now passed her pediatric boards, but she's still in her fellowship for a subspecialty. So she still needs a very stressful, and she's got a baby. So she's got a very stressful life. So I will periodically just give her, I'll call a salon in the area and give her a coupon for a massage or something like that. I want to make sure that she will relax a little bit and she's not really in a position to spend a lot of money on that kind of stuff. So that's the spirit, whether it's financial or not. That's the spirit and that's what we want to do.
Speaker 1 (13:45):
Parenting tips from Steve Waring. That's a good idea. I'm going to keep that one in my back
Speaker 2 (13:49):
Speaker 3 (13:54):
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Speaker 1 (15:20):
Alright, so Valentine's Day gift idea is what's your 30 minute action item? 30 minute action item. Sketch
Speaker 3 (15:25):
Out your Valentine's Day gift list,
Speaker 1 (15:28):
Lots of interesting and important information in this episode. I am telling you thanks for watching and listening to 30 Minute Money. Of course, it's three zero minute dot money. Find us on all the podcast platforms and rate and review. Do us a favor, tell a friend about it and we'll catch you next time on 30 Minute Money. Thanks.