Step 3: Making Smart Financial Decisions
Making smart financial decisions is key to maximizing your savings and working to achieve your financial goals as an ABLE account owner. To help make smart financial decisions, the following video provides four tips to help you do just that.
Topics at a Glance
What are the four tips to making smart financial decisions?
The four tips to making smart financial decisions are: …
- Tip 1: Understanding needs vs. wants
- Tip 2: Creating a spending plan
- Tip 3: Maximizing savings opportunities
- Tip 4: Putting the plan into action and sticking with it
What is the difference between a need and a want?
Needs are items we need in order to live. Examples include housing, food, utilities, clothing, etc. (many of which could be qualified disability-related expenses). Wants are items we would like to have but don’t necessarily need them to live. (These could also be expenses for which your ABLE funds could potentially be used.)
What is a spending plan and why is it important?
Spending plans or a budget can be a plan for the funds in your ABLE account. A spending plan is based on numbers. How much money do you bring home each month, through paychecks, public benefits or contributions into your ABLE account from outside sources? And how much goes out as expenses? A spending plan gives you an opportunity to look at your expenses straight on, and it shows you how you spend your money.
- You can rollover funds from a 529 college savings account into a 529A ABLE account up to the annual contribution limit.
- Some states offer a state income tax deduction or credit for contributions into an ABLE account.
- You may be eligible for a Savers Tax Credit when you save in your ABLE account if you are employed.