Smart Investing, Lasting Impact: Tax-Efficient Giving, Teacher Planning, and Financial Wellness Strategies

Financial wellness isn’t just about numbers it’s about clarity, consistency, and making choices that align with your values and goals. Whether you’re a teacher seeking guidance, a new graduate navigating housing expenses, or a parent teaching your child about money, today’s strategies need to reflect both reality and purpose.

Charitable Giving After Tax Reform

You might assume that reduced deductibility under new tax laws would curb charitable giving but the data says otherwise. Americans continue to give generously, often driven more by values than tax breaks. However, the tax rules can still impact how and when you give:

• The impact varies depending on whether you donate cash or appreciated assets.
• Those giving larger gifts or with complex portfolios should consult a tax advisor to optimize their contributions.
• Charitable giving remains a key strategy not just for doing good, but also for smart financial planning.

Teachers: Choose the Right Financial Advisor

Teachers face unique financial challenges often balancing modest salaries, public pensions, and complex retirement plans. Here’s what to look for in a trusted advisor:

• Choose a Registered Investment Advisor (RIA): They are legally obligated to act in your best interest.
• Avoid commission-based salespeople: Their advice may be influenced by product incentives.
• Interview at least three advisors: Make sure their approach aligns with your goals and comfort level.

This guidance applies to anyone, but especially educators who are often targeted with products that may not serve their long-term interests.

Teaching Kids About Money: Lead with Love, Not Fear

When it comes to money conversations at home, the tone matters as much as the content.

• Don’t frame money as scary or stressful it leads to avoidance and anxiety later.
• Teach kids the basics: how to spend responsibly, save consistently, and understand value.
• Create real-life lessons: use allowances, saving jars, or even letting them “budget” for a family night out.

The goal isn’t just financial literacy it’s financial confidence.

Young Investors: Go Broad, Not Bold

If you’re just starting to invest, the temptation to pick “hot stocks” or time the market can be strong. Resist it.

• Choose low-cost ETFs like VTI or SPY for broad market exposure.
• Consider your risk tolerance and time horizon to guide asset allocation.
• Avoid high-turnover funds they can increase costs and hurt returns.

The goal isn’t to beat the market it’s to stay in the market long enough for compounding to work its magic.

Graduates: Keep Housing Costs in Check

Just out of school? Here’s your housing rule of thumb: spend no more than 30% of your income on rent.

• Consider roommates to keep costs down and flexibility up.
• Carefully review lease terms, responsibilities, and roommate stability.
• Lower housing costs give you room to save, invest, and say yes to future opportunities.

Financial flexibility in your 20s pays off in your 30s and beyond.

Retirement vs. Credit Card Debt: Prioritize the Future

It may feel logical to tackle debt first but delaying retirement savings can be a costly mistake.

• If your employer offers a retirement match, contribute even if you have credit card debt.
• Time in the market matters more than trying to pay off 18% APR before contributing to a 10% return vehicle.
• Still, do work toward paying off high-interest debt it just shouldn’t replace all savings efforts.

IRA Rollovers: Avoid Costly Mistakes

Rolling over retirement accounts can be simple or surprisingly complex.

• Pre-tax 401(k) to Traditional IRA? That’s typically tax-free.
• After-tax contributions to Roth IRA? Not so fast there may be tax consequences.
• The IRS sees retirement accounts as a single tax bucket, which complicates separating funds.

Don’t navigate this alone consult a qualified tax advisor before making rollover moves.

Estate Planning: Don’t Delay What Matters Most

Estate planning isn’t just for the ultra-wealthy. Everyone needs:

• A will
• Updated beneficiary designations on all accounts
• A trust, if appropriate, and the funding to make it effective

Many people put this off but doing so leaves your loved ones vulnerable. Talk with family, get documents in order, and revisit them every few years.

Moderation: The Key to Long-Term Financial Success

Whether you’re saving for a house, paying off debt, or planning for retirement extreme goals rarely work.

• Break big goals into manageable chunks.
• Avoid all-or-nothing thinking (like giving up all fun spending).
• Set realistic timelines that reduce pressure and increase success.

Just like physical health, financial fitness is built with moderate, consistent actions.

Personal Finance is About More Than Money

This conversation goes beyond spreadsheets.

• Financial planning touches our values, emotions, and relationships.
• The way we spend, save, and give reflects our priorities.
• Seeking professional guidance isn’t a sign of weakness it’s a strategy for strength.

When you treat money as a tool for growth, not stress, you build more than wealth. You build peace of mind.

All information provided is for educational purposes only and does not constitute investment, legal or tax advice; an offer to buy or sell any security or insurance product; or an endorsement of any third party or such third party’s views. The information contained herein has been obtained from sources we believe to be reliable but is not guaranteed as to its accuracy or completeness. Whenever there are hyperlinks to third-party content, this information is intended to provide additional perspective and should not be construed as an endorsement of any services, products, guidance, individuals or points of view outside Edelman Financial Engines. All examples are hypothetical and for illustrative purposes only. Please contact us for more complete information based on your personal circumstances and to obtain personal individual investment advice.

Neither Edelman Financial Engines nor its affiliates offer tax or legal advice. Interested parties are strongly encouraged to seek advice from qualified tax and/or legal experts regarding the best options for your particular circumstances.