Financial Planning - - The Finance Gourmet

Procedure for Using HSA Account To Pay Medical Expenses

September 27, 2025August 23, 2025 by Finance Gourmet

I’ve written a bit lately about Health Savings Accounts, or HSAs, how HSAs work with state taxes, and the difference between Health Savings Accounts and Flexible Spending Accounts. But, the one question I keep getting is how exactly to use a HSA account. The Health Savings Account Theory The idea behind a Health Savings Account, or HSA, is a little bit like a 401k account, or even a 529 college savings plan account. You save money for future expenses like college or retirement, but in the case of an HSA, you are saving for medical expenses. Like with a 401k plan, or an IRA, you get a tax deduction benefit for making contributions. Also, like the other accounts, your money grows inside the account tax free. And, finally, like a Roth IRA, or a 529, you withdrawals for approved expenses are also tax free. So, theoretically, assuming the world around you proceeded in an orderly and predictable manner, and your budget contained plenty of room for all appropriate spending and savings, then you would contribute regularly to your HSA account, and invest that money, so it could grow over time, into a big reserve that is available to you when you …

Will ChatGPT Hurt Finacial Advisors

May 13, 2023 by Finance Gourmet

ChatGPT AI for Financial Advisors The hot topic in many industries is ChatGPT and artificial intelligence (AI). Will ChatGPT hurt financial advisors or will ChatGPT help financial advisors? And, what about Google’s Bard and other AI platforms? Are they helpful or harmful? Are Index Funds and ETFs AI? An interesting argument can be made that the personal finance and investing world has been using AI for decades. It was crude, rudimentary AI for sure, but an ETF is nothing more than a computer investing your money without further input. This is the most basic of AI. You input $100, and a computer records, invests, and tracks your money autonomously making adjustments where necessary, all without human intervention. As these products got more complex, they resembled AI more and more. RoboAdvisors and AI Unlike many industries, financial planners have seen attempts to replace them before. First came the online trading and the discount brokerage invasion, pushing back on the paradigm that required a broker or financial advisor. Just as important, the financial world made room for the self-advised with lower available investment dollars by discarding the extra cost of buying less than a round lot, or 100 shares. This change may …

Achieving Financial Independence Is About More Than Money

January 23, 2023 by Finance Gourmet

Financial independence is a topic that has gained increasing attention in recent years. The ability to live life on your own terms, free from the constraints of financial stress and dependence on others, is something that many people strive for. Add that to an internet full of people living the financially independent dream, or at least pretending to, and the idea that being born rich isn’t the only path to financial independence and you have a sizable movement. But achieving financial independence is not just about having money, it’s about having the freedom to live life on your terms. How To Achieve Financial Independence Tl:dr – Live below your means. Invest the difference. Keep doing it until you are financially independent. The first step in achieving financial independence is to set clear financial goals. This means identifying what you want to achieve financially and creating a plan to get there. Setting financial goals is essential because it gives you something to work towards and helps you stay focused and motivated, not what everyone else is trying to accomplish. One key goal to consider when working towards financial independence is creating an emergency fund. An emergency fund is a savings account …

Are Robo-Advisors Worth It?

December 7, 2022June 4, 2022 by Finance Gourmet

Are Robo-Advisors good enough at what they do? As most regular readers of this financial planning blog know, I used to be a professional Certified Financial Planner for several years. That gives me a lot of insight into just what a financial advisor does and does not do for their clients, and how much that is worth. Susie Orman is a former financial planner who decided that the whole profession was basically rubbish. Other former financial advisors are now out there saying that these professionals are indispensable. The truth, as with most things lies somewhere in between. So, how does a robo-advisor stand up to a real financial advisor? Are robo-advisors safe? And, most importantly, are robo-advisors worth it? What Is Robo-Advisor? Let’s start with getting some facts straight. First, robo-advisor is a fancy, sensational term for bold headlines. The reality is that the so-called robo-advisors are just computer programs that build an investment portfolio, usually out of mutual funds and ETFs, for you. There are no robots sitting behind desks anywhere (although that would be cool.) Second, a robo-advisor isn’t an advisor or financial planner so much as an investment manager. Robo-Advisor vs Financial Planner The reason these things …

What Is The Difference Between UTMA and UGMA?

November 20, 2020May 13, 2020 by Finance Gourmet

How Are UTMA and UGMA Alike? UTMA and UGMA are very similar. Both are uniform code proposals adopted by the individual states. Like other uniform codes (the uniform building code is a common one, for example) these work by proposing a common framework for states to use in order to prevent a hard to use patchwork of laws in each state. The uniform code did not prevent one important variation. The UTMA or UGMA account comes under the control of the beneficiary when he reaches the age of maturity. However, that age varies from state to state. Typically, the beneficiary assumes control of the UGMA or UTMA at age 18 or 21. The UTMA and UGMA are two different uniform codes, but they are more alike than they are different. What Is UTMA? UTMA is the Uniform Transfer to Minors Act. People say, “ut-mah” when they talk about them. What Is UGMA? UGMA is the Uniform Gifts to Minors Act. People say “ug-mah” when they talk about these. Both UTMA and UGMA were created to allow adults, usually parents, to transfer assets to minors without the need to establish a special trust to enable such ownership. Both UTMA and UGMA …

What Are Pre-Tax Dollars?

December 3, 2020April 8, 2020 by Finance Gourmet

Financial advisors and other financial professionals throw around certain terms like, pre-tax dollars, like everyone already knows what they mean. In some cases, they are right, and in other cases, most people only have a partial grasp on what exactly certain financial terms mean. In many cases, knowing the complete definition of a word or phrase makes all the difference. What Does Pre-Tax Mean? Pre-tax dollars is a phrase that is often used in conjunction with retirement planning and 401k contributions. In fact, one of the benefits of a 401k plan is that contributions are made with pre-tax dollars. But, what is the definition of pre-tax dollars, anyway? When an employee gets paid, there are numerous deductions that get taken out of their paycheck. These payroll deductions range from income tax withholding to FICA taxes to voluntary contributions for things like health insurance or cafeteria plans (Section 125 plans). Some of the deductions from your paycheck, like federal tax withholding, are computed based on how much you are paid. Pre-tax means that the deduction occurs before that withholding is calculated. This is why many financial writers and other financial experts point out that contributing to your 401k plan doesn’t actually …

Financial Planning 2019

January 10, 2019 by Finance Gourmet

Stock Market 2019 Look Ahead 2019 is here, and it’s time for Finance Gourmet to take a look forward at what is going to happen with the market in 2019, the economy in 2019, and how you and your personal finances should be setup to weather the storm, and take advantage of the opportunities. 2019 Economy Let’s start with an easy one (Hah!). The 2019 economy looks to be a transition year. This is either the year, that the the economy and the markets consolidate their success and move forward into another expansionary period, or the year that the recession starts. Under normal circumstances we might have a pretty good idea of where things were heading, but these are not normal circumstances. The Trump Presidency alone adds a measure of volatility and uncertainty that just can’t be predicted. That being said, we do have several things to look at to help get an idea of where the economy is heading in 2019. First up is the Federal Reserve, which, at long last, appears to have finally noticed that the economy is slowing and shaking, and that inflation is nowhere to be found other than the always volatile fuel prices. That …

What Is Fiduciary Responsibility?

September 19, 2016 by Finance Gourmet

Fiduciary responsibility, sometimes referenced as fiduciary duty, is the best term in finance, with the possible exception of fungible. So, what is fiduciary responsibility, and do you need someone with a fiduciary duty to help with your finances? Fiduciary is a fancy word for the concept of doing what is in the best interest of someone, typically a client or a trustee. Most people are shocked to find out that most financial planners, financial advisors, stock brokers, and the like do not have a fiduciary duty to their clients. In other words, the guy you have managing all of your money is not required, by law, regulation, or contract to act in your best interests. Rather, they typically have a much more easier standard called suitability. Suitability means that the investments or other recommendations they make are merely suitable for someone like you, not the best for you. So, if it isn’t wildly inappropriate for you to be investing in Apple stock, then they can recommend Apple stock, even if they feel like another investment would be better. Any attempt to ever make any of these financial professionals required to be fiduciaries is met with immediate and ravenous attack from …

When Can I Spend My Emergency Fund?

February 21, 2015 by Finance Gourmet

Most professional financial advisors, and most non-professional know-it-alls as well, say that you should keep three to six months worth of expenses in an emergency fund for, well… emergencies. They aren’t wrong. You never know when life will throw you a curve ball, and when it does, you don’t want a few months of problems to turn into a crushing blow to years of hard financial work and smart decisions. However, the reality is that an emergency fund will never stand up to the worst financial calamities (long-term medical problems). Another reality that causes a lot of people stress is that your emergency fund is designed to be used. Over the course of your life, you fund will likely get drawn down, and then get refilled by more saving. Emergency Fund versus Reserve Fund When I was a professional financial advisor in Denver, I stopped calling it an emergency fund when people would find themselves torn about using it when they needed the money for something worthwhile. For example, imagine your son or daughter spent the last several years in the band. During that time, there have been numerous practices, and your child has built up a real love for …

Bumper Sticker Financial Advice

November 21, 2013 by Finance Gourmet

Bumper stickers are an interesting way to convey an idea. They aren’t very big, so the message must be small. They tend to be ignored, so the message must be clever. You can’t ask the person driving the car what they mean, so they must be clear in any context. On the other hand, a lot of the information is lost when a message is conveyed as a bumper sticker. Entire political debates boiled down to a certain sounding phrase are one example. In the financial world, bumper sticker financial advice often comes from books where repackaging existing financial ideas in new sounding ways is the fastest way to personal finance stardom. Pay Yourself First What Does It Mean? One of the most ubiquitous financial planning as a simple phrase is, “Pay yourself first.” What pay yourself first means, literally, is that you should set aside money to be saved or invested before spending money on anything else. The concept works like this. If each week (or month, or whatever) you get a paycheck if you pay yourself first, then you won’t spend too much money and you’ll save for your future. Sounds good, and it is. In practice, …