Money Girl

1052. Thinking about helping your kids buy a home decades from now? Host Laura Adams answers a listener’s question about the best ways to grow savings. You’ll learn how inflation impacts long-term savings and which growth-oriented accounts offer the best return for long-term goals.Key Takeaways:For long-term goals, low-yield options like CDs carry risk due to inflation. Broad-market index funds (like an S&P 500 fund) offer higher returns that can keep pace with inflation.Opening a standard brokerage account in the parent's name allows money to grow in low-cost index funds without contribution caps or early withdrawal penalties. Parents are in complete control of when, how, or if the money is gifted.UGMA or UTMA accounts allow parents to invest on a child’s behalf, and ownership legally transfers to the child when they reach adulthood.Families with children under 18 can utilize Trump Accounts, which allow up to $5,000 in annual tax-deferred contributions. Plus, those born from 2025 to 2028 are eligible for a $1,000 federal deposit. After age 18, a child’s Trump Account converts to a traditional IRA. It can be converted into a Roth IRA by paying taxes on account earnings, which then allows more options for penalty-free withdrawals.Once a child has earned income, parents can match their earnings in a Roth IRA up to the annual limit ($7,500 in 2026). Contributions can be withdrawn anytime tax- and penalty-free for any use. After five years of account ownership, a Roth IRA allows up to $10,000 of earnings to be used penalty-free (but not tax-free) for a qualified first-time home purchase.Discover more from Money Girl!FacebookNewsletterTranscripts available at QuickandDirtyTips.com.Email: Laura@LauraDAdams.com or leave a voicemail: (302) 364-0308.

1051. Are you worried about the rising cost of college? In celebration of College Savings Month, Laura compares the two main types of education accounts: 529 savings plans and 529 prepaid tuition plans. You’ll learn their key differences and how to choose the right plan.Key TakeawaysBoth 529 savings and prepaid plans offer tax-free account growth and tax-free withdrawals when used for qualified education expenses.529 savings plans invest in market portfolios (like index funds) for higher growth potential, while prepaid plans lock in current tuition rates at state universities to hedge against rising costs.529 savings plans cover tuition, room, board, books, computers, trade schools, and up to $20,000 per year for K–12 tuition. Prepaid plans only cover tuition and mandatory fees at a preset in-state university.Unused funds in a 529 savings account open for at least 15 years can be rolled over tax-free into a Roth IRA for the beneficiary (up to a $35,000 lifetime cap).You can use both accounts to lock in prepaid tuition rates and a savings plan to cover many other qualified education expenses.Discover more from Money Girl!FacebookNewsletterTranscripts available at QuickandDirtyTips.com.Email: Laura@LauraDAdams.com or leave a voicemail: (302) 364-0308.

1050. Buying a car can feel like a financial landmine. Host Laura Adams answers a listener’s question about buying a car before starting his first job. You’ll learn how to evaluate your current car, set a budget, secure financing, and find a great deal that doesn’t wreck your financial goals!Key Takeaways:Compare a car’s repair bill against months of new car payments and a potentially higher insurance premium before giving up on an older vehicle.To keep transportation costs affordable, follow the 20/4/10 rule to put 20% down, finance for no more than four years, and cap total expenses at 10% of income.Get an auto loan pre-approval before you start car shopping so you have an interest rate benchmark if a dealer offers financing.Request auto insurance quotes for different cars you’re considering so you understand the cost before buying a vehicle.Focus negotiation on a vehicle’s total purchase price rather than the monthly payments, which can be adjusted to include fees or longer loan terms.Leasing a car may make financial sense if you need a lower monthly payment, drive lower annual miles, prefer a new vehicle every few years, and don’t care about building long-term equity.Discover more from Money Girl!FacebookNewsletterTranscripts available at QuickandDirtyTips.com.Email: Laura@LauraDAdams.com or leave a voicemail: (302) 364-0308.

1049. Think building wealth requires a six-figure salary? Think again. Host Laura Adams breaks down five small, high-impact habits that lead to serious long-term wealth, regardless of your current income. You’ll learn how to turn quiet daily routines into big financial freedom!Key TakeawaysWealth is built on consistency. Setting up automatic transfers to high-yield savings and retirement accounts eliminates the temptation to spend.Taking advantage of tax-advantaged accounts creates opportunities for growth and short- and long-term tax savings.Low-cost index funds combined with dollar-cost averaging offer a proven, stress-free path to long-term market growth.Using the debt avalanche method to target high-interest debt first yields a guaranteed return equal to the interest rate avoided.Income is what comes in; net worth is what stays. Regular updates to a net worth dashboard provide the truest measure of your financial progress.Discover more from Money Girl!FacebookNewsletterTranscripts available at QuickandDirtyTips.com.Email: Laura@LauraDAdams.com or leave a voicemail: (302) 364-0308.

1048. Receiving an inheritance can be a life-changing financial event, but passing a portion of those funds along to family members comes with a unique set of tax rules. Host Laura Adams breaks down the federal tax consequences of sharing an inheritance. You’ll learn how inherited assets are taxed at receipt, how the federal annual gift tax exclusion works, and smart tax-free strategies to help your loved ones without triggering extra tax paperwork.Key Takeaways:Receiving plain cash or life insurance proceeds does not trigger federal income tax, and you do not need to report it on your federal return. However, a gift giver could owe state tax depending on where they live. As a gift giver, you can exclude up to $19,000 per person per year (or $38,000 if married) without reporting it. Gifts above the exclusion simply require filing IRS Form 709 to count against your $15 million lifetime exemption, meaning almost no one owes actual gift tax.Inheriting property or taxable investments adjusts the asset’s cost basis to its fair market value on the owner's date of death, erasing past appreciation.If you want to pay tuition or medical bills directly for someone else, it does not count toward your $19,000 annual exclusion or require Form 709 reporting.You can superfund a 529 savings plan for someone else and use five years’ worth of annual exclusions at once.Discover more from Money Girl!FacebookNewsletterTranscripts available at QuickandDirtyTips.com.Email: Laura@LauraDAdams.com or leave a voicemail: (302) 364-0308.

1047. Host Laura Adams cuts through the confusion and explains the basics of Medicare for anyone approaching 65 or helping a relative compare options. You’ll learn how parts of Medicare work, which expenses Medicare doesn’t cover, how to fill insurance gaps, avoid lifetime penalties, and the truth about costly Medicare myths.Key Takeaways:Medicare Part A covers hospital and inpatient care (premium-free for most), while Part B covers doctor visits and outpatient services for a monthly premium ($202.90 in 2026).Medicare Advantage (Part C) is an all-in-one alternative that bundles Parts A, B, and usually D into a single plan with network restrictions and out-of-pocket caps, often adding basic dental and vision coverage.Original Medicare doesn't cover long-term care such as assisted living or nursing home stays, or routine dental, vision, and hearing care.Medigap protects against out-of-pocket costs, such as deductibles and 20% coinsurance left behind by Original Medicare, but it cannot be combined with Medicare Advantage.Missing your Initial Enrollment Period triggers lifetime penalties unless you have active, creditable employer health coverage. Enrollment isn't automatic unless you already receive Social Security benefits when you turn 65. Discover more from Money Girl!FacebookNewsletterTranscripts available at QuickandDirtyTips.com.Email: Laura@LauraDAdams.com or leave a voicemail: (302) 364-0308.

1046. Did your teenager earn money from a summer or part-time job? Laura answers a listener’s question about two tax-advantaged savings accounts for minors: the Roth IRA and the new Trump Account. You’ll learn how both accounts work and where working teens or their parents should put their hard-earned dollars first.Key Takeaways:Minors can have a custodial Roth IRA when they earn income from W-2 employment or self-employment and contribute up to $7,500 or 100% of earned income, whichever is less.A Section 530A Trump Account can be opened for kids under 18 regardless of whether they earn income, and contributions can total $5,000 annually.A Roth IRA offers tax-free growth and tax-free withdrawals in retirement.A Trump Account grows tax-deferred, and once the owner turns 18, it becomes a traditional IRA, with distributions taxed (except for contributions that were previously taxed).Parents or relatives do not need to use a minor’s money to fund a Roth IRA; they can match or make an eligible contribution for the minor.After age 18, doing a Roth conversion on an old Trump Account is a wise move to lock in tax-free growth forever.Eligible working minors can max out a Custodial Roth IRA up to their earnings limit and receive up to $5,000 in a Trump Account from family, friends, or employers in the same tax year.Discover more from Money Girl!FacebookNewsletterTranscripts available at QuickandDirtyTips.com.Email: Laura@LauraDAdams.com or leave a voicemail: (302) 364-0308.

1045. Are you taking full advantage of tax-free retirement growth? While both workplace Roth plans and Roth IRAs offer tax-free growth, they come with vastly different eligibility limits, withdrawal rules, and investment options. Laura breaks down the key Roth differences so you can decide which option is right for you. Key Takeaways:You can contribute up to $24,500 to $32,750 in a workplace Roth for 2026—over triple the $7,500 to $8,600 limit for a Roth IRA, depending on your age.Roth contributions make sense if you believe your income or tax rate will be higher in the future when you can take tax-free withdrawals. High earners who exceed the 2026 Roth IRA MAGI limits can not make full contributions to a Roth IRA. You can withdraw 100% of your original Roth IRA contributions anytime, tax- and penalty-free, but that’s not possible with a workplace Roth. A Roth IRA offers better investment choices and early liquidity compared to a workplace Roth. Workers over 50 and earning over $150,000 in prior-year wages must make any workplace catch-up contributions on a post-tax Roth basis.Most investors should prioritize contributions to a workplace retirement plan to receive 100% of any employer match.Discover more from Money Girl!FacebookNewsletterTranscripts available at QuickandDirtyTips.com.Email: Laura@LauraDAdams.com or leave a voicemail: (302) 364-0308.

1044. Are rising healthcare costs ruining your budget? Laura answers a listener’s question about how to maximize every tax advantage available for healthcare costs. You’ll learn the rules for deducting them on your tax return or paying them with tax-advantaged savings accounts like HSAs and FSAs. We’ll cover which expenses are tax-free and simple strategies to optimize your healthcare spending.Key Takeaways:You can only claim the medical tax deduction if you itemize deductions on Schedule A instead of claiming the standard deduction on your tax return.You can only deduct unreimbursed healthcare expenses that exceed 7.5% of your adjusted gross income (AGI), making the medical deduction best for years with high medical bills.Tax-advantaged medical savings accounts are powerful because they allow you to save 20% to 35% on qualified costs without claiming a medical deduction.Health savings account (HSA) balances roll over forever, can be invested for tax-free growth, and can be withdrawn penalty-free for non-medical expenses after age 65 (subject to ordinary income tax).Flexible spending accounts (FSAs) and health reimbursement arrangements (HRAs) are employer-sponsored perks for cutting healthcare costs.You cannot claim an itemized medical deduction on Schedule A for any healthcare expense paid for or reimbursed using pre-tax funds from an HSA, FSA, or HRA.Lawmakers have expanded HSA, FSA, and HRA qualified expenses to cover various over-the-counter (OTC) medications and products.Discover more from Money Girl!FacebookNewsletterTranscripts available at QuickandDirtyTips.com.Email: Laura@LauraDAdams.com or leave a voicemail: (302) 364-0308.