Most of us have many hidden talents. My husband can strategically pack the dishwasher full of nearly all the dishes in our kitchen and everything will still come out clean. One of my hidden talents is the ability to squeeze every last drop out of a tube of toothpaste, bottle of lotion or jar of ketchup. When other people would give up and throw the jar away, I’ll use it for another week. I call this “The Art of Making Cosmetics Plenty.”
Three weeks ago my husband told me he needed a new tube of toothpaste. I added it to the shopping list, bought it, and put it in his drawer. I took the “old” tube of toothpaste and put it in my drawer. I’m still using that tube of toothpaste. The same thing happened the other night when we were putting our kids to bed. My son had irritated skin and needed some ointment. My husband handed me a tube of Aquafor (a 0.5 ounce sample from the doctor’s office) and said, “I don’t know why this is still in the drawer, it’s empty and needs to be thrown away.” I proceeded to wiggle and squeeze the tube until an application came out and put it back in the drawer. I used it one more time and it was finally done.
I can only assume I inherited this trait from my grandmother. She moved in with us after my grandfather passed away when I was in high school. As a child of the depression she wasted nothing. As a typical teenager I was not receptive to most of her lessons, but this one stuck. Waste not, want not.
Obviously stories about squeezing tubes of toothpaste and lotion are silly, but it draws a striking parallel to managing money. When working with clients we look at their financial plan and investment portfolio from all angles, turn it upside down, and apply strategies to build wealth and squeeze out every possible dollar of retirement income.
The strategies available are wide ranging and unique to each situation, but most are only evident after a careful analysis of the overall financial picture. These might include simple changes like increasing retirement contributions or adding Roth IRA contributions to the mix. Or they might be more complex like maximizing the 15% tax bracket to realize capital gains at 0% tax, converting traditional IRA or 401k contributions to Roth, or taking advantage of net unrealized appreciation on company stock inside a 401k. Strategies like these can save you anywhere from hundreds of dollars in the short term to hundreds of thousands of dollars in the long run.
While maximizing the amount of sunscreen I can get out of a bottle by cutting it open with scissors probably saves me a few dollars a year, efficient management of your finances can make a much more substantial impact. This is why it is critical to take a holistic look at your financial picture on a regular basis. Without regular attention, opportunities are missed and money is left on the table.