Skip to main content
our facebook page
ISAKOV Planning Group Blog
Friday, May 01 2020
The Importance of Financial Literacy in the COVID-19 Pandemic

The Importance of Financial Literacy in the COVID-19 Pandemic

As highlighted in my recent Facebook post, April is Financial Literacy Month, and the topic of financial literacy is critical to everyone concerned about their financial security and future in the era of COVID-19.

Financial literacy can be defined as an individual’s ability to understand his or her personal finances and make informed decisions about their money. In other words, can you adequately identify the strengths and weaknesses of your financial actions and planning? Have you set financial goals and set out on a path to reach (or surpass) them? Experts estimate that only one fifth of American adults are financially literate.

Granted, there is vast uncertainty with regard to income, security, and of course, health during the COVID-19 outbreak. But getting a grip on your financial situation today could not be more important. Don’t let fear in today’s climate stop you from taking the first steps towards understanding how your finances today will hold up during and after the crisis.

For so many people, the economic downturn from COVID-19 has directly reduced their income and ability to pay their bills. Improving your financial literacy today will enable you to determine whether an existing “emergency fund” will help you through the crisis, or perhaps you will need to tap into this money in the coming weeks to pay the mortgage or rent. It certainly raises once again the importance for this type of savings.

Improving your financial literacy will enable you to quickly review unnecessary charges related to your credit cards or bank accounts. It encourages you to requote your insurance policies to see if you can obtain better rates. This is very important today, as auto insurance companies are currently calculating rebates for existing customers, because so many fewer drivers are on the road as part of sheltering in place.

With so many people living paycheck to paycheck (or today, from unemployment or stimulus check to the next one), the ability to budget, take charge of debt, and to save for the future could not be more important. Financial literacy is the road out of the crisis for many Americans.

Here’s a quick set of questions to test your own financial literacy:

  • Can you develop a monthly budget to account for all of your expenses, debts, income, and savings? What are your living expenses for the next 3 to 6 months, and can you handle these during the current situation?

  • Are you able to reduce your debt to zero or significantly reduce it from one month to the next?

  • Do you have an emergency fund? How long will it last in today’s economic climate? What will you do if a health or life event required additional spending?

  • Do you understand the various types of insurance that can protect your finances and investments?

  • Do you understand the difference between an investment and insurance?

Improving your financial literacy will bolster your ability to weather the COVID-19 crisis, and any other challenging scenario that may happen in the future. We’re here to help. Contact the Isakov Planning Group to learn how to increase your financial literacy and take action in this difficult time.

Posted by: Eugene Kuntorovsky AT 08:00 am   |  Permalink   |  0 Comments  |  Email
Wednesday, April 01 2020
Getting a Big Refund Check - What is not to Like?

Getting a Big Refund Check: What’s not to Like?

Actually, the US Treasury check you received last April and paid for your 2-week summer vacation may not be the best approach.

Think of it another way: instead of saving, investing, or pocketing all that money yourself, you are giving the federal government (and possibly the state government as well) interest-free loan.

There is no benefit to this, except perhaps that it is a form of “forced savings.” With a little discipline, you can save this money yourself throughout the year.

Here’s another way of thinking about that unintended loan to Uncle Sam. Not only do you not get any interest back, but the value of that sum you got back is actually less than what you gave them during the course of the year. That’s how inflation works. If you overpaid your income tax in 2019 to the tune of $5,000, the refund check that you receive in 2020 is actually only worth $4,936.92 because of inflation, according to the Bureau of Labor Statistics’ inflation calculator.

Isn’t this money much better in your hands week after week? For some people, it could make the difference between living with far less stress and worry about paying their bills.

At Isakov Planning Group, our advice is to change the amount of your withholding (the W-4 form) so that more of your money is in your wallet and less needlessly goes to the IRS and state treasuries. Next year’s refund will no doubt be smaller, but you will have control over how that money grows throughout the year.

Maybe that summer vacation is still the goal. If you are careful about setting aside savings automatically, you may still be able to pay for it, and have some extra money left over that would have been in the government’s hands.

If you received an unusually large tax refund from the IRS, contact me at the Isakov Planning Group. We’ll make it easy for you to keep that money every paycheck and make it work for you.

Please follow my Facebook page for more updates!



Posted by: Eugene Kuntorovsky AT 10:28 am   |  Permalink   |  0 Comments  |  Email
Tuesday, March 03 2020
The Double-Tax Free Benefits of 529 College Savings Plans

The Double-Tax Free Benefits of 529 College Savings Plans

The 529 college savings plan is an attractive way to save for a child’s or grandchild’s education for a number of reasons. However, one of the best arguments for opening a plan is that it is double-tax free. In some states, it may even have an additional tax benefit. Here’s why: (1) When you withdraw money from a 529 plan, the money cannot be taxed by the federal government, as long as the withdrawn money is spent on expenses associated with higher education (e.g., college tuition, books). (2) As the money grows, interest earned is not taxable. (3) In several states, the money you contribute to a 529 college savings plan may be deducted from taxable income.

However, fewer than 3% of households in the US had an active 529 account in 2018, according to government surveys, which is a bit lower than the amount in 2019. Of the wealthiest households, only 16% had a 529 account in 2018. The average amount of money in the account was $55,900 at that timenot an insignificant figure.

Although the main reason more people don’t take advantage of 529 college plans is that they are simply unaware of them, other people decide against them because of other concerns, which are mostly unjustified.

The Myth

The Truth

The Reason

Higher earners do not qualify for 529 plan contributions

Anyone, regardless of income, can participate in 529 plans

There are no income limits on taking advantage of the savings and tax benefits of these plans




529 Plans reduce my child’s likelihood of receiving financial aid

529 Plans do not figure strongly in the financial aid calculation

Less than 6% of all parental assets can be considered to be used for college expenses




If my child does not go to college, I will lose the money saved in the 529 plan

Not really

You can change the beneficiary to another family member (even adults), nephews/nieces, first cousins, even in-laws. You can also withdraw the money for other expenses, subject to taxes and tax penalties




529 Plans apply only to in-state colleges

Most plans can be used to pay for college anywhere in the US and, in some cases, overseas

“Prepaid tuition plans” are different, and can be limited to in-state colleges




529 Plans will never accumulate enough to pay fully for college education

It depends on what you contribute

Even small amounts can reduce student debt and make a big difference



Contact an Isakov Planning Group Financial Advisor to find out more about opening a 529 college plan for your children’s education.

Posted by: Eugene Kuntorovsky AT 10:02 am   |  Permalink   |  0 Comments  |  Email
Sign Up to Receive Our Latest Posts!
Isakov Planning Group would like to share our most recent financial planning information with you.

Email Address

Email list signup