Paying attention to all budget areas ensures the best money management

We were cleaning up after our guests left, and when I went out to grab our charcuterie board, it was empty. While we were paying attention elsewhere, unbeknownst to us, our collie was very interested in a tasty snack of cheese, crackers and meat.

So what are you not paying attention to when you are paying attention to other things?

If you are focusing on politics, you might be paying attention to how the current administration is either harming your party or providing benefits to you. You are likely looking for confirmation, good or bad, in everything that’s happening. But there are areas of importance that you might not be as closely monitoring.

There was an expectation the federal estate tax exemption was going down next year, and federal income tax rates were rising. Well, the estate tax exemption is not only going up, it is going to be inflation adjusted. Federal tax rates are also not rising, and there are some bonuses thrown in for seniors, parents and, yes, even Minnesotans thanks to an increase in the itemized deduction limit for state and local taxes. There’s also some help for smaller donations to charities.

But other tax benefits have ended up reduced or repealed. Top bracket filers will have their itemized deductions capped and their charitable giving benefits decreased. Many of the green energy credits will be no more.

Most people will manage some tax break from what could have been. You might focus on this.

You could focus on the likelihood that in order to pay for these benefits, we will probably see the deficit increase. It is unlikely economic growth will pay for these tax savings. Tariffs could help in that respect, but let’s pay attention to where tariff receipts originate.

You can focus on whether tariffs are good or bad and whether or not their intended purpose will come to fruition. But for now, what if you focused on who is paying these and what the consequences of that could be? If importers eat tariffs, certain corporate profits drop. If they pass the costs on, the consumer has less money to spend in other areas.

Politics aside, are there other areas you might be overlooking when you focus on something else? Here are a few ideas to think about:

Some of our clients are uncomfortable focusing on spending money on themselves but are comfortable giving it away. While charity is wonderful, you want to focus on how it fits into a total spending program. Focus on giving from intention rather than guilt.

Some clients have an easy time spending on little items but cannot move on the big ones. Many clients hate spending money on minor purchases but don’t hesitate on the big ones. But if you draw your focus on allocating short-term and long-term dollars in each of these categories, you can better balance them.

Some clients are focused on how their children don’t appreciate what their parents have done for them. But this draws attention to a unilateral contract you had with your child: “I’ll help you, and you ...” Have you focused on having a conversation with your kids around how you wish to help them? Giving them a say in areas where they might not wish for help and defining your expectations around what this help means? If you don’t want to have the conversation, then focus on helping in places that match your own values. Target expenses like day care, health care or housing.

Redirecting your focus lets you look at complex things from many angles. It can mean enjoying the great leftovers, too.