Happy April Fool's Day!

Happy April Fool's Day!

I started on April Fool’s Day to remember to keep my sense of humor.  I also did not know if this whole business plan would work.  I certainly did not know thirty years later how my life, my work, and MoneyPeace would evolve.  I am so grateful to all you readers, clients over the years and other planning professionals who appreciate my approach to money.

This week, I was reflecting on  MoneyPeace history as part of a registration form with a speaker’s bureau. This was such a gift!  I am appreciative of all the places I have been and of those people who responded to my work.  I was reminded that I love speaking and am ready to do more. 

I do not know where I will be in thirty years. For today, I want to continue to write, speak and spread MoneyPeace.  So, watch for more blogs, articles, email newsletters and videos.

What I Learned from My Irish Family

The roots of my Irish heritage and money are complicated. In Ireland, coins were used for centuries. Often the coins represented reigning kings. In the twelfth century, the British took over and ruled Ireland. This included their money, their banks, and systems, imposing the English system.

The Irish learned not to trust the banks or the money that was used for exchange during the time of the British rule. Though valid currency, the system was English, the language was English and there were so many restrictions on the natives, that many natives were leery of using their banks. These feelings ran deep and settled in many a family over the generations even in an independent country. 

The Republic of Ireland became independent in 1921, leaving six counties in the north still part of England. In 1927, the Republic issued their own currency. That currency changed with the advent of the Euro in 2002.

Some of my relatives emigrated in the 1920’s and would have had money in the US banks when they failed during the depression. They lost their hard earned money, so the feeling carried down through the ancestors about money and financial systems are complex.

My ancestors learned from their experiences. (Yours did too.) I learned many things from what they had to live through on both sides of the ocean. They were an industrious, practical bunch. Land and homeownership were key to success. Even generations later, feelings around money can be complicated because of a “rich” history of happenings. Sometimes what were their experiences, though no longer relevant to me, make it into family lore. Sorting this all out adds a bit of complexity to what I really need to learn.

My profession is about creating solid quality of life while living in peace around your money. Although knowledgeable on the facts and US rules on the money and tax system, I was taught that there is more to life than money alone.

This is what I learned from my family:

• Help Others: There is always someone who is worse off than you.

• Buy Quality: From clothes to cars to home goods, be sure you buy value.

• Repair It: Do not go and buy new, which takes money and hard work. Fix it.

• Get Educated: From vocations, academics or a lesson in cooking, learning is invaluable.

• Enjoy Music and Dancing: They are a fun release – and fun matters.

• Maintain Community: Connections improve the quality of your life as well as your neighborhood.

• Buy the Best Health Insurance: One cannot put a price on health.

We all learn consciously and unconsciously from our families of origin. We take away the good and the unhealthy financial habits. This month, ponder your roots and learning. What have you learned?

Picked up not good financial habits? Adapt and adjust. As adults, we can choose what we want to change.

Do one thing to honor your ancestors. I will be donating to an Irish charity.

What will you do?  Cook up something traditional. Create a family gathering. Simply connect with a family member.

Whether you are Irish, Spanish, Italian, Mexican, Canadian, Greek, a mix or a pure bred American, we are all human and survived thanks to the strong good character of our ancestors. Celebrate one aspect of your history this month.

Here is a bit of Irish music by The Chieftains: Will You Go Lassie Go (aka Blooming Heather; aka Wild Mountain Thyme)

This CFP Wishes for My Loved Ones

Dear Loved Ones,

There are many questions you have asked me over the years. Despite the fact I cannot give specific advice without knowing one’s full situation, many of your questions required one simple step. 

I never know if you did them or not. I care and am concerned that you are in good hands financially. I prefer you avoid a financial situation that could be fixed with a bit of pre-planning, rather than scrambling after the fact.  

I seldom hear the follow up. I care. And because we are friends first, I am not the professional you work with, I do not ask. 

Today I am wondering if:

Your Retirement Beneficiaries are Correct: 

Longtime partners told me, “Oh yeah, we never changed those from family members. But our families know who to give it to.” By law, the money goes to immediate legal family. If they chose to then pass it on to a partner, there are potential taxes that may diminish those funds. I hope you have designated your partner by now.  

Life Insurance Beneficiaries Updated:

A young recently married couple told me, “We were so busy with our wedding planning and honeymoon, we never updated our life insurance and company benefits. This will go to our spouse automatically now that we are married, right?” No, no, no. You need to make the changes on your policies and with your company. Easy enough to do today. Get on it.

You Have an Estate Plan to Match Your Current Life:

Our lives constantly change: we move, we have children, our assets grow, we have grandchildren, we marry. Too people many make major shifts and leave their former will in place. They often forget or do not understand that you need a recent Power of Attorney for your finances and Health Care Proxy. I do hope after you made the move out of state, you followed up with a new estate plan in your state of residence. 

You Have Assigned A Guardian for Your Children:

This is designated in your estate plan. Otherwise, their guardian many be your next of kin or appointed by the court. A legal guardian is responsible for the health and financial care of a child until “legal majority” in the state of residence. Be Kind to your children. Create a will with your wishes and a lawyer to carry them out.

You have Left a Paper Trail. Or Digital Trail:

Being in good financial shape with an estate plan and well organized records is great. If no one can find them when you fall ill or pass on, then they are of little use to the people who need them most. I hope by now you have told someone how to find your paper trail, making it easier on your loved ones at a dire time. 

Leave behind a legacy of love.

This CFP Wishes for My Loved Ones

My Valentine:

1. Have a Well Done Estate Plan, Have Peace of Mind

2. Have Cash to Offset Stress of Life Events

3. Review Your Investments Every year.  

Life changes. Have that balance of stocks, bonds, growth and value investments. Create an estate plan. Keep a cash account. Then you can weather any movements in life or the stock market

What are Annuities?

Question: “I just got an inheritance and a financial person suggested I purchase an annuity with $90,000. We were going to expand our home. I do want to be smart and do something wise for the long term with the money. What is an annuity? Is it a good investment?”

Christine’s Answer:

Good for you for wanting to learn about money.  

First, the annuity answer. An annuity is an insurance contract. There are many types and forms from fixed annuities to variable annuities which have an investment component. They are backed up the insurance company that sells them. If this financial person only suggested an annuity, then they may only sell annuities. Annuity is a product with a large commission for the sellers typically. If an investment person does not offer you more options, they may not be working in your best interests. 

Expanding your home sounds like an option, but do you have a financial plan? Use that inheritance wisely by consulting an objective financial professional first. You can meet with them on an hourly basis and they can evaluate if you have a safety account, how to manage any debt you may have and plan for your future. They can also further explain annuities and other options to best serve you. To contact one that does not sell products reach out to the Garrett Planning Network.

Once you are more educated you can decide your next steps.  

How Can I Stop Spending Money?

How Can I Stop Spending Money?

My number one tip is to create a spending plan. Choose ahead of time how you will spend your monthly income or other incoming money. This is a better way to think about your money than a budget, which I find is a limiting mindset. 

Do not shop in person or online or social media binge when feeling emotionally upset. We spend more when we feel bad. We also are less discriminating and more apt to make impulsive purchases thinking they will improve our life. Survey: 48% Of Social Media Users Have Impulsively Purchased A Product Seen On Social Media | Bankrate

If you are shopping: 

When buying on-line, put what you want in the shopping cart, but do not buy it. Or in a store, ask them to hold it for you. Sleep on it. After 24 hours, if you still decide you need it or if it is a want, you can easily afford it, then go ahead, and buy it. If not add it to a shopping tab for future spending when you get that raise, bonus or financial gift.  

Unlink your credit and debit cards to your favorite spending sites. Yes, you can do this. But you may have to delete it from your laptop and phone too. One click is too easy for all of us. (Yes, me too.) 

Do not be seduced by the latest best product on YouTube, Instagram, or any social media. These are advertisements. Realize that the sellers are spending big money to tout their product. They are making their money back by selling something to you. Some of what they sell is image and an improved lifestyle. An improved life is an inside job and taking care of your finances is one way to make a better life for yourself. 

Economic Concerns for Your Attention

Why am I concerned about the economy?  This country has a debt problem from government to individuals.  If we do not slow down and pay attention to how and where we spend money, the whole system could fall apart. 

As I always talk about financial self-care, I wanted to reiterate why it matters today. Financial change is happening everywhere, not just with the banks.  You can only control your part of the world but first learn what is happening and why that is more important than ever.

Here is what I am paying attention to with trepidation:

1.  Car loans are rampant with over 30% of people financing a car

People cannot afford transportation costs.  Given some may be buying more car than they can afford, but this is ridiculous to have so much debt out there for a depreciating asset. In addition, a greater number of people are defaulting on their car loans.

2. Credit card balances are high 

On average people have over $5,000 in credit card debt, worse, defaults are on the rise.

3. Savings are depleted

Remember all we were saving during lockdown?  Those accounts are dwindling.

4. Commercial office buildings mortgages delinquencies rise

With work from home movement and other changes, the rate is around 5% this year.

5. Traditional measures  

Employment looks strong, and inflation is stable by many reports; These positive measures are critical to a budding economy.  I believe they cannot stand alone without other financial factors which matter to each of us individually.

6. Rising interest rates  

The interest rate changes are affecting businesses and consumers on the loan side.  Sure, savers gain but see my list, # 3 above. 

7. Debt ceiling compromise was a temporary fix  

This issue will come to the forefront after the next election, or sooner.  Right now, the astronomical amount is easy to understand by calculating per US citizen is close to $7,100 each. 

8. War in Ukraine  

A country I am humbled to admit I couldn’t have found on the world map a decade ago is now in splinters and affecting global stability and peace.

Something is going to give.  Perhaps in the long run all will be well.  In the meantime, being prepared to ride out the fiscal downside is crucial.

I am not chicken little saying “The Sky is Falling” rather …

Instead, I’m encouraging living by the Girl Scout model of “Be Prepared.”

You have heard it before from me many times. This attitude is a product of my Girl Scout years and career. Stay financially sound with these five ways to be prepared for the unforeseen whether flooding, fires or economic downturns:

Five Steps to Maintain Your Prosperity Preparation:

1.     Create a safety savings.

2.     Live on less than you make.

3.     Check and cross check your insurance coverage.

4.     Be Prepared for downsides financially and with an estate plan.

5.     Enjoy the upside by living in the simple pleasures and appreciating what you have today.

Whatever you do, do not take money out of your long-term goal, like retirement, to fund your life now.  That will backfire in the long run, leaving you with less to live on in your older years.

Balance is key.

When you have the downside contingencies taken care of, you will be prepared for the worst.  Then, you truly will be comfortable appreciating and savoring the best.

Looking to read more about what the economy is doing? Here are some resources:

• Subprime car loan delinquencies are surging (axios.com)

• Millennials, Gen Z Fall Behind On Auto Payments | Bankrate

• Total Household Debt Reaches $17.06 Trillion in Q2 2023; Credit Card Debt Exceeds $1 Trillion - FEDERAL RESERVE BANK of NEW YORK (newyorkfed.org)

• US pandemic savings depleted by Q1 2023, says Fed research - Central Banking

• Savings Rate by Country / Gross National Savings Rate by Country 2023 (worldpopulationreview.com)

• Personal Income and Outlays, June 2023 | U.S. Bureau of Economic Analysis (BEA)

• Office Vacancies Drive Up Delinquencies in Commercial Real Estate (wsj.com)

• Civilian unemployment rate (bls.gov)

• Current US Inflation Rates: 2000-2023 (usinflationcalculator.com)

• Office Loan Delinquencies Hit 5% in More Commercial Real-Estate Woe (businessinsider.com)

• U.S. National Debt Clock : Real Time (usdebtclock.org)

• Debt Limit | U.S. Department of the Treasury

• Fitch Downgrades US Credit Rating Citing Deficits, Governance, Debt Ceiling (businessinsider.com)

• Americans are pulling money out of their 401(k) plans at an alarming rate | CNN Business

Travelling Close

Growing up, our house had regular visitors from overseas. My Irish relatives would typically descend in the summer and as a result, I would be on hand to be part of the entertainment. Truly, my parents were planning and executing the day trips. Typically my mother would take the actual trip and do the driving. As the youngest, I was along for each ride for many, many years. From Boston, Plymouth Rock was not far. Bunker Hill Monument and The Constitution were only a few miles away, as was the seashore. So before the age of twelve, I had climbed over “The Rock,” sat on the cannons and climbed the stairs of these historic monuments many times. In junior high, I was shocked at how few of my classmates had even been to one of these local sites I had frequented.

This summer, I decided on rather than one long vacation, a series of Fridays off would give me freedom for long weekends or day trips on a less crowded weekday. So far, this option has created many adventures and opportunities to see novel places and even act as a tourist in Vermont.

Let me be clear – this does not feel like the recent “stay vacation” movement of past years, where a week was spent at home. Or the overall goal was to save money. Rather, I have time for long weekends that are not too far away. Or daytrips where I can be the “visiting” tourist in my own backyard. None of this involves undue planning or plane flights which takes more energy. Long drives leave time for exploration and side roads. No matter that there seems to be construction everywhere in Vermont. None of these excursions are time sensitive.

The result? August is here and I have been to several unfamiliar places and had new experiences. In Vermont, I went to a couple of local festivals from Beer festival to Street festival to a few Vermont state parks. I visited places that had been long remodeled and well touted since I was there a decade ago. I acted like a tourist at the King Arthur Store and Simon Pierce outlet. And I was home in my bed that night. Relaxing and fun.

There was energy to head to the Eastern Townships of Canada – a whole new area I had never experienced. Lakes, scenery and a foreign country all rolled into one. There was a day of photography with friends, a day boating on the lake with a generous friend with a boat and an afternoon ferry ride across the lake to New York to cool off one afternoon.

One weekend, my husband and I went away to Ontario. We had the pleasure of staying with friends a night who introduced us to their main local summer event – The Scottish Highland Games. The music was fabulous! (Thanks Louise and Jamie!) Then, we headed to the city of Ottawa for a night. We caught a street festival of performers and an amazing light show on the Parliament Building. Each night we had fireworks too. A bonus: These unique city events were all free! We came home refreshed after a total change of scenery for a weekend.

Attitude is what has made these days fabulous. And of course, the weather has helped. But the perspective of doing something different and having a day or two of open time meant each trip was rejuvenating.

We all get so caught up in doing activities that we have enjoyed for years that even vacations happen on autopilot. A bit of variety from our way of doing things may just be the ticket we want and need to finish off this summer and move into the cooler months of the fall.

I suggest you try an experience that is different this month. Worried about the cost? Remember the event does not have to be expensive. Festivals are often free. Renting a kayak or bicycle for an hour or two costs less than a dinner out.

And best of all, according to research, experiences mean more to us than buying things. So skip the new purse and take yourself and the crew on a beach day!

No time for more, as we are off to the Addison County Fair!

Enjoy Summer!

3 Things to Consider before a Prenup

Love is in the Air: 3 Things to Consider before a Prenup

“Do you know of a good lawyer to do a prenuptial-agreement?” the email from a young, engaged friend of mine seemed simple enough. However, the question lead me to discern that there are several essential discussions needed before they contact a lawyer for a prenup.  

Pre-nup agreements are all the talk in certain circles. You need to ascertain if it is for you – not because you both read it somewhere. (Or God forbid saw the advice from someone on Social Media who was not a financial or legal professional.) 

Discuss these questions together:

1. Do you need one? Why?

2. Have we communicated honestly about all our financial information?

3. Is a prenup recommended by a legal or financial professional who has both of our interests in mind?

Motto for the bride and groom:

We are a work in progress with a lifetime contract.
- Phyllis Koss

Step 1 – Understand Why You Want a Pre-nup

The typical reason is a disparaging state of life either financially or personally between a couple. One person has deep wealth, ownership in a family business or children, and the other doesn’t. Or one person was married before and feels uncomfortable without one as a result of that settlement. Consider your special circumstances as a couple to understand if you have a valid reason for a legal document.

Then, understand the laws of your state of residence. Most recognize that each person’s assets are their own coming into the marriage and even in the case of a divorce will be able to keep those assets. 

In addition, review the federal laws of marriage. The Government Accountability Office did a study in which they concluded over 1,100 rights were part of the marriage legal relationship. 

Step 2 – Sharing All Financial Information With Each Other

Before you commit to a lifetime of marriage, take these steps:

• Discuss how we are going to handle money, investments and planning for the future- and most of all financial on-going communication. (More on that later.) Put the plan in writing.

• Change beneficiaries on retirement plans, life insurance and unearth any joint property with someone else so you are both aware of the others financial situation. This also allows for true confessions on debts, savings and other financial commitments.

• Check credit reports and share with each other. These are the story of your potential spouse before you met. Start your search for the three main reporting agencies and free reports at: www.Annualcreditreport.com

With the expectations clearly laid out for your financial lives together, you will start to understand your pending spouses financial ideas and past. Plus, you will both understand each others financial life.

Step 3 – Consult an Objective Professional

A lawyer or CERTIFIED FINANCIAL PLANNER™ who is hired by both of you is the best resource before your marriage and to guide you through your years of life together. Having both types of expert as a resource will serve to ease your transitions in the coming years.

A CFP® who both have hired will discuss your concerns around a prenup agreement. They will want you to share the financial plans and goals you have together for an understanding of your situation. Having an objective opinion will allow you to decide how to proceed.

Even before you are married, meet with a lawyer to lay out what your estate plan will say post-marriage. The documents for your will, power of attorney, health care directive and trust if needed can be drafted. Then, you will have had many conversations to get to this point and feel confident about your next steps in marriage and life. (You cannot actually sign it with the lawyer until you are married. I am such a financial nerd, we had ours signed before we went on our honeymoon.)

Also, you may want to consult a pre-nup specialist who serves more as a mediator/consultant to counsel you both. They can draw up the pre-nup if necessary. Laurie Israel is one such specialist, whose book The Generous Prenup discusses what she calls “the prenup myth” – that they are necessary and make marriages better. www.laurieisrael.com

Once you understand your situation and more about prenups, decide what to do next. If you proceed, you will not need one lawyer but two lawyers for a pre-nuptial agreement. Each of you must have your own lawyer to make this a legal document. Essentially, you are two sides of the contract and you will both need to seek representation, which is different from the estate plan you will need to create together for your married life.

Making the Grade on Your Financial Life

Congratulations you are on your way to graduating!

Senior Spring- Finishing up Final Exams. Writing your final paper. Planning graduation and the parties… An exciting time filled with fun and promise.

You may be pondering what is next? First, I have the perfect, albeit practical graduation gift for you. My gift to you is some pointers for getting you off on the right foot financially. Like your study habits that got you through college – better to start with good money habits with your first paycheck.

Fun Fact: Did you know that John Rockefeller started giving to charity with his first paycheck?

You can set up a system to last a lifetime. Apply your willingness to learn and try new experiences with the information below.

Listen, I know that in college you bought Ramen noodles by the case load and traveled in packs to places that offered discounts. You are excited about the option of fine dining and doing some traveling. However, do not lose sight of those thrifty skills you acquired in college. More than one recent graduate has been led astray thinking they were making the big bucks and forgetting about the financial basics before making that financial splurge. Start with a monthly overview of what you need to spend and where, rather than just collect a paycheck and spending without thinking.

First, think of your financial life in three parts: present, past, and future. All are important components of your new life. Each has several pieces that need to be addressed to adequately address your financial life.

Think Present

Safety Account

While in college, money came in and went out. All that you really needed was a checking account. You may have had a savings account attached to your checking account where you stored money you did not need immediately. Now, you also want a safety savings account for building a cash reserve. This account will grow slowly as you make contributions regularly either through direct deposit of your paycheck or a deposit in person or on-line. Think of this account as the money you fall back on when the unexpected happens and you need cash to maintain your life: a car accident or loss of job.

Not having enough cash to go out with the gang on Friday night is not cause for touching a safety account.

• Have a local checking and attached savings account.

• Open and fund a second savings account without ATM access for emergencies.

Renter’s Insurance

You get home after a long day at work; your laptop is not where you put it. For that matter, your new digital camera is gone. You call the police. Will you ever get your electronics back? Questionable. Who will pay for your new ones? You, unless you have renter’s insurance.

Renter’s insurance pays for your possessions if they are stolen or destroyed by fire. The policy costs just over a hundred dollars a year. You have a flash drive and a portable hard drive; they are one type of insurance, why would you not have renter’s insurance?

If you rent an apartment:

• Purchase renter’s insurance – available through your local insurance agent who sells car insurance. Or ask your landlord the insurance professional they recommend.

• After you pay a deductible of $250, the insurance company will reimburse you for anything stolen or damaged due to theft or fire above that amount.

• The policy is available for pennies a day. Get it!

Health Insurance

You finish college and it is time to explore health insurance. Many young adults have coverage until they turn 26, others do not. If you are not covered by their health insurance. What do you do?

• Learn the lingo about on the health insurance front: deductibles, pre-exsisting conditions, and premiums.

• Consider a job with health benefits.

• Check out your state’s health plan. Many states have coverage for the under or unemployed at discounted rates.

• Consider Catastrophe Medical Insurance for in-between coverage:

  • Designed to cover a major accident or illness.

  • Temporary –usually up to three years of coverage available

  • Policies are inexpensive- often as low as $60 a month.

  • Deductibles are high- $25,000.

  • Minimum health insurance you need while in transition.

Think Past

Student Loans

Unless you are walking off the stage and accepting a huge signing bonus that covers your student loans, then you need to start looking at what you will be paying, what you owe, and how to make it happen. If you have no student loans, you can read on to the next section.

Your federal student loan payments may not require monthly payments until six months after graduation. If you are employed, do not wait six months to start looking at that bill. Start right away by writing a check for that amount. For the first six months, put the check in your safety account. This will help build up the safety account. Most importantly, you will not rise to a level of spending and lifestyle only to have to change it six months down the road.

Make the list of important student loan information and keep your debt information organized.

Other Loans

Line up all your paperwork on your loans. If some are in your parents’ name and you are required to pay, get that information too. Write a list of each loan, the full amount you owe, the interest rate, monthly payment and the term or time you will be paying. Having this on one page or one spreadsheet will help guide you to an understanding of your financial responsibilities. (See above)

If you are traveling, planning on graduate school or still unclear on your plans, talk to the loan company, or find out the details on the web to determine if you can defer payments, how to do it, and how long it can last. Federal loans tend to allow you to defer. Private loans often do not, so you may need to find a temporary job right away to pay the monthly loan.

Credit Cards

Be careful - there is only one entity that is getting a deal on these cards. That is the credit card company. Used wisely, these are a nice tool to have. However, no one needs more than two credit cards. And consider in our society of immediate gratification, credit cards are overused and often lead to abuse.

Get credit savvy:

• Know what interest rate you are paying on your credit cards. You can find this in your statement.

• Protect yourself by writing a check immediately after using the card. Taking the money out of your checkbook creates no surprises when the bill comes.

• If you are already swimming in credit card debt, stop using your card. Use the steps from the student loan section above to lay out what you owe and when.

• Create a plan to pay off the credit card debt you now have.

Credit Score

On a college campus, you often cannot get away with anything. There are always people around. Professors know each other and you have more dorm mates than close friends. You know news travels fast. Your credit score works the same way, someone is always watching.

Good financial actions get reported to credit reporting agencies:

• Timely payments of student loans, credit card debt and car loans

• Your credit history for all loans paid in the past are recorded.

Financial actions get reported and negatively affect your credit score:

• Not paying the overdraft fees on your checking account

• Late payments to your credit card, student loans or car loans

Financial mismanagement can work against you and gets documented on your credit report. Keep your credit score solid by being attentive to your financial life. A credit score will affect your ability to buy a house, get capital to start a business and even some offers of employment. Often, landlords use credit reports when considering you as a tenant.

You need never pay for your credit information. Your credit score is based on your credit reports. So, you need only look at your credit reports – I recommend annually. They are free for you to see and confirm they are correct. Learn more at: www.annualcreditreport.com.

Think Future:

Job Choice

Deciding on a job is a critical time. Do not forget to ask what employee benefits are provided as part of the job. The better benefit package a company offers may not make their salary look competitive. When comparing opportunities, review all aspects of what the company is offering you.

Then when you start, sign up for the benefits and take advantage of them. The benefits an employer may offer you include:

• Health Insurance

• Disability Insurance

• Life Insurance

• Retirement Investment Options

Disability Insurance

This pays you if you are off the job due to injury or illness. Some companies provide it as part of their benefit package. Some require you to pay a minimum each month to get coverage. This insurance pays you a part of your monthly salary if you are out of work due to disability.

Although this type of insurance does not seem to fit a healthy twenty-year-old, the majority of disability claims are from 25–36-year-olds. Think last time you were mountain biking, skiing through the trees, or diving. If those close calls had happened, then being out of work would cost you in more ways than one. Younger people tend to be more active, so need disability insurance too.

Life Insurance

This insurance pays an amount to someone you designate upon your death. Think about who you would benefit most from this added cash. Your best friend may come to mind. However, review your student loans. Federal student loan requirements typically stop at your death. If your parents co-signed any of them, they will be responsible for paying for the loans even after you die. Choose your beneficiary wisely.

Retirement Plan

Start funding your retirement right away. Even though you are young, this one good habit can pay off for a lifetime.

• Saves income taxes.

• Builds investments for your future.

• Provides hands-on learning about investments.

• Some companies provide a match in dollars if you contribute.

Roommates

One young client of mine could not afford a studio in Boston and still pay student loans and have discretionary money. I discussed the possibilities of roommates so she could keep her financial commitments. Sharing expenses stretches your paycheck and makes financial sense. Instead, she took a second job on weekends so she could live alone. Remember:

• You always have financial options.

• Take the one that works for you.

On Graduation Day, enjoy knowing you are prepared to take on your financial world. The cash that makes its way into your graduation cards can be used in multiple ways to jump start your financial life. You can start your safety account, fund your apartment’s security deposit, or pay off some debt, along with having some extra fun.

You are moving into a new world filled with fun, challenges, and opportunities. This does not carry a grade. There will be no final exams or papers. The outcome does affect your life. The financial decisions you make as you enter the post college world can make your road easier in the years ahead or trip you up a bit. Keep these financial tips handy to get started and keep your financial stash growing.

Follow Your Dreams

Starting a business is not for the faint of heart. Nor is pursuing any vision you have for your life. Following your dreams involves considerable learning and preparation. Believing in yourself is where it begins.

From there, know that lessons will be learned. There are ebbs and flows of money, people and joy. Following your heart’s desire makes it easier, not easy. The life lessons are invaluable no wonder what endeavor you strive to achieve.

Here are the lessons I learned along the way:

1 Go for your dreams.

Have a plan for your life and your dream. I worked part-time for an old boss doing auditing for almost a year before I made a living in my business.

2. Starting a business is not done in a day.

A business plan takes time to create. Gathering resources and equipment to do your business is critical and time consuming. Allow a period of time to unfold rather than thinking you are starting your business on the day you decide to establish it.

3. Know who your supporters are.

My parents had taken the leap thirty years before me. So, I knew when I went to complain or was stressed about this undertaking, they would listen. They may not understand the details of my profession, but they had been there. (Unlike another relative who had told me, “Get a job then,” when I vented at the kitchen table. She had not ever been a part of a small business.) Experience makes the greatest supporters.

4. Build a network.

Gratefully, right off I was welcomed into an informal group of wonderful women who were all fabulous Certified Financial Planners. Were they competition? Maybe but not really. We were all different and supportive of each other and referred to each other. That experience led me to New England Women’s Business Owners (NEWBO) where I met other women in different careers but sharing the same challenges.

5. Get experience.

Before I started my own financial consulting business, I worked for two other firms that did financial planning. They may not have been the best paying jobs but the experience I received helped me be clear on how I wanted to work and what was important for the vision of the business.

6. Seek an education.

In graduate school, I learned the importance of a business plan. Laying down on paper what I wanted to do created clarity. In addition, already having attained a Certified Financial Planner designation gave me, and therefore my new business, credibility from the get go.

For me, owning a business has been an honor because of the people I serve.

Go for your dream. Be Practical. Be Patient.

Being Fair & Why You Need to Care

My sisters graduated from high school in 1974 and 1972. The Fair Credit Act was just being talked about and implemented. This gave women the right to equal status in banking, credit and therefore, home ownership among other important financial life building.

Their children are now in their thirties so that was only a generation away. Given how long new legislation weaves itself into the our society, fifty years is not that long. So many women are still challenged in this area. Whether they were raised in families where men did the money or were not encouraged to be independent, past history can impact life though it is not too late to change. Ever.

The best way for women to claim what you have as talents and treasure is to not undermine your skills or misuse or misrepresent your treasure. Empower ourselves to learn more and be more of who we are. Our men too can do this for themselves and for the women they love.

My parents were of a different generation and led the way in our home. My Dad was raised with six sisters by a strong Mom who held their poor farming family together. He learned more about women in that family to set the basis for his life time – and prepared him to have three daughters.

My parents always wanted us to act like “Ladies and Gentleman.” Though my parents sentiments were set on their 1950s coming of age, my Dad saw no reason that his daughters were not equal. He expected them to have equal rights when it came to home ownership, banking and salary, which is how he treated my Mom. I can still recall his shock when he learned from me in the late 90s that there was a gender pay gap. My Dad has been dead almost fifteen years. Women are still receiving 70% to each of men’s dollar earnings. Gender Pay Gap Widens as Women Age (census.gov)

In 1972, Title Nine was a game changer for young women in school sports (pun intended.) The Fair Credit Act was a major shift for the life of all women in 1974. The impact was felt across business, banking the United States but that does not mean everything has changed. My Sister, Title IX and Me (Next Avenue)

Rights of women still vary across our world. Driving, voting and face coverings are political points in some countries. Today’s women in power create press attention. I welcome the day in society when media stories do not mention inequality or the “the first women….”

On a recent 60 Minutes episode, I learned about SOLA. This is a school for Afghan girls in Rwanda. With the Taliban again in power in Afghanistan, the country becomes the only one in the world that does not allow women to be educated. Watch 60 Minutes: Kherson Under Fire, The Girls of SOLA

We are not out of the woods yet. Let’s not have the power in legislation we gained in the US in the Seventies stop there. Let’s use our voices and financial power to help the causes that resonate with us. We as women and all our supporters- fathers, husbands, partners, friends and brothers – have got us to this point.

Let’s take care of ourselves and others to grow our talents and treasure for all good – whether giving to charity, helping a woman up or creating a strong independent life. This is all financial and personal. Celebrate and act with the thought of International Women’s Day in your life every day.

If you want to read more on this legislation and the financial progress of women during this March which is women’s history month. Check out this article

Financial TLC

Financial TLC

February is the month we associate with love, caring and cuddling, because of Valentine’s Day. Yet, Love is always in fashion. Love of yourself, your partner, your family and your friends reign throughout the year. 

This month I want you to give yourself some Tender Loving Care. Whether you are coupled, single or searching, taking care of yourself is critical. I want to encourage Financial TLC. In the midst of the life, we often forget to take care of the details. True TLC is the key to a solid financial life.

What is financial TLC?

Transparency

Be honest about money: with yourself, with each other, and with loved ones. Write down and review where your financial life stands: income, debt, investments, bills. Looking at the list in black and white often gives you a reality check that no other system can. This is critical to share with yourself first and foremost. You need to know where you stand and what your commitments are.

Your partner needs to know as relationships are tied together. In marriage, you are bound legally. Even if you are not married you may have shared commitments like rent, pets, and family. Knowing about the other commitments your partner has makes assessing your situation a lot clearer.

Link the Details Together

Know what the accounts are and where to find them for each other. And be sure the bills are in both names.

If you are single, you may feel you are only responsible to yourself so there is nothing else for you to do. Your details will matter to your loved one if you were critically ill or die suddenly. They would have to pull the pieces together. So have a file with the details that they would have to know to handle your financial life. Tuck away the details. You do not have to share everything but let someone who loves you know where they are.

Conversation - Caring Conversation.  

There is embarrassment, there is past money flaws, there are emotions involved around money. We all have them. The secret is not to let them rule your life. The best way to do this is to share them in a way that works for you. This may be journaling, therapy or a good heart to heart with a friend. If you are part of a couple, talking to your partner is not optional, it is a necessity. Financial intimacy is as critical as any other part of your relationship. 

The bottom line is love relationships are impacted by money. TLC is investing some time in your money relationship. TLC and honesty with yourself and others will demonstrate love on many levels.

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Learn More in these Articles:

• Opinion: Couples with Strong Relationships have these Money Issues in Common
  -MarketWatch

• 5 Things to Discuss Before Moving in With Your Partner
  - Millie Magazine

The Benefits of Simplifying

Simplify, Simplify, Simplify but Not too Much

Tis the gift to be simple, 'tis the gift to be free,
Tis the gift to come down where I ought to be;
And when we find ourselves in the place just right.
— Shaker Folk song by Joseph Brackett

Money is good for so many aspects of our lives. Yet, the management of our financial lives can distract us from happiness. When we are overwhelmed with statements, options and misinformation, we may make impulse decisions or ignore our money all together. Both can land us in more turmoil.

Focus, time, attention and energy are required to manage money whether you have very little or are gifted with large accounts. You need an overall strategy to prevent your constantly thinking of your financial concerns and the market.

Your cash and investments accounts tell a story; the story of you how you treat your money. Create a cash management plan that matches your expenses to income and demonstrates your self-care. No matter how much or how little money you have coming in, taking steps to gain clarity around your money is critical. Money is only as valuable as what we spend it on. We chose what to spend it on, but we first need to know what we have.

As with anything you organize, the initial set-up demands time and a plan to establish. After the system is in place, there is less time and energy involved to maintain it.

First, start with a cash management plan. 

This is a tool to understand where your money is being spent. This will also help you determine how many money accounts to actually have. There are three accounts everyone needs: a savings, checking and separate safety savings account. Beyond that, the more moving pieces in your life, the more bank accounts you will need.

A homeowner may want an account to save for real estate taxes, capital improvements and maintenance. A couple with young children may want a separate childcare account so they always have the cash to make a daycare payment. Keeping your funds separate this way prevents confusion and ensures the money is there when you need it. Plus, though at first glance more accounts sound complicated, there is less need for calculations as each financial need has a place.

Consolidate Some of Your Investments

As far as investments, diversity is a great approach to investing. However, if you have several investment advisors or retirement accounts from previous employers, you could be working against yourself. Variety does not lead to diversity. Rather, the complexity may lead to a lack of your comprehension of what you are investing in, what your options are and how many accounts you do have.

Create a better grasp on your investments by gathering up your investment statements and decide if you need to merge all your 40lks, 403bs and/or IRAs. Then, take the steps to make that happen. This month. Such an administrative step is easy to put off, so give yourself a deadline and envision the fewer emails and paper you will collect with fewer accounts. Most of all, with less to manage, you will be sure to have time to understand and choose your investments wisely in 2023.

If you have different investment advisors, understand what they do for you and how they work. Find out what they charge, specialize in and how they can help you even more. Do some research and perhaps merge these accounts as well. First, learn more about your Investment Advisor.

Finally, Take Time to Relax

After making progress, you will have more time. Spend time on your passion. Enjoy your family. Go for a walk in the woods. Or treat yourself to some music. Here is an instrumental version of Tis a Gift to Be Simple. (The words are provided if you choose to sing along.)

The Weave of Life

Attitudes and experiences around money impact mental, physical and spiritual life. Money is a part of living, yet money is not often integrated into our lives, and not talked about in a holistic way, if at all.

Financial stress accounts for missed work and other ailments. For example, we all know folks that throw out their backs when worried about money. Or people who are so preoccupied by money it becomes the focus of their career and life to the detriment of their whole being. Or the other extreme, individuals so dependent and present in the spiritual world that they do not take care of themselves in their human capacity. All in some way forget that money is a tool that must be used properly in the process of finding a fulfilling balanced life.

There are those who flow through life happy and fulfilled but money is neither the issue nor the problem. Like Annette, a woman who runs her own gardening business and makes a modest living. She is always grounded and happy. When asked the secret of her content, she says, "I love where I live and do the work in this world that comes easiest and brings me joy."

This holiday season weave some solid changes into your life by starting a new system for your holistic health. If you want a better financial life:

First, is making the decision to improve your finances.

Second, have gratitude for where you are at and what you learned so far.

Three, enact a plan to improve one way of handling your finances.

Initially, the above will take time. Consider it investing your time for a better long-term financial picture. When your finances are sick they need extra time devoted to them. Once they get healthier, they need less time devoted to them. A consistent plan makes finances healthier.

Think of it as your health. If you are sick, it takes days in bed to recover. Once you are better there is still a slow upward curve as you struggle to full-fledged wellness (or back to normal.) This struggle and the timeline are in direct relation to how sick you are. There may even be a relapse.

The wellness part applies as well. If you do not take regular care of your health with the basics: sleeping, eating healthy food and exercising. Then, of course, you are not going to stay healthy. For the most part you maintain the semblance of order in your health life with the proper food, vitamins, stress relief and exercise. In order to maintain your financial health, you must pay your bills, have an income, review your expenses and maintain your checkbook with a regular routine.

The law of physics applies in finances: For every action there is a reaction.

Your past actions made your financial life what it is today. If you do not like it, you can change it with action.

Take one of the steps below today to move toward a healthier life:

• Check your credit report.

• List all your debt with the monthly payments and interest rates.

• List all your assets from cash, to home, to investments

• Start a daily gratitude list

Once you get in the habit of reviewing your finances, you will find a system for you. Then, like a client said of her handwritten monthly list of the assets and debts and debts, “It is so satisfying and simple.”

Personal finance does not have to be complex. See the list above and my blog for ideas. Try a new approach and gain some health in the process.

With gratitude for your reading each month. I am off to pay a bill. What about you?

Elders of Excellence

Those gone before me have taught me so much. I am grateful and am always trying to give back in anyway that I can.

This spring I was busy supporting UPenn Memory Center. We did a financial handout together and I was asked to speak at an event they sponsored.

With the rise in dementia, the brain fog of COVID, concussions and issues around mental health, I believe this information is relevant to all, not just our elders.

Please take the time to watch the recording of the event. The video is an hour long but if your time is limited, I come on around 24 minutes: https://youtu.be/2H3ImHjsDxQ

If you would like the handout to accompany this piece, you may download it here.

Be Prepared in Life and Finances

Observe what’s blowing in the wind lately? A range of economic factors and change. The winds of the future are becoming the winds of now. The past year conditions are shifting in the economy along with a raging war in Europe.

Here is the thing, even economists who make a living studying this stuff cannot predict a depression or recession. Yet, everyone is talking about the possibility of one soon, if it is not here already. No one knows for sure. Professionals can only confirm its existence after they have the statistics from the past months and review a trend. That is why no one used the term recession in 2007 or early 2008 – The numbers weren’t in yet. Yet, many people felt the turn in their homes, loss of homes or jobs by then.

Inflation increased shockingly fast and has now leveled off. Who can help being complacent? Yet, even when picking up staples at the grocery store it is hard not to notice the small increase in prices. Blue Cross/BlueShield and other insurers been approved for significant price increases. Is there more to come?

There are so many economic issues to consider including the trends and cycles witnessed in the past.

As global uncertainty surround us, this does not stand alone as a symbol of potential economic change. Combined with the other factors fluctuating, we should at least pause to rethink and revisit our lifestyle.

Whatever the coming school year brings, business as usual is not expected. Expect the unexpected. Be ready with cash to take care of yourself. A strong mental fortitude to weather whatever is going on in the outside world is essential. A little forewarning is critical.

My point is not to instill fear, but rather action and positive steps to take care of yourself. I guarantee that I do not know what will happen in the next year. Yet, I know from experience that most people get complacent and expect the same over and over again. Then, act surprised when things change. That happened in 2000 right when the tech bubble bust. Then again, in 2008 with the housing crisis. The only thing we know is that life changes. We do not know when. Read the winds and pay attention.

So now is the time to reconfigure your finances. A saying I have heard over the years but do not know where it originated, describes how to think about this potential change:

“Hope for the Best & Tie up your horse.”

Your “horse” is your personal world. We always have control over that piece of life.

So I leave you with a suggestion to make a different choice this month to reign in your horses.

Go do one thing differently this month: Pay off some debt, save some extra money, learn a new skill. These things are what you can do to take care of yourself and your family no matter what is blowing in the wind.

Financial Freedom: Watch Your Language

“Let Freedom Ring.”

We all associate our country’s freedom with that phrase. The ringing of bells symbolizes freedom in this country. So does some of the most famous songs – our national anthem and “America the Beautiful.” Sound touches something deep inside us.

What we hear impacts us greatly, not just as Americans but also as human beings. Words get into our psyche and become a part of us. With enough repetition, we can begin to believe anything we hear.

This applies to money. We are what we habitually hear. To truly know your money self, pay attention to what you hear on the job, at home, while out with friends. There is often a tendency to focus on the negative. We share our complaints to build camaraderie. We are suffering from language problems. Change your language if you want to change your money attitudes, which is the beginning of improving money’s place in our lives.

The phrase “I cannot afford...” should be the first to go from your lingo. With this phrase in use, there is no way to allow freedom to ring. It encourages folks to use lack of money as an excuse to not act. Saying “I cannot afford” takes the responsibility away from the speaker and therefore takes their power of choice away.

You can afford to live how you want within reason. What you are doing, what all of us are doing is making choices based on our resources and experience. Begin saying, “I choose not to” or “That is not a financial priority.” This demonstrates your involvement in the decision and that you are making choices. On the other hand, ’I cannot afford” shifts responsibility. The speaker becomes a victim, using the phrase as a rationale - it is beyond my control, implying you have nothing to do with it.

Making the effort to use language that demonstrates ownership and responsibility around money is what is important. Positive language changes our attitude around money when heard often enough.

What you are doing, what everyone does, is making choices based on our resources and experience. Simply shifting to saying, “ I choose not to” or “That is not a financial priority” demonstrates your involvement in the decision. You are making the choices. You are not a victim to your financial circumstances. You can afford to live how you want within reason.

If you decide to get a more expensive house with a larger mortgage and maintenance expenses, then you may not have as much discretionary income to spend on vacations, clothes, or a big screen television. It does not mean that you cannot afford the big screen television, it simply means that you have spent your money elsewhere.

All of us make decisions of this type everyday- specific to our lifestyle choices. These decisions are based on priorities and values and experience. Our decisions reflect what is important to us.

In this time of celebrating our political freedoms, create your own financial freedom month. Make the emphasis this month to focus on the positive. Pay attention to what sounds are all around you. See what you can learn from watching yourself and shifting the sounds of your language. Here are the steps along the path to freedom:

1. Pay Attention to the Words You Use:

Ask yourself: How are you regularly talking about money? What words do you use?

Are you consistently telling your children that we cannot afford this or that?

Are you regularly complaining to your friends that you do not get paid enough, reinforcing a negative financial attitude?

Next time you hear yourself, catch yourself, pause before continuing. Think about what you really want to say. Then, overtime you may stop yourself before you get started. The goal is to stop totally with the negative financial comments.

2. Focus on the Positive:

When you are trying to make a change, it is important to replace the habit with something positive. Your goal is to start talking more positively about money. Being positive may mean displaying gratitude for your weekly paycheck, looking at the checkbook as partially full rather than dwindling, or choosing your words carefully around money. Pick one way to focus on as your change in language is being enacted. You may even want to elicit the help of a friend or family member for mutual support. Make it game where you are calling each other on ways to improve and encouraging the new positive language.

3. Reward Yourself:

Everyday you do not succumb to negative talk, give yourself a small treat; a walk, phone call to a friend or a soothing cup of tea may just be the ticket. Though the treat may involve money, it does not have to cost anything. Being kind to yourself is what it is all about. Positive actions results in positive language. Treat yourself well. Reminder: It takes thirty days to create a new habit, so keep it up.

This month “Let Freedom Ring”with money. Listen to your words. And create the sounds that open you up to more abundance in your life. Let Financial Freedom Ring!