A Cell Phone Case That Protects Your Phone, Your Money, and You

May 05, 2016

In What Your Financial Advisor Isn’t Telling You: The Ten Essential Truths You Need to Know About Your Money, our CEO, Liz Davidson, writes about the connection between our financial and physical health. In particular, financial stress is one of the leading forms of stress, which has a significant impact on our physical health and well-being. I recently made a purchase that also relates to both financial and physical wellness. It’s a cell phone case called SafeSleeve.

Aside from protecting your phone, the main purpose of the case is to protect your physical wellness by redirecting potentially harmful radiation from your cell phone away from your body. While it hasn’t been proven conclusively, many experts are concerned that exposure to this radiation could cause cancer. In fact, even the cell phone companies recommend generally keeping the phones several inches away from your body. But if you tend to keep your phone in your pocket like I do, that could be a problem. Someday, people may look back on our cell phone use the way people now look back at smoking cigarettes.

How could this case protect you financially as well? It obviously can help protect your phone from damage, which is important considering the cost of a new smartphone. If it works as intended, the value of avoiding cancer is arguably priceless.

It also includes slots to keep 3 credit or debit cards. This isn’t just for convenience though. The case acts to protect those cards from someone using an RFID reader to “skim” information from your cards and use it to make fraudulent purchases. Even if you don’t buy into the threat of RFID skimming, it can save you the expense and hassle of buying and keeping a wallet in addition to your cell phone.

So are there any downsides to the case? At about $40, it’s expensive for a cell phone case, although it was cheaper than competing radiation-blocking cases that lacked the wallet component. Another drawback is the risk of keeping your cards with your phone since if you lose it, you lose your cards too.

A third flaw is that there’s no space to hold cash. This could be a problem since some places charge more for using a card or don’t accept plastic at all. There’s also evidence that people tend to spend more with cards than with cash. Finally, I think it’s prudent to carry some cash at all times in cash of a power outage in which  credit card machines and ATMs aren’t working so I end up keeping cash in a separate money clip anyway.

Maybe you’ll never drop your phone, you won’t ever have your cards skimmed, and it will turn out that cell phone radiation doesn’t cause cancer. Then again, there’s a reason we keep emergency savings, buy insurance, diversify investments, and draft estate planning documents. Sometimes it’s better to be safe than sorry. At the very least, $40 is buying me some peace of mind…and less stress.

 

 

 

How to Teach Your Kids About Money

May 04, 2016

A recent survey on kids and money revealed that 4 out of 5 Americans believe that an allowance helps to teach children the value of money and financial responsibility but only 68% actually pay an allowance. With student loan debt growing at an average of over $2,700 PER SECOND, it’s essential that kids enter college with a baseline of knowledge so they know what they’re getting into with this debt. If you’re not modeling good behavior for your kids, you may be setting them up for financial stress down the road. I don’t have kids yet, but I have a lot of plans for how we will ensure that they set themselves up for financial success. Here are some ways to teach your kids (or nieces and nephews) about money before they have to start making important decisions on their own:

Start early: As soon as kids learn how to ask for things (or start throwing themselves screaming on the floor of the grocery store because you won’t buy candy), they can understand the concept that they have to wait to buy something by saving up for it. Instant gratification is a problem that plagues humans for life, but teaching kids how to delay it is a predictor of future success. Whenever your child receives money, have them add it to a jar or piggy bank and consider keeping a paper record to instill banking knowledge as well. Every so often, help her count to see how close she is to her goal. Help keep her eye on the prize by explaining how much closer she is to reaching the goal with each addition.

Explain trade-offs: Once your child enters school, he is ready to learn that when you spend money on one thing, you’ll have less to spend on another. Use grocery shopping as a way to demonstrate this. Give him a budget for his own treats, and then as he’s making his selection, explain how buying expensive yogurt might not allow him enough to also buy his favorite juice boxes. Share your own financial decision making as you’re shopping for the household as well.

There are also a bevy of free web-based money games out there. Try the Great Piglet Challenge or Kids.gov for a variety of fun games. Heck, try them yourself. (I’ve yet to conquer the Great Piglet Challenge!)

Consider an allowance: Whether or not you think kids should “earn” money through household chores or if you consider pitching in to be a part of family life, an allowance is a great way for kids to learn how to spend and save. You can also explain how compound interest works once kids reach the “tweens” stage. Use real numbers and say, “If you save $1 per day starting now, you could have over $26,000 by age 65. But if you wait to save until you’re 30, you’ll only have about $15,000.” This may make it easier to talk your tween out of buying a daily sugary snack at school and instead save the money toward a new video game.

Consider college costs: Whether or not you’ll be able to afford to send your kids to the college of their choice, discuss how their decision will affect you financially. If your child will require financial aid in order to pay for school, share your own struggles with debt as a way to explain the consequences of student loans. And don’t shy away from having them take a part-time job to save toward spending money in college. Understanding how hard it is to earn money will make them appreciate the value and think twice about blowing it all on beer and pizza…just most of it.

Drive their own decisions: Once your teen is ready to start driving, instead of just handing her the keys and crossing your fingers that she’ll drive safely, put some of her skin in the game too. My parents had me take care of my own car insurance when I got my first car, which was a great way for me to learn several money lessons. Instead of doing it for me, my mom had me call their insurance contact to ask to be added to the policy. The agent walked me through the additional costs and I handed over money to my dad each month to pay my share.

If I was late or short paying, my car was parked until I paid up. I not only learned how to budget for my bill, I was empowered to take responsibility and when it came time for me to get my own solo insurance policy, I knew what I was doing. Thanks, Mom and Dad!

Most importantly, it’s vital to model good money habits for your kids. We all have our own money stories – our personal frame of reference based on our own experiences growing up around money. For most of us, the biggest influence in our stories came from our parents. Set your kids up for success by rewriting your own story to one of success and financial security.

 

11 Easy Ways to Save Money Without Changing Your Lifestyle

May 02, 2016

Does saving more money mean you have to make big sacrifices? If you are trying to find wiggle room in your budget to apply towards important goals like retirement or paying off debt, the first place to look is at the easy hacks. Where can you cut expenditures without drastically altering your lifestyle? Here are some ideas, all of which I have personally tried:

Spend less on hair and nails. I live in NJ, where big hair and gel manicures aren’t just something you see on reality TV shows. That kind of primping at the hair or nail salon is expensive.

Switch from coloring your hair to less frequent highlights and you can save $100 per month.  Doing your nails at home can save another $40-$50. For guys, switching from a salon stylist to a barber can save you another $40.

Give up restaurant beverages. Drink water instead of soda or alcohol and you can save 10-20% on the cost of eating out. If you eat out frequently, including lunch at work, you don’t even have to do this all the time, just most of the time, to see big savings. Your employer doesn’t provide beverages at work? Bring your own from home instead of using the vending machine or corner convenience store.

Join the library. I once had a Very Serious Book Habit. I adore book stores, read voraciously, and could easily spend $150 per month or more on new books and magazines. If I didn’t like the book enough to keep it, I’d trade it in for store credit after I was finished reading it.

I reduced my book buying habit reluctantly. First, I gave up magazines in favor of the library copies and then I made a concerted effort to also read library copies of those books I was pretty sure I didn’t want to own. I now use an e-reader and buy fewer printed books, which has cut my book buying considerably.

Go from two cars to one or even none. Do you really need two cars?  Maybe, but maybe you don’t.

Try living with one car for two weeks and see how you do. Can you take public transportation, carpool or catch a ride to work from your spouse? You may find it’s less painful than you expected. Giving up a car can save you as much as $700-900 per month. I know because I did it myself.

Shop for insurance. You may be able to save by changing your home and auto insurance. Every few years, shop around to compare coverage and prices. The right coverage could save you $100-$200 per month.

Host a swap party. Clothes, accessories, toys, holiday cookies, unopened gifts, books – almost anything could be swapped! What is unwanted to you could be valuable to someone else and vice versa. For more tips on hosting a clothing swap party, see this article.  The same principles can be applied to any swap or exchange party.

Share babysitting. A reliable babysitter can cost $10-15 per hour in my area. Babysitting during a night out with your spouse adds $40–$90 to the total cost of the evening.

What can you do if you don’t have family to help? Form a babysitting club to trade nights out with your friends. You watch their kids one time and then they watch yours the next.  Some friends I know took it a step further, forming a neighborhood group. Once a month, one family hosts a pizza/movie night at their home, while all the other parents get a night on the town.

Fill up at the cheapest gas station. Our neighborhood suffers from zip code inflation in gas prices. A favorite hack of my husband, Steve, is to take a certain route home from work that passes a less expensive station and fill up there. The result? He spends 30 cents less per gallon.

Quit the gym and mow the lawn. Another one of Steve’s hacks is that he thinks of yard work as his personal exercise program. Instead of paying a gym membership, he mows the lawn and chops wood, doing something every day as his workout.

He decided he wanted to do this on purpose, even though we planned for landscaping in our budget. Did I mention we live on top of a hill and have three acres and abundant trees? Needless to say, he is very fit, and our bank account is fatter.

Stock a snack box. How many times a week do you pick up a snack at a coffee shop or store? Those lattes and muffins can easily add up to $3-10 per day. Add in kids, and a quick trip to Starbucks is twice as much. Keep a well-stocked box in your car and your office with easy snacks.

Not ready to give up the coffee shop coffee? I don’t blame you. (I am a fan.) Consider ordering a less expensive version, such as an iced coffee instead of a fancy coffee drink. You can save 50-60% on each cup.

Fill a gift closet. If you have kids, you know that birthday party gifts can cost upwards of $100 per month. Plus there are always hostess gifts, teacher gifts, office gifts, etc. It’s easy to forget those expenses, but they can really eat into a monthly budget.

Set a maximum amount you’ll spend on them for the year and then shop in advance. We recently bought 8 ultra cool birthday presents on Woot.com for only $80! Stock up on inexpensive small house presents and interesting wines when you see them on sale so you’ll always have something to bring when you have dinner with friends. Better yet, shop for holiday gifts right after the holiday season has ended, often for 75-85% off.

Do you have an easy way to save money without changing your lifestyle? Please email me at [email protected]. You can also follow me on Twitter at @cynthiameyer_FF.

 

 

How Financial Wellness is Like Weight Loss

April 28, 2016

I always like to say that financial wellness is a lot like weight loss. When I came across this article in Vox about “surprisingly simple tips from 20 experts about how to lose weight and keep it off,” I realized just how true that is. Here are the weight loss tips and how they apply to financial wellness:

1. There really, truly is no one “best diet.” Scientific studies have found that all of the various diet plans have about the same modest long term results. What matters is finding one you can actually stick to. The same is true of money management systems and asset allocation strategies.

2. People who lose weight are good at tracking – what they eat and how much they weigh. They tend to count calories and weigh themselves at least once a week. In the same way, you need to track or otherwise limit spending, continually re-balance your investments, and periodically run a retirement calculator to make sure you’re still on track.

3. People who lose weight identify their barriers and motivations. Like with diet and exercise, we usually know what to do with our finances. The hard part is actually doing it. Start with knowing the “why” that motivates you. Then look for the barriers that are standing in your way of taking action.

4. Diets often fail because of unreasonable expectations. People tend to overestimate what they can achieve in the short run and underestimate what they can achieve in the long run. Don’t try to save too much too fast. Instead, set big long term financial goals that motivate you and then see how much you need to save to achieve them.

5. People who lose weight know how many calories they’re consuming – and burning. Similarly, you need to know how much income is coming in and going out. Making sure the latter number is lower than the former is the only way to increase your wealth.

6. There are ways to hack your environment for health. For example, don’t surround yourself with unhealthy foods. Simple things like where your food is served from and what size plate it’s on can also affect how much you eat. For your financial life, don’t put yourself in situations where you’re likely to spend more and try to automate your savings as much as possible.

7. Exercise is surprisingly unhelpful for weight loss. More accurately, exercise alone isn’t very effective since people often eat more to compensate for the calories they burn. Earning more income can have the same effect when we automatically spend more as well.

8. Weight loss medications aren’t very useful. Neither are “metabolism boosting” supplements. Complex, sophisticated, and high-fee investments are the weight loss medications and metabolism boosting supplements of the financial world. Stick to the basics.

9. Forget about “the last 10 pounds.” If they’re that hard to lose, people generally gain them back. Most of the health benefits came from the other lost pounds anyway. Likewise, trying too hard to save more can backfire if it starts to feel like too much deprivation. Allow yourself to splurge now and then too.

So what’s the main thing that weight loss and financial wellness have in common? They are both about making small changes over a long period of time. Instead of looking for the quick fix, find an approach that you can stick with.

 

How to Get the Best Deal On a Car

April 27, 2016

My first car was a beat-up 1987 Ford Tempo that I called Shirley Tempo (nerd alert!). I paid cash to a family friend who had been using her as a loaner at his auto repair shop. Shirley got me around town in high school but when I went to Kalamazoo for college, my dad helped me negotiate for a slightly newer Geo Metro (aka “Ginny Geo”) – a car that could make the 200 mile trip without breaking down. By senior year, Ginny’s radiator was shot, the door locks didn’t work and my mechanic deemed her “unsafe to drive.” Needless to say, I was anxious to get a “big girl” car now that I had a “real job” upon graduation.

As soon as I returned from my graduation trip the summer after college, I found myself at the Saturn dealer test-driving a fully loaded coupe. Of course, I was in love and I signed a lease on the spot for Sally. Fast-forward a few months when my student loan payments kicked in and I was wishing I’d done a little more shopping around for that car. Sally was super fun to drive, but her payments were WAY outside my budget.

As my husband and I begin shopping for a bigger car now that his sedan is starting to wear out, we are being much smarter about this purchase. Here are some of the tips we’re using to find the best deal on a new ride:

  • Shop at the end of the month. The car sales guy actually told my husband this. They have quotas to meet, so if you head to the dealer toward the end of the month when the pressure’s on to meet that quota, you should be able to negotiate a few thousand more off the price. That could be a negligible amount to the dealer, but a nice chunk in your bank account.
  • Consider buying certified pre-owned. You’ve probably heard that a new car loses more than 10% of its value the minute you drive it off the lot. By getting in line as the second owner, you are paying significantly less for an almost-new car that still has warranty protection.
  • Know the wholesale price. If you just can’t resist a new car, at least know what the dealer paid for it. This is easy to find now by searching the make and model of your dream car along with the phrase “factory invoice price.” That way if the sales person tries to tell you they’re “losing money on this deal” when you’re negotiating (and you should at least try), you’ll know if they are trying to pull as fast one.
  • Remember that a car is NOT an investment. A car is what we CPAs call a depreciating asset. This is financial speak for it loses value over time and unless you’re a car collector, you will be selling the car for less than you paid for it. Remember that when you’re thinking about financing. (Try to pay as much in cash as you can).
  • Get full value for your trade-in. We took our car to CarMax and they gave us a trade-in estimate for no cost. This is just a best guess, but gives you a starting point when negotiating with the dealer. Edmunds and Kelley Blue Book are good online sources and you might also take it to a dealer to see what they will offer you. Depending on the make and model of your car, the dealer may be seeking used cars. SUVs are particularly hot right now due to low gas prices.
  • Don’t get cheap and choose an insurance deductible that’s too high for your savings. If you have a $2,000 deductible, you should have $2,000 on hand in case something happens. Use these best practices from my colleague Tania, who learned the hard way to make sure you’re properly covered.

Finally, as exciting as buying a new (to you) car is, try not to be impulsive. Take your time in researching and test driving to make sure you’re getting the best deal while also making a purchase that fits your lifestyle and budget. That new car smell fades pretty quickly. A too-high car payment takes a LOT longer to wear off.

 

 

Detox Your Finances

April 26, 2016

Every spring, I get the itch to clean. It drives my family crazy but I cannot stand clutter. If I see an item either not being used or not organized for a future purpose, I am probably throwing it away. The great part about my habit is that my family is scared to leave anything out so I rarely have to pick up behind anyone. My reasoning is that everything is either working towards a goal or working against a goal – in this case, clutter.

Finances can be looked at the same way. Either what you are doing is working towards your goals or working against your goals. This is a great time to detox your finances of anything that may be toxic to you reaching your financial goals. If you are not sure where to start, consider this as a starting point:

Did you get a big tax refund or owe Uncle Sam a check? The goal should be to break even – not give the IRS an interest–free loan or owe money. Use the IRS withholdings calculator for guidance on how much withholding to claim on your W4. This is extra money that could be used for financial goals like savings, getting out of debt or college.

Do you feel like your money goes into a black hole the second you get it? Consider detoxing your budget of expenses that are wrecking havoc with your finances. These are what I consider to be the most toxic:

Eating Out: This is like a vortex that sucks money from you. Consider bringing your lunch to work 2x a week. If you go out with friends, eat before and have a large appetizer or salad or soup

Cable: There are so many options today that make it easy to cut the cable cord. Consider streaming devices like Google Chromecast, Apple TV, Amazon Fire TV or Roku to stream TV and movies through services like Netflix, Hulu, and Sling TV so you won’t go into television deprivation.

Mobile Phone: Contact your cell phone provider about discounts on your cell phone package.  Another consideration is to use tier 2 carriers such as Cricket, Metro PCS, Boost or Straight Talk that generally work with the same cell phone towers as the bigger carriers like AT&T, Sprint, T Mobile and Verizon but at a fraction of the cost.

Are you looking to make a major purchase like a house or car? Get an annual free credit report from all three reporting agencies from websites like annualcreditreport.com. Once you get your credit reports, review them for toxic information using websites like Nolo.com. If you find errors, you can dispute them online. As you review, pay close attention to the following:

  • Review your personal information to make sure all of your information is correct – your name, Social Security number, marital status, etc.
  • Review the your account history to make sure that it is accurate.

Don’t just do spring cleaning. Take the time to detox your finances as well. It can help rejuvenate your New Year’s resolutions and help ensure that all of your finances are working towards your goals.

 

Don’t Overspend on Assets That Depreciate in Value

April 22, 2016

My middle child, who is merely days away from taking his driver’s license exam, thinks that it is a major hardship that he isn’t going to have a car on day one after he gets his license. That’s not such a bad problem to have considering all the problems in the world. I asked him about the kind of car he’d like to drive and he said he wouldn’t mind a new Mercedes or BMW…a Ferrari would do. In a perfect world, a Lamborghini or Bugatti would be his preference.

That’s when I reminded him that the world is not perfect and that it was time for a quick re-visit of our reality. I had my hiking boots in my car and told him he is going to get a car that resembles those old hiking boots, probably not a car that a high level executive would drive, but it beats walking or riding a bicycle. My rationale: a first car is far more likely to be dented, dinged and wrecked than a car that you buy after 20 years of driving experience.  Inexperienced drivers pay higher insurance rates because they are a higher risk, so we are going to opt for an old ugly car that goes slow and is incredibly safe over a shiny, fast small sporty car. I’d like to see him live a long, healthy life and this car choice will help that along.

I use this theory for buying my cars:

Buy a high quality car that is 3-5 years old with 40,000–60,000 miles and coming off the first lease. I can pay pennies on the dollar based on the original price. I’ll drive it until it has 200-300k miles on it and leaseholders tend to take very good care of their cars. I’m getting a nearly new and high quality car at a low price. My current car is a luxury model that I bought for just under $10,000 2 or 3 years ago and has been a great purchase.

For my son:

If he wants a Mercedes or BMW, that’s great! But it’s not going to happen. Unless we find one that is 10+ years old, has 100k+ miles on it and can be had for a very low price. More likely, we will look for great deals on high quality cars with lots of mileage. He will be commuting a few miles to work or school and taking the occasional road trip.

I want him to have a 4 cylinder engine to be effective on gas mileage and not have much horsepower. And I want the car to have a great safety record from a car maker that has a reputation for safe cars. Looking at cars.com, I found 200+ cars for under $5,000 that my son, his mom and I can all pitch in and purchase together. Now his job is to pass his exam and come up with 1/3 of the cost of the car!

What do I hope you learn about from my son’s car? Don’t overspend on assets that depreciate in value!  Americans spend far too much on cars and other things that don’t increase in value. Set some rules about how much you’re willing to spend on things like this and stick to them.

My kids all laugh when they say they’re going to “invest” in a new computer or video game. They roll their eyes when I ask how much of a profit they’ll make if they sell their new “investment” 5 years later, knowing that they’re about to hear investing means trying to earn a profit. Spending is what we do when a purchase decreases in value. The moral of this long story is to minimize the cost of purchases so that you have room to invest for your future.

 

5 Songs That Could Ruin Your Finances

April 13, 2016

I love how music can pump you up, calm you down, soothe a broken heart, bring back old memories and generally set the tone in any situation. Ever notice yourself singing along while grocery shopping? That’s not on accident. Those songs are strategically selected to make you stay longer and buy more.

There are lots of great songs out there that have positive money messages (here are 5), but there are also plenty that send the wrong idea to listeners. At the risk of sounding like a boring fuddy duddy, I came up with some financial guidance to help solve these artists’ money blues. Try not to make these mistakes with your money:

Last Friday Night – Katy Perry: There are plenty of things mentioned in this song that moms everywhere wouldn’t approve of, but the part about maxing out your credit cards is what gets me. First of all, you don’t have to max out your cards to have fun and second, you definitely won’t be doing it all again next Friday without some serious financial discipline during the week to pay down the balance. Just in case, here’s our Debt Blaster calculator to help reign in that debt, Katy.

Time Of Our Lives – Pitbull: I actually understand what it’s like to take a look at your bank account balance and know that there’s not enough in there to cover upcoming bills. What I’m not a fan of is going out to “get up in this club” and blowing what money you do have when you know your rent is going to be late. If Pitbull just used the No-Tracking Budget to make sure he has enough set aside to cover bills, I bet he could pay his rent on time AND still have a good time.

Mo Money Mo Problems – Notorious BIG: I said this phrase to a friend in jest once, and he shot back with, “I bet the panhandler down the street would disagree.” That really made me think. It’s true that lottery winners and other people who strike it rich tend to have people coming out of the woodwork asking for money, and the whole idea is that we wouldn’t have these problems if we didn’t have money, but let’s not confuse that with thinking if you didn’t have money, you would have fewer problems. They’d just be different problems.

One of my favorite bits of wisdom to share is that if we all threw our problems in a big pile and could pick any ones we wanted, we’d all take our own back. Remember that the next time you get stressed about your finances (even if it IS a lack of having enough) and remember that it could always be worse. Shift your focus to what you DO have and you just might be surprised at how you begin to see more of those good things in your life.

If I Had A Million Dollars – Barenaked Ladies: So if you actually had a million dollars, you probably shouldn’t buy a llama or an emu. Here are some things you could do though: pay off debt, establish your emergency fund, max out your 401(k), or do something fun and then save the rest for the future. DON’T quit your job unless you’re pretty close to retiring already.

Just Got Paid – ‘N SYNC: One thing I could conclude about this is that Friday night is a bad night for your finances! Seriously though, I know plenty of people who celebrate “Paycheck Friday” with a “treat yo’self!” attitude and then spend the rest of the week complaining that they’re broke. It’s fine to cut loose and celebrate the weekend. Just make sure you’re putting something aside for the future, paying your bills and saving for budget-breaking expenses before blowing the rest on Friday night.

What about you? What are your favorite money songs? Share them with me on our Facebook page or email me and I’ll include them in a future post.

 

 

How to Transition From Military to Civilian Life

April 12, 2016

Do you know someone who’s in the military or a recent veteran? One of my colleagues, Teig, interviewed a couple of the financial planners at Financial Finesse who are veterans (including me) to get insight into how to successfully make a financial transition from military to civilian life. Although Teig’s interview focused on veterans, the concepts can be applied to anyone facing a life transition: 

I have had the good fortune to be surrounded by both active and former military personnel throughout my life, and I love the stories they tell about their careers. Every one of them gives me a unique perspective on the world. I recently sat down with two distinguished U.S. Military veterans who are also resident financial planners at Financial Finesse to discuss their success in both careers. I wanted to know what inside knowledge they could pass along to military vets and the rest of us about transitioning from one career to another.

When leaving the military, what financial planning did you do?

Tania: I did a lot. I was terrified. So many people reenlisted because they HAD to. I started planning 18 months ahead and paid off all debt and socked money away.

Mark: I was an officer and had the option of staying, but I made a decision to not do that. I don’t think I did any conscious financial planning. I had been disciplined and didn’t have debt when I separated. I was planning to get out and get married, so I had already been saving and dabbling in mutual funds before I left.

I wish I had looked into how benefits work.  My healthcare was always taken care of in the military.  I went into civilian life not knowing how benefits work.

What do you think you did well, or not so well, in your transition?

Tania: 18 months out, I researched where to live next because NY was expensive. I looked up best places to live and targeted the south. I wanted a diverse economy in a city, good military education benefits, and a low cost of living. I chose Charlotte, NC. We had a program to use to transition from military to civilian, which helped me to learn the civil language and update my resume.

Mark:  I started looking later but also realized that my missile programming skills weren’t as transferable as they could be. Before I left, I spent a lot of vacation time going on interviews. I knew I would be moving from North Dakota to Chicago. It’s more expensive so I had to redo my budget. I would not have kept a car if I had to do it again because I didn’t need it in Chicago.

If you were speaking to a soldier or officer today, what’s the one thing you would recommend they do now to make the transition to civilian life easier?

Mark: Leave the military debt-free. Double down on savings.

Tania: Give yourself a reality check. What you make in the military is NOT the same as what you make in civilian life. You’ll have extra living expenses, food, etc. Understand the cost of living where you are going. Definitely bring no debt.

Understand what you’re really worth as a civilian. ACAP is the program. Go into that as early as possible to demilitarize your verbiage.

Mark: Yeah.  THAT’s a big adjustment.

What advice would you give family members of transitioning personnel?

Tania:  Have patience. There is no guaranty leaving the military.

Mark: Help out with the budget. Get involved in the spending plan.

Tania: Healthcare is different. Understand what PPOs, HSAs, and HMOs are. There is no commissary.  There are so many additional costs.

Mark: Your service life insurance doesn’t go with you. You have to go buy life insurance on own. Do your homework. Shop. Find a broker.

Tania: We ran after people for everything as HR. It’s not the same in civilian life. If you’re not proactive, you get nothing.

What are good resources for the transition?

Mark:  Military.com has lots of info about transitioning to civilian life.

Tania:  I love military.com. They have transition stories and I actually wrote one for them.

Don’t Make My Moving Mistakes

April 08, 2016

After a long process (it started with my first offer in August) of looking for, making offers for and securing financing for a new place to live, I just finished moving. Whew, that was a process…While I’ve done it many times in my life, I always forget how tough it is and how many things come up and how they can be budget busters. I re-learned a few things and maybe you can learn from my mistakes and not commit similar ones.

Always expect things to cost more than estimated! When you pay for a home inspection,  your inspector will find issues that need to be fixed – either by the seller or by you as the new buyer. In my recent experience, the issues that I needed to fix always cost just a bit more than anticipated.

For instance, there was some very worn and stained carpeting on the stairs that I wanted to replace. I looked under one area during the inspection that was a bit easy to peek under and I saw a nice wooden step. My plan was to simply pull up the carpet, have nice wood steps and remember NOT to wear slippery socks when going up and down the stairs.

Well, when the carpeting was removed, there were only two or three steps (out of 10-12) that looked decent. The rest were marked, scarred, virtually non-existent (a simple plywood plank, not a finished wood step) and my “nice wood stairs” idea went up in smoke. I called a friend who is in the carpet business and had him come out to salvage the situation with a newly carpeted staircase. It ended well, but that was a check I hadn’t anticipated writing.

What you can learn from my mistake: On your next move, either do some research into the pricing of each product/service that you will need or add in a “fluff factor” of 10-20% for the unexpected. It’s a bit cliché to say “expect the unexpected”…but, expect it! And do a room by room walk through with a notepad and build a list of projects that need to be done so that you have as much information as you can get to make your ballpark costs as accurate as possible.

You will pay for things you didn’t think you’d need!  When I moved, I thought I did a pretty thorough job of listing everything that I needed to pay for. I had movers, boxes, packing supplies, home inspection, appraisal, etc.

But there were two things that completely escaped my list. I forgot all about “service change” costs with my gas/electric provider and my phone/cable/Internet service provider.  Because my new place had never been serviced by these providers before, there were some installation charges added to the service change fees. In all, there were a few hundred dollars that I had no idea I’d have to spend.

Plus, my move was in April – which last time I checked was in the spring – but in Baltimore, the spring can have some cold days (as evidenced by the snow flurries I saw this morning). I completely forgot that my oil tank would need to be filled and it took about 250 gallons to fill. That was another big unexpected charge. Adding in a few other things that I hadn’t added to my list (shower rod and shower curtain, bath mats, outdoor deck chairs) – there was over $1,000 that I didn’t expect to pay but ended up paying.

What you can learn from my mistake: When you are calling your service providers, do it well in advance and ask about waiving the change fees in exchange for you being a loyal long term customer.  Ask for discounts. Ask if there is any way to lower your bill so that after you move, you have an embedded savings. I was able to do that with Verizon Fios and added a couple movie channels for less than my prior package price.

Finally, walk through with someone who has complementary skill sets. I understand the structural and mechanical pieces so I would have been better served to walk through (with my notepad) with someone who has more of a decorative slant than I do! (I’ll never be considered to have fashion/style sense.)

Moving is expensive…and exhausting….and frustrating. My budget was a bit busted and I am going to have to cut back in some other areas (dining out, coffee shops) over the next year or so in order to recover from the damage that the move did to my finances. But after spending a few nights in my new place and adjusting to the new sounds, I have to say it was very much worth the headaches! It’s a small price to pay for all of the reasons I chose to move and take on the financial trauma that a move can do to my regular budget.

 

 

 

5 Songs That Are Good For Your Money

April 06, 2016

I love a good playlist. I have one for driving, one for doing cardio, one for cooking dinner, and even one for blogging. So to celebrate National Financial Capability Month, I’ve curated a short playlist of money songs that have a positive financial message for your listening pleasure.

Thrift Shop – Macklemore: Obviously you can save money by thrifting as long as it’s not an excuse to shop and spend money but instead to buy things you need for less than full-price retail. Otherwise, it’s no different than loading up the cart at TJ’s on things just because they’re bargains even if you don’t need them. This song tops the list because it’s also a good reminder that if you’re donating to thrift shops, make sure you’re making the most of the tax deduction.

No Scrubs – TLC: This is in line with Chapter 6 of our CEO’s new book What Your Financial Advisor Isn’t Telling You. How a person handles money is a key indicator of how they do life, so good money management is a sign of personal responsibility and accountability. Want someone who makes excuses and complains but never buckles down and does what it takes to improve? Then go for a scrub.

Billionaire – Travie McCoy featuring Bruno Mars: Don’t we all wanna be billionaires pretty frickin bad? But seriously, you don’t have to be a rock star who packs stadiums in order to have a comfortable lifestyle. First, make sure you’re not pre-spending like you already are a billionaire. Then run the numbers.

One recent calculation says that Millennials are going to need $1.8 million to retire comfortably. At Financial Finesse, we prefer to base the amount needed on replacing a percentage of your income, as our Retirement Estimator calculator does, so don’t let that $1.8 million paralyze you. If you’re 30, you’d need to save about $800 per month at an 8% average annualized return to get to $1.8 million at age 65. That’s doable, and hey, you’ll at least be a millionaire! That’s not so frickin bad.

B*tch Better Have My Money – Rihanna: The lesson here? Don’t lend money to family and friends. And if you need to borrow, people you actually like or are related to should be a last resort. But if you must go there, make sure you protect yourself and your important relationships by making it a formal agreement.

Nothin’ On You – B.o.B. featuring Bruno Mars: I just can’t resist the line about “plus you pay your taxes.” I’ll be honest. I hate paying taxes just as much as the next guy and I take full advantage of any tax rules that minimize what we have to pay. But taxes are part of our responsibility as citizens of this great country and we all have to pay them, so no excuses. Pay your taxes.

How about you? What are your favorite money songs that send the right kind of message? Shoot me an email at [email protected] or send me a tweet at @kclmoneycoach. And stay tuned for next week, when I’ll share the top 5 money songs that are bad for your finances. Any guesses what they’ll be?

Why Everyone Needs to Check Their Credit Report

April 05, 2016

I try to practice what I preach but I do not always succeed. I was recently talking to a group of people about the importance of checking their credit reports at least once a year to make sure that it is accurate.  After I was done talking to them, I started thinking about the last time I reviewed my credit report.

When I could not come up with a date, I realized that I needed to start checking the credit report for me and my husband. I went to Annual Credit Report.com website to get our credit reports from Transunion, Equifax and Experian for free. I thought it would be a short review and then I could pat myself on the back for doing what I encourage everyone to do. Unfortunately, that was not the case.

If you have read any of my blog posts, you probably think my family is on a first name basis with the emergency room. Between my husband’s health issues and my recent car accident, I can probably get to the emergency room blindfolded. An ambulance bill we were unaware of popped up on my husband’s credit report from over a year ago.

I called and it turned out it was an old unpaid bill that we never received. It was sent to the wrong address and it was never sent to our healthcare provider. We contacted my husband’s health insurance company, sent them the emails verifying we were unaware of the bill and surprisingly, they paid the bill.

After a few months, we noticed that the delinquency was still on his record. We first contacted the creditor to ask for the information to be removed. After all, they got the address wrong and the bill was paid by the healthcare provider. They basically told us that there was nothing they could do.

We then disputed the bill online, providing supporting documentation (it took about 5 minutes) with all three credit reporting agencies. Credit reporting agencies must investigate disputed items, typically within 30 days. After about 30 days, I received an email stating that the information will be removed from our report. After another 30 days, the information dropped from our credit report.

Do not assume just because you pay your bills on time that your credit report is fine. Once a year, use a  checklist like the one on the Nolo website as a guide to reviewing your credit report. Review each section of your credit report for the following:

Personal information section: Make sure your name, address, social security number, birth date and phone numbers are correct, especially if you have a name shared by other people (John Smith, etc).

Public records section: Check for incorrect information or information that should no longer be reported  such as bankruptcies over 10 years old, tax liens you paid more than seven years ago, and criminal arrest record more than 7 years old.

Credit account section: Check to make sure that the credit history reported is actually your credit history and not mixed with someone with a similar name. Ensure that all of the accounts listed status is current. For instance, an account that should be closed is still listed as opened. Also check for adverse information over 7 years old.

Inquiry section: Review this section to make sure that the credit inquiries were done with your permission.

If your find inaccurate information, first contact the creditor, if possible, to dispute the item. If that does not work, then dispute the items with each credit reporting agency.  The credit reporting agencies are required to investigate. Taking these steps will go a long way to preventing any unpleasant surprises on your credit report, especially during critical times like a house or auto purchase.

 

 

5 Areas That May Need Some Financial Spring Cleaning

March 31, 2016

With Easter weekend behind us and spring officially in the air, it’s time for some spring cleaning. Don’t forget about cleaning your financial life too. While it’s much easier to see the clutter in your home, the clutter in your finances could have much bigger consequences. Here are several areas that may need some cleaning up:

Your expenses. If you’ve never taken a look at what you spend money on, it can be a real eye-opener. Start by gathering at least 3 months’ of bank and credit card statements and record each expense. You can also use a tool like Mint or Yodlee MoneyCenter to track your spending online for free.

Then go through your expenses and see what areas of waste you can cut. Are there things you’re spending money on that you don’t really need? If you do need it, can you get it in a way that costs less? You can get some ideas for savings here.

Your credit report. It’s been estimated that about 70% of credit reports have errors that could be hurting your score. If you haven’t done so in the last 12 months, you can order a free copy of each of your 3 credit reports (TransUnion, Equifax, and Experian) at the official site: annualcreditreport.com and report any discrepancies. You can also improve your score by getting current on your bills and paying down debt. Just be aware that old debt falls off your credit report after 7 years and making a partial payment or even acknowledging the debt to the creditor can restart that clock so if it’s getting close and you’re past your state’s statute of limitations for being sued by a creditor, you may just want to wait it out.

Your retirement account. Do you have retirement accounts that you left at previous jobs? If so, your overall retirement portfolio may not be properly diversified or you may be paying more than you need to in fees. Unless you have employer stock or are taking advantage of some unique investment option in the plan, you might want to roll those accounts to your current employer’s plan or into an IRA to make them easier to manage.

Your savings and investment portfolio. Many people have accounts they’ve opened or investments they’ve bought for different reasons over the years and now their savings and investments are a cluttered mess. Having 10 different bank accounts or 5 US stock funds isn’t diversification. Here are some simple ways to make sure you’re properly diversified.

Your legal documents. Tax documents only need to be kept for 7 years at the most. After that, you might as well just shred them. Estate planning documents should be checked to make sure they’re still up-to-date. Once your spouse finds out that your ex is still listed as your beneficiary or your youngest child wasn’t included, it may be too late.

How about you? Have you spring cleaned any of your finances? If so, share your experiences in the comments section below.

 

Why You Need Emergency Cash Reserves

March 18, 2016

Recently, Financial Finesse was fortunate enough to hire Steve White – a bright and handsome gentleman from Texas. If you doubt the handsome part, just ask him…he’ll tell you! Steve shared his view with me of why an emergency fund is critical for your life, and it sounded like something I should share with you. Continue reading “Why You Need Emergency Cash Reserves”

Who Consumers Really Need to Protect Themselves From

March 10, 2016

This week is National Consumer Protection Week so you might have been hearing a lot about how to protect yourself from fraud, scams, identity theft, etc. This is important information but the reality is that the biggest threat to us as consumers is staring at us in the mirror. Here are some ways we sabotage ourselves and what we can do to protect ourselves: Continue reading “Who Consumers Really Need to Protect Themselves From”

5 Questions to Ask Your Credit Card Company

March 08, 2016

National Consumer Protection Week, from March 6 to March 12, involves numerous organizations focused on helping to empower consumers to make informed decisions about financial products and services. Nowhere do I see a greater need for this than with credit cards. In my role as a resident financial planner, I have spoken to too many people who did not fully understand their credit card. The lack of understanding cost one employee hundreds of dollars in fees. If you are either shopping for a credit card or unsure of how your credit card works, consider asking these 5 questions: Continue reading “5 Questions to Ask Your Credit Card Company”

Living Paycheck to Paycheck? Here Are 4 Places to Find Money

March 02, 2016

One of the things I love the most about living in a big city is that we are the first ones to have access to innovative products and services like Uber, Instacart and Flywheel. Whenever I start to daydream about moving back to the quiet of a small town like the one I grew up in, I have to remind myself that I’d be giving up things like the option of having my groceries delivered from Trader Joe’s or the variety of workout options I can choose from each week. (I currently teach BODYPUMPTM and have credits at Zen Yoga Garage and Flywheel.) If I want to live where you can hear the grass grow and the need to carry Mace is laughable, I won’t be able to be so picky about where and how I get my sweat on. Continue reading “Living Paycheck to Paycheck? Here Are 4 Places to Find Money”

Why You Need a Plan B

February 26, 2016

I woke up one morning recently and scrolled through my emails on my phone before getting out of bed. I was shocked to see that one of my coworkers was involved in a hit and run accident. A car came barreling through an intersection, hit her car and drove away. She was injured in the accident and was, a day later, more upset that her workout routine was disrupted than being in a pretty major accident. Continue reading “Why You Need a Plan B”

5 Ways to Make the Most of Eating Out

February 25, 2016

Over the last few weeks, I’ve written about ways to save money on “fixed” expenses as well as discretionary expenses like travel. Another big discretionary expense for many people (me included) is dining out. Yes, we can prepare food at home more often (which is also healthier) but what about for those times that we want to eat out? Here are some ways to reduce the cost and make the most of the money you do spend: Continue reading “5 Ways to Make the Most of Eating Out”

Are Your Purchases Like Super Bowl Ads?

February 19, 2016

Less than a week ago, I had friends over to watch the Super Bowl. We had a bit too much food, drank a few adult beverages and watched a game filled with excellent defensive play. It was a pretty good game. Continue reading “Are Your Purchases Like Super Bowl Ads?”