Does Your Aging Parent Need Help?

December 06, 2016

My father had a presence about him that made him seem larger than life. As my father started aging, we still saw him as invincible and initially ignored the signs that he could no longer take care of himself. As we celebrate this holiday season, take the time to observe your parents as well as any other elderly relatives to see if they may need help. My sister-in-law was the first to notice the changes in my dad so be sure to involve your spouse in the observation too. Look for the following warning signs:

1. Home in Disrepair – As you pull up to your elderly relative’s driveway, look for signs of disrepair. Does the exterior of the home need painting, is the driveway cracked, are newspapers piling up. (It may be a sign that she cannot move around as much).

As you enter the home, look to see if the home is more cluttered or disorganized than normal. Is there an odor? Is there a lack of food (he could have problems paying for food or he may not be able to travel to buy food) or does he have a lot of expired food? If you find there is a problem, consider talking to your relative. It may be as simple as helping them once a week or month or hiring a caregiver or it may be time to look for an assisted living facility.

2. Deteriorating Physical Health – Has the personal hygiene of your relative changed? Has she experienced unusual weight loss? Does he have unexplained bruising? (My father had bruises due to falling, but did not want to tell us.) Is she more tired than normal?

Does he have more bottles of medication than you remember? Is she actually taking her medication. (You can look at the date the medication was given and check the bottle. If it’s full after several weeks, she may not be taking her medication. If it’s empty after a month, she may not be able to travel to get  her prescription filled.)

Is he struggling to move around his home? First step would be to talk to your relative about his health. If possible, go to a doctor to understand any health challenges and if there is a need for a caregiver.

3. Cognitive Impairment. If you can, check his mail for late notices, bounced checks and collection notices. (This could be due to a lack funds as well.) These could be signs of forgetfulness. Does she seem to be confused or uncertain about doing tasks that were once familiar – cooking a favorite meal, playing a familiar musical instrument, recounting a favorite story she has told for years and/or forgetting a favorite song? Do you notice a change in his mood – more closed, angry, depressed or unusual mood swings?

If you have concerns about cognitive impairment, talk to your parent and if possible, talk to his physicians about getting your parent or elderly relative evaluated.

As I write this, I know firsthand that not all parents are cooperative. If your parent is resistant to talking about your concerns, be patient. Websites like AARP offer a wealth of resources on care giving. An aging life care professional  (sometimes known as a geriatric care manager) is a specialist trained to help with the care of the elderly. Ask questions to get to the root of why they are resistant.

Ultimately, it was a team effort that convinced my father to go to an assisted living facility where he is doing great. We got a lot of people involved, including clergy and a social worker, to talk to our father. The key is to respect how your parents feel, lovingly but persistently keep talking, involve as many people as you need, and take it slow. Consider using the holiday season not only as a time to spend with your loved ones but also to uncover a need for help. This could be the greatest gift you give your family member.

 

 

What To Teach Your Child About Money Over Winter Break

November 29, 2016

Experience is often the best teacher. My mother told me this often and like most kids, I ignored her. I thought I knew everything when I was a teenager despite my lack of a high school diploma, never having had a job or paid a bill, and being on the earth for less than 18 years.

When I went to college, she gave me an amount of money to spend monthly. I, like most kids, did a horrific job managing my money and I found myself broke within days of getting my monthly allowance. My mother refused to give me extra money. Needless to say, it was a humbling experience.

During my first major break in college, my mother pulled me aside and showed me how to budget. For those of you with kids in college who are floundering with their money, take the time to help them learn how to budget. Trust me. They will be much more receptive after they have tried and failed. The following steps can help your child manage their money better – and create less of a headache for you.

1. Work with your child to create a budget.

At the time I went to school, the Internet did not exist, so my mother helped me create a budget on paper. My budget consisted of eating out, clothes, and entertainment. To her credit, my mother did not roll her eyes over my eating out expenses but guided me into limiting my spending so my money could last. Today, your child can use websites like Mint to manage their money. Help them think through how much they should spend weekly, so they have money for the month.

2. Establish rules for overspending.

This one was easy. My mother said, “Don’t ask me for more money.” She made it clear that if I could not manage my money, she was not going to be “Bank of Mom.” Knowing that there was a limit to my spending scared me into thinking more about how I spent it. Go over the rules for overspending so you and your child are on the same page.

3. Consider a part-time job.

I complained to my mother that the money I was given was not enough. She went over the amount and then how I spent it, which I blew on pizza, clothes and movies. She then told me that her job was not to manage my social life and if I want one, I should get a job to cover the expenses. Immediately, my complaining subsided.

If your child is struggling to manage the money they have, go over their funds with them to assess if the struggle is a result of poor money management or truly a lack of funds. Depending on your child, encourage them to work a part-time job. Surprisingly, when I eventually got a job, my grades went up. The job was a wake up call as to what my life could be like without an education.

While your child is home for the holidays, take the time to review their spending. Helping your child create good money habits now will go a long way to creating a financially successful adult. They’ll thank you someday.

 

 

The Best Gifts Don’t Have to Cost a Fortune

November 22, 2016

One of my favorite Christmas gifts was the first one my daughter made for me. To be honest, I am still not 100% certain what it was. It looked like it wanted to be a mug when it grew up but somehow morphed into a mug with a small bowl slated on one side with bumps. My daughter was so proud of her accomplishment and had the expectant look of, “Of course, you know what this is and how to use it,” so I did not have the heart to ask and this interesting interpretation of what a mug is has sat in a box for years.

As I think about the gift, I realize that the best gifts for many people can cost little to nothing. As you start to think of what to get people for Christmas, do not undervalue the gifts that cost little. Here are a few ideas:

1. Certificates for free babysitting, home repairs, etc:  Those of us that have kids know the value of a date night and the expense of hiring a babysitter. Getting a gift of free babysitting is a wonderful way to give couples a night off or to give a single mom a much deserved break. Are you handy, sew or have a valuable skill or talent? Consider donating your skills as a gift. It will be much appreciated.

2. Family pictures in an inexpensive frame: When you have kids, this is a gold mine. You can find some great frames at dollar or thrift stores or you can get creative and inexpensively create a picture frame. This makes a great family activity.

3. Baked goods: If you are a hidden “Betty Crocker,” consider whipping up your favorite yummy desserts and creatively package the delicious gifts.

4. Toy swap: If you have kids, we all know there are piles of toys in practically new condition sitting in the corner or under the bed. A friend of mine came up with the great idea of packaging the toys and swapping them as gifts for Christmas. It was an inexpensive way for us to give gifts to each other and we got rid of things our kids were not going to use anyway.

The gifts listed above are no to low cost and would be greatly appreciated. These are only a few items though so use your imagination to come up with more ideas. Remember, some of the most priceless gifts cost nothing.

 

Rebooting Your Career After a “Gray Divorce”

November 15, 2016

I was recently at a conference talking to a group of women. The conversation was about everything from movies and books to kids and then it turned to marriage. What surprised me about the conversation was not how many women were divorced (we all know that the divorce rate is high in our country) but the age of the women who were recently divorced or facing a divorce. Almost every woman at my table of 20 who was recently divorced or about to be divorced was about 50.

Many were either stay-at-home wives or worked part-time jobs making little money. The reality of being divorced meant they now had to look for work that was not only satisfying but could meet their expenses, and in some cases, help them save for retirement. As these women found themselves job hunting after being out of the job market for decades, I offered the following suggestions on what to look for before accepting an offer:

1) A generous 401(k) match and/or a pension program: Get as much help as your employer can give you to save for retirement, especially if you feel you are behind in savings. Although most pension programs are going the way of the dodo bird, there are still organizations like the federal and state governments  that pay a pension. The other is to look for companies with generous 401(k) matching programs. Consider using this article as a starting point to research potentially generous 401(k) plans and verify the information using Glassdoor, Vault or any other website that has employer information and/or employee comments about the company.

2) An extensive benefits package that you can take with you when you retire: Benefits like long term care, life and health insurance while you are working and after you retire (if offered) can be extremely valuable. In most cases (not all), long term care insurance is particularly cheaper when bought through an employer as opposed to an insurance salesperson. In some cases, you can even get it with a less extensive underwriting process.

3) A generous vacation schedule: Most people do not think about it, but you want time to recharge and see the world without having to fight your employer. Look for employers with generous vacation/time off schedules. As they say, time is money.

4) Good opportunities in your career: A company may have the best employment opportunity, but if it is not in the field you are in, you may not experience the full benefits. Consider the potential career opportunities in your field from your potential employer. Explore the job training and tuition reimbursement programs and how committed the company is to helping you develop professionally. Also consider that it may be better to temporarily take a lower paying job if it advances you in the long run.

There are lots of websites to help you on your search. Look at articles such as Forbes‘ “The Best Places to Work in 2016”  or similar articles in your local newspaper. Employees are not shy talking about their companies, both good and bad. Go on websites like Glassdoor,  Vault and Monster  to get insider info about the company. You can even ask questions as many people are happy to reply.

Lastly, do not discount the power of personal connections. Talk to your friends and family about your job search and try to get insight about potential employers. The work you put in at the front end will go a long way to finding a satisfying career.

 

 

 

How to Financially Survive the Holiday Season

November 08, 2016

I love the fall – the changing colors of the leaves and the beginning of the holiday season. For many, this gives us time to spend with family, but for a lot of us, the holidays create a black hole in our wallets. I am sure that it comes as no surprise that Thanksgiving and Christmas are two of the most expensive holidays of the year, but with some planning, these holidays do not have to wipe out your accounts:

1. Review your spending to determine a realistic budget. Before you get caught up in the non-stop “Black Friday” sales that seems to start right after Halloween season, take some time and realistically assess your budget to come up with a total dollar amount you can spend on family gifts. Consider using your bank’s software or websites like, Mint to help you create a budget.

2. Come up with a game plan for who will and who will not get gifts. I have a HUGE family: 5 brothers and sisters and close to 20 aunts and uncles between both my parents. (Don’t get me started on first cousins, much less second and even third cousins.)

I limit gifts to immediate family members, and I give either a family photo or a photo of the kids in an inexpensive frame for family gifts. Decide who will get gifts and come up with a game plan for other family members. Remember, gifts can be more than something you purchase- yummy desserts or an offer to babysit or do another needed service for a family member are great gifts.

3. Start shopping now for great gifts in inexpensive stores. The best time to hunt for gifts in inexpensive stores is now. Also, start searching consignment shops, particularly for kid’s gifts. A few years ago, we got an expensive all wooden dollhouse filled with wooden furniture and dolls for under $25 at a local consignment shop. Start slowly going to local stores to find some great deals.

The holidays can be financially stressful. However, they do not have to be if you take the time to plan ahead. Start planning now so you can save later.

 

 

 

How to Evaluate and Review Automobiles

November 01, 2016

My husband is a car lover and enjoys the process of looking for cars, whereas I would rather go to the dentist for a root canal.  As we were sharing our differences with a friend of ours, she said that the biggest question she has is just how to get started.  Below is how my husband answered her question:

No matter which category you fall into, one things become very apparent. It takes time and energy. To make the best decision, first consider how you will use the car to narrow down your options.  For instance:

How much driving will you do? The longer your drives, the more gas mileage and wear and tear becomes important. So you may start evaluating cars for gas mileage and the overall cost for wear and tear. Consider using websites like Long-Term Quality Index  and Consumer Reports to evaluate the reliability of the vehicle. These reviews can also help you avoid the most troubling models to increase your likelihood of having a reliable vehicle.

What are your capacity needs? Is it just yourself driving or a bunch of kids? Will you be hauling major items or just groceries? Consider reviewing websites like Edmunds and Car and Driver to get a road test evaluation as to how the vehicle fits into your lifestyle needs

Once you have determined this, evaluate your budget to figure out how much you can either afford to pay with cash or how much of a monthly payment you can make. The general rule of thumb for car payments is the 20/4/10 rule, which is to put 20% down, to have repayments terms of 4 years or less and for the cost of the vehicle (payments, maintenance, insurance, and gas) to be 10% of your monthly gross income or less. Websites like Kelley Blue Book give you an estimate of what cars you can afford in your budget and they can even estimate car payments.

If you are me, the thought of doing is like nails scratching a chalkboard. Trust me though. In the end, you will thank yourself for doing the upfront work now to get a reliable vehicle that you can use for years to come.

 

How to Reduce Your Auto Insurance Costs

October 25, 2016

You can only imagine all of the crazy scenarios that go on in your brain when you have had two car accidents in under six months. Unfortunately, these scenarios led me to getting practically every auto insurance option available when we bought our cars. Needless to say, I think I went a little overboard, which of course I figured out when I saw my first auto insurance premium bill. If you find that your auto insurance is higher than you would like, consider pairing down by doing the following:

Shop around: Do not assume that the policy you have is the best you can get. First, contact your current insurance company and ask for discounts for things like: multiple vehicles and good driving records to name a few. Consider getting all of your policies (home, renters, cars) from the same insurer to help reduce costs. Next, review  websites to help you evaluate various auto insurance companies and consider using sites like Esurance,  NerdWallet or  The Zebra to help you price auto coverage.

Deductibles:  In general, the easiest way to reduce your premiums is to increase your deductible. Typically, the more you have to pay out-of-pocket, the cheaper the policy. A rule of thumb is to choose a deductible amount you can easily pay if needed or allocate a portion of your savings to cover the deductible you choose.

Dump unnecessary coverage: Collision insurance covers physical damage to your car if you collide with an object (car or tree) and comprehensive insurance covers other damages like a flood, theft and fire. A rule of thumb is to consider dropping full coverage when the annual cost for the insurance is more than 10% of the actual cash value of your car. If you decide to drop coverage, consider creating a “car budget” to cover the cost of repairs and a newer vehicle.

Ultimately, I ended up increasing my deductible to an amount that I can afford to pay out-of-pocket and I dropped comprehensive coverage on one of the older vehicles we purchased, which lowered my overall premium. Consider annually scheduling a time to review all of your insurance policies. You can use your birthday or you can use your open enrollment period as a time to not only review your benefits at work but to review your auto insurance policies as well. Taking a few hours to review your policy can help you save money that can go towards other goals like paying off debt, building an emergency savings and saving for college.

 

Are You Having Trouble Sticking to Your Budget?

October 18, 2016

I love what I do for a living, but there are definitely some drawbacks. My friends and family will come to me with financial questions but will run from me like I have the plague if they are not following my advice. In fact, a family’s or friend’s communication with me after I give advice is my best indication if they are actually following my guidance. I find the more voice mails I leave, the more likely they are not following my guidance. Such was the case with one of my young cousins.

Samantha is a recent college graduate in her early twenties that recently landed her first job. Immediately, the “I wanna have” disease took over and she quickly found herself barely able to make it from paycheck to paycheck. We sat down and worked on a spending plan based on her lifestyle. As a Starbucks fanatic, I am the last person to deny someone a pumpkin spice latte, but I encourage people to create a budget so you are not “latteing” yourself out of paying off debt, building an emergency fund or saving for retirement. She took my advice…or so I thought.

After not hearing from her for months, which is unusual, I finally got her on the phone and she admitted that she had been avoiding me because she was not following the budget. Once I told her that it was okay, that a failed budget only means re-strategizing, we looked at ways to help her stick to her spending plan. If you are having trouble sticking to a budget, consider doing the following:

1. Consider increasing some of the areas where you continuously overspend. Samantha struggled with eating out. She is young, single and in a new city. Her income allowed for some eating out so she decided to eat out 5 days a week, bring her lunch into work and eat at home twice a week.

She reduced her grocery budget and increased her eating out budget. Since part of the reason for her eating out was loneliness, I suggested having a potluck or pizza/home movie night with friends on one of the days when she eats at home to share the cost and for her to have company. Consider increasing your budget in areas where you constantly overspend. Remember, you have to make up for the overspending by decreasing spending in another area though.

2. Consider using cash for areas where you overspend. If you have areas where the problem is simply a lack of discipline as opposed to a need to increase spending, consider using cash. Some of the popular areas where people overspend are: groceries, clothing (this includes kids), eating out, entertainment, and gifts. If you overspend in any of these areas, consider using cash.

3. Find the method of tracking spending that works best for you. Samantha was tracking her spending with a great budgeting tool that she thought was too much work. She switched to her online banking budgeting tools, which streamlined the budgeting process for her. Her bank offered a robust app so she can stay connected to her budget online.

Consider how you want to access your info. If it is through your smartphone, consider online apps. If you want to not only budget but review investments and tackle debt, review online tools that can help you. If you are not sure where to start, consider doing what Samantha did and start with your bank’s online programs.

Remember to be patient when you start a new budget. There is almost always a need to make adjustments during the first three months. Hang in there and you will be a budgeting guru in no time!

What To Do Before You Say “I Do” Again

October 11, 2016

As I anticipate all of the upcoming marriages, I think about two of my friends who are getting married for the second time. Second marriages make up 1/3 of weddings. One of my recently engaged friends getting married for the second time told me the first time she went into her marriage blinded by love. This time, the blinders are off and she wants to walk into her second marriage with her eyes wide open. I told her that this means having a tough, but loving financial conversation with her fiancée.

One caveat my husband asked me to include is this: I live in the south where the men eat and sleep college football so please respect the football or whatever your fiancé’s favorite sport season is and have the meeting at a time when he or she will not get distracted by scores. When you find the best time for a meeting consider reviewing the following:

1. Consider pulling up each other’s credit reports using websites like Annual Credit Report.com so you know what you are financially marrying. Ask about his or her plan to repay debt and their thoughts about the debt. Do they consider the debt to be a shared responsibility or just yours to take care of separately once you marry?

2. Review each other’s spending plan or at least your ideas on how you will spend money once you get married. If you are coming into the marriage with children, what financial obligations or promises do they have towards your child that will affect the household income now and in the future? Will you keep everything separate, together or have one joint account and two separate spending accounts? Discuss current and future financial obligations and a plan for how these obligations will be met.

3. If you have assets you are bringing into the marriage, consider a prenuptial agreement that can state how the assets will be divided in case of a divorce. As optimists, we want to believe our second marriages will last forever, but the fact remains that the divorce rate for second marriages is higher. Your EAP or prepaid legal plan may provide legal benefits to help you create your documents.

As you think of remarriage, remember that you are bringing a lot into the second marriage. Assets, kids, a credit history and money management habits can make or break your future marriage if they’re not discussed. Taking a few hours to talk about your finances with your future spouse can go a long way to building a strong foundation for your marriage.

Where to Buy a Car

October 04, 2016

If you have been following any of my posts, you probably know that my husband and I found ourselves unexpectedly on the market for two cars, following two car accidents. (I will confess I was not exactly heartbroken that my husband’s 1997 Honda Accord with 312,000 miles was totaled.) As we started researching cars, we explored the possibility of using either a dealer or a private seller for the car sales. We went with an online dealer for my vehicle because that is where we found the vehicle I wanted and went with a private seller for my husband because the seller had the best asking price. Ultimately, we had good experiences with both, so if you are in the market for a new car, consider the pros and cons of both options so you can make the most well informed decision:

Dealer Pros:

  • Some dealers offer warranties on the vehicles, which may protect you if something unexpectedly goes wrong. If you are a worrier, this extra protection may be enough for you to choose a dealer.
  • Generally, you may have more legal protection working with a dealer. If you have a problem, you have the business as opposed to an individual to formally complain to. In some instances, dealers have more stringent lemon law requirements than a private seller.
  • In many cases, the vehicles have already been inspected and repaired, if needed. With a private sale, you are typically on the hook for repairs.

Dealer Cons:

  • On average, the cost of a vehicle is higher at a dealer. There is also less room for negotiations.
  • On top of the higher cost of the vehicle, there are typically extra fees you would need to pay. I about fell over when one dealer wanted to charge a $700 fee for processing a few pieces of paper that took me 20 minutes to do.
  • Some find car salesmen overbearing. I don’t think I have to explain this one. It’s pretty much a cliche.

Private Sale Pros:

  • If it is a one owner only vehicle, you may be able to find out the entire history and maintenance of the vehicle beyond what Carfax or Autocheck may have documented.  We were pleasantly surprised by how many people kept all of their maintenance records. If you like personally knowing the history of your vehicle, private sellers can make the sales process easier.
  • Oftentimes the vehicle costs less since many sellers use websites like Kelly Blue Book to price the vehicle. In most cases, there are also no additional dealer fees. If you have a limited budget, this may be an ideal situation. Keep in mind, you still may have other fees to pay like taxes, registering the vehicle, title change and tags. Check with your local government office for more information.
  • There are usually no pushy sales people. I found that in many cases, a private seller wants to get rid of their vehicle and hopes to make some money whereas a dealer’s sole focus is a profit. Personally, I found many of them hated the sales process as much as I did.

Private Sales Cons:

  • If you get a lemon, it is a lot harder to fight when you bought from a private seller than a dealership. Private sellers generally aren’t bound by the same lemon laws as dealerships. You are on the hook for repairs.
  • In many cases, you won’t be able to leverage your trade-in. Most private sellers want cash not a car. If you have a trade-in, then your best bet may be a dealer.
  • You have to do the legwork – transfer the title, register the vehicle, pay the taxes and get the emissions. This paperwork is not hard, but if you don’t want the hassle, a dealer can do most if not all of it for you .

I will be honest. Doing a private sale was a lot of work between searching for vehicles, checking to see if it was still for sale, getting the Carfax reports, and coordinating not only our time but the seller’s time. But if you can handle the work, you can find amazing deals online. If you like the comfort of knowing that if sometime goes wrong, you have a company to turn to or  if you have a trade-in, then a dealership may be a consideration. Ultimately, you have to take the time to explore both options to help you make the best car buying choice for you.

Lessons in Home Buying

September 20, 2016

I was recently at an overdue dental appointment talking to the dental hygienist, Jana. I try to talk about anything that distracts me from the drilling and moans of pain I hear in the other booths. She started telling me about her new home purchase and how she used lessons learned from her last property to make a better decision – like giving her kids free reign to run around the house. I will admit that I have never heard of this as a house hunting strategy, so I asked for more info and below is what I learned from our conversation:

Test drive a new house. She said the mistake she made with her first home was that she did not think to check on how soundproof the home was, especially with four kids. When she was looking for a new home, she brought all of her kids with her and unleashed them in the prospective homes to test the sound quality of the different rooms. If you value peace and quiet with kids, have your kids go upstairs and be loud (they will love this), walk through the rooms, and close the doors to gauge the sound quality of the rooms

Neighbors are your best friends. Jana mentioned that after she bought her home, she talked to the neighbors and learned most of them were moving out within the next few years because the neighborhood was recently redistricted into a not-so-great school system. This time she walked around  prospective neighborhoods and struck conversations with neighbors who were not shy about telling her about the good, the bad and the ugly of the community. This saved her from potentially buying a home in an area that she learned was having major traffic issues during rush hour traffic – enough that some of the neighbors had formally complained.

Don’t just relay on what a real estate agent tells you. Visit a neighborhood you are thinking of living in during different hours to get an idea of the traffic flow and talk to neighbors. Many are not shy about giving you their opinion.

You get what you pay for. For the first home she bought, she went with the home inspector that was the cheapest. She was not present during the inspection and ultimately paid the price with plumbing, appliance and roofing issues. This time, she interviewed home inspectors and paid an additional fee for a more thorough inspection. She also stayed for the entire inspection, asked questions along the way and was able to get a rough idea of whether the repairs were small or large.

She said the lessons she learned saved her from making another home buying mistake and helped her get into the home of her dreams. Take the time, like Jana did, to take the extra steps to make sure you are choosing the right home for you. It will go a long way into making your home buying experience a good one.

 

 

Helping Aging Parents Decide Where to Live

September 13, 2016

As a Generation Xer, it’s amazing how the conversations I have with my friends have changed over the years. At first, the conversations were about who was dating who and the latest episode of The X-Files (the original one). Then it was all about the baby pictures, which quickly turned into prayer vigils as to how we are going to survive the teen years.

Over the last few years, the conversations have been about our aging parents and how we can help them make life decisions, such as where they will live once they retire. If your parents are healthy and can perform activities of daily living, then an independent living facility like a senior apartment/condo may work. These types of homes can be subsidized for those with low income or private pay only.

If your parents have health issues that requires monitoring and struggle with some of the activities of daily living but do not need 24 hour nursing care, then an assisted living facility may be an option. Since there is no uniform standard for assisted living facilities, call and ask about what services are offered and the living arrangements. Another option is for your parents to stay at their home and hire a caregiver for basic non-medical care. If your parents have a condition that is progressive such as Alzheimer’s or that requires extensive nursing care, then a nursing home may be a consideration. Consider using checklists like the one from the Alzheimer’s Association to go over questions to ask.

As you start to evaluate which one is the best option for your parents consider the following:

1. How much can they afford? Assess all their income resources. Some senior facilities are private pay only, and some are income based. If your parent’s finances are limited, consider contacting your local Department of Aging Ombudsman Program for guidance. Review your parent’s benefits and insurance documents to see if they have long term care insurance, and contact the insurance company regarding the requirements to activate the policy.

2. What level of care will your parents need now and possibly in the future? Some active adult community facilities only provide limited heath care while others are connected to an assisted living facility that offers more comprehensive care so if needed, your parents can seamlessly transition. Organizations like A Place for Mom,  Adult Living Solutions, Seniors Resource Guide and possibly your local senior center can provide information on helping you make the most informed decision.

3. What level of independence do your parents want? This may require a reality check. Talk to your parents to make sure that the facility they want and the expected level of care matches. Once you have agreed, use the resources above to find the best option that matches your parents needs and wants.

Elder care can be stressful. There’s a lot you can do though. Taking the time to help your parents make the best decision will go a long way into making the transition as smooth as possible.

 

What I Wish I Had Known When I First Started Working

September 06, 2016

I don’t know about all of you, but the older, I get the faster time seems to go by. I feel like yesterday I was babysitting my kid’s friends and today I am watching them graduate from college. After one of my friend’s kids graduated from college, I went to a party celebrating the achievement. While at the party, I was listening to a conversation with my friend’s daughter and her friends, most of whom are also recent college graduates.  Luckily for them, we are in a better job market and almost all of them are either employed or getting ready to start new jobs.

As I listened to their conversation, I started to feel a sense of dread at the direction their conversation was going in. Their discussion was focused on getting paid the most money, moving to a “hot” new city (whatever that means) and what car they are going to buy themselves. I told them that the decisions you make your first working year will lay the foundation of their future financial success or demise – their choice. At that point, I had their undivided attention and I started talking to them about some of the things I wished I would had known when I first started working.

The best job is more than the highest salary. When I looked for my first job, the only thing I considered was the salary. I never stopped and considered that a lower salary that pays more benefits could net me a higher total compensation than a higher salary with crappy healthcare benefits. As you consider your next job, think carefully about the offer. How much will your new employer cover for healthcare benefits?

I also never considered my ability to grow my career. A higher future salary could easily outweigh a lower starting one. Consider how many opportunities you may have to progress in your future organization.

Your location will determine how far your money will go. One of the young women I spoke to was currently working in Georgia and thinking about a lateral career move to New York City. Being from Brooklyn, I told her she has to consider the difference in income and encouraged her to do a paycheck calculator to see what her net pay may look like with a move.  She was shocked at how much her net pay decreased.

Next ,I encouraged her to use a cost of living calculator to compare how far your income will go in one state or city vs. another. She needed almost a $30,000 increase in salary to maintain the same lifestyle she had in a small town in Georgia in New York City. If you are deciding on a move, consider doing a paycheck calculator and a cost of living calculator so you won’t go into sticker shock when you move.

The lower you keep your lifestyle now, the better quality of your lifestyle in the future. Remember that where you live now may not be where you will live in a few years so keep your home expenses to about 25%-30% of your net income so you have money left over for other goals and possibly a move. I pretty much went stupid when I got my first professional job. I convinced myself that I had to look the part and spent thousands on a wardrobe. You can look professional without going broke by shopping for high quality professional clothes at consignment shops.

Fortunately, I kept my old car though. This was probably one of the best decisions I made. I was easily able to make the move for a great career opportunity because I kept my expenses so low. If you end up getting a loan, consider following the 20/4/10 rule – put a 20% down payment, finance for no more than 4 years, and make sure the total monthly vehicle expenses (principal, interest and insurance) are no more than 10% of your gross monthly income.

Understand that good money management equals financial success. I wish I would have prioritized my finances better. I would have created a monthly spending plan that outlines ALL of my spending (including car maintenance, vacations, and gifts), saved 3-6 months of expenses, contributed at least enough to get my 401(k) match and attacked debt sooner. Use calculators like the Debt Blaster to come up with a game plan.

If you’re just starting your career, you have a tremendous opportunity to shape your financial future. Taking these steps before making a financial decision can go a long way to building a lifetime of financial success. You can do it!

 

 

 

Lessons in Car Shopping

August 30, 2016

If you have read any of my posts, you probably know that my family has a “hit me” sign on us every time we get into a car. We have been in two car accidents within four months of each other, and I am honestly not sure what was worse: the accidents or dealing with the insurance companies. After the dust settled, we found ourselves needing two cars. Luckily, we had adjusted to having one car and decided to get only one newer vehicle immediately. This began our car shopping odyssey.

The first thing we did was to contact the car insurance company we filed a claim with to ask for an extension. Surprisingly, they were willing to extend their coverage a few extra days and then they allowed us to use their much lower daily rental rate for an additional two weeks. If you are in a similar situation, contact the insurance representative assigned to you and plead your case. Having a few extra days or even weeks takes the pressure off of having to buy a car immediately.

Next, we decided on our budget and researched websites like  Kelley Blue Book and Edmunds to gauge what type of vehicle we can get with the features we wanted within our car budget.  Next, we reviewed the reliability rating using websites like Consumer Reports. Once we did the research, we were able to narrow down our selection to two types of vehicles. Before heading to the dealer, come up with a budget and research vehicles that fall into your budget so you have a realistic idea of what you can afford to get.

I am sure that there are wonderful car dealerships, but after dealing with high pressure sales tactics, we realized we do not have the time or patience for traditional dealerships so we decided to buy a car through an online dealer. After researching several online dealers, we found that in our case, the fees were cheaper, many had a money back guarantee, you can shop nationally (confirm any fees to transport the vehicle to you) and there was less haggling. We researched consumer complaints using websites like the Better Business Bureau and Yelp.  No matter how great the online dealer may sound, do your due diligence by researching the company online for complaints.

After choosing our dealer, we were assigned a salesperson who did a great job asking us about our needs and wants and sending us vehicles that were within our budget. Within a few days, we selected the vehicle we wanted and after it was inspected and detailed, it was delivered to our doorstep. We were so excited and relieved that our experience was pretty painless – or so we thought.

About a week after getting our vehicle, the car had trouble starting. We took it to a mechanic to have it inspected, something we should had done as soon as we got the vehicle, and we found that it had transmission problems. We contacted the online buying service about the problem, prepared for a battle.

They asked to see the report of repairs the mechanic put together. Less than an hour later, they called us and apologized. They said they used a new mechanic for the inspection, and he obviously did not do a good job. Much to our shock, they immediately offered us three options. They offered to pay for all repairs, give us our money back or search for another vehicle using our full purchase price as the trade-in value.

After careful consideration, we decided to trade the vehicle in and ended up in a better vehicle for a lower price. No matter how great the vehicle initially is working, get it thoroughly inspected while you are in your money back guarantee period. Also, make sure that any guarantees or warranties you were offered is in writing.

Even though our car buying experience did not go exactly as planned, we would still include online car dealers when car shopping again. Don’t limit yourself. As you start to think about buying a car, explore all of your choices to help you find the best vehicle for your needs.

 

Creative Commons Photo Credit: Source

What to Consider Before Doing a Vacation Rental by Owner

August 23, 2016

Every year, we do a summer family vacation. This normally involves planning for the “whine factor.” What would my husband and I like to do that we think the kids would like with the least amount of whining?

We settled for a vacation in the mountains around the Tennessee area, visiting underground caverns and waterfalls. As always, I shopped around for the best deal for hotels for a family of four and found vacation rentals by owners to almost always be much cheaper and at the same time giving us more space. We have been using vacation rentals for a few years, and as I talk to friends about our experience, below are some of the things I tell them to consider before choosing a rental property:

What equipment is available for use? We rented a condo for a beach vacation, and I brought everything for the perfect vacation: beach chairs, toys, and towels. Had I asked in advance, I would have found out that the condo owner supplied everything.

In fact, her chairs were better than ours. The owner of the condo even had body boards and large water guns – a huge hit with my kids. Before lugging a bunch of stuff that will just take up space, contact the property point of contact and verify what equipment they have that’s available for use. Also, confirm what kitchen items will be provided, if any, such as utensils, napkins, plates and mugs.

What is the cancellation policy?  What if someone gets sick or there is a weather-related issue? Do you get your deposit back? Can you re-book? Ask for clear details on how long you have to cancel and the policies for emergency cancellations before you book.

Who do you call if you have an emergency? We accidently got locked out of one of our rentals. Luckily, we were able to quickly get back in, but I realized later, I would not have known who to call if there was an emergency. (The owner of our condo was out of the country). Find out in advance who to call if something breaks down.

What do former renters have to say about their stay? Read the reviews. People are NOT shy about telling others what they think of their experience. They will tell you about whether the pictures do not match what the rental actually looks like, the cleanliness of the property, noisy neighbors, slow response time, and basically everything else you need to know to make the most informed decision. I particularly look for comments from parents such as concerns about the property not being child-friendly or having nearby parks.

Vacation rental properties by owner can be a fun way to save money. Do your homework though. Taking the time to thoroughly review them will go a long way into making your vacation as peaceful as possible.

 

 

Which Job Offer Should You Take?

August 16, 2016

A few weeks ago, I was having a wonderful conversation with a young woman trying to decide what to do with her life. She recently received multiple job offers in multiple states. I asked her how she was weighing her options. She looked at me as if to say, “Why would you even ask this question” and she replied that she would take the offer that paid the most. I told her that she should focus on the net, not gross amount.

Look at net vs gross paycheck. State taxes vary wildly in the U.S. Some states like Florida and Texas do not tax your income and states like New York and Maryland not only impose tax taxes, but some of their cities also impose taxes. This can take a big bite out of your income. Consider doing a paycheck calculator so you can see how little or how much of your paycheck you get to keep based on what state you live in.

Review the benefits from each company. Not only can taxes take a bite out of your paycheck, so can your benefits. If possible, find out how much the average healthcare premiums are and compare. Taking a job that pays $6,000 more with a $250 per paycheck healthcare premium will eat away the extra money. Ask about other benefits like 401(k) plan matching, contributions to medical savings plans and generous time off as well.

Review cost of living by states. In addition to taxes, consider the daily cost of living, such as housing costs, to see how far your dollars can go. After all, you still want a life. Estimators like CNN’s cost of living calculator can help you compare what income you need to maintain your life style by city.

Potential job growth.  How much room to grow do you have with each opportunity? What programs do they have to help you grow professionally? Will your future organization pay for additional education and certifications?

Don’t just look at the gross salary. Calculate the actual net to you. Taking a few moments to really evaluate job opportunities can go a long way to helping you make the best decision for your future.

 

 

How to Avoid Hidden Car Costs

August 09, 2016

Experiencing two car accidents in four months has a way of making cars top of mind. As I was discussing this, one of our resident financial planners, Teig, offered great guidance about avoiding the hidden cost of cars. Here are his thoughts:

I really love cars. I bought my first car before I was old enough to drive and read the entire mechanic’s repair manual for it, cover-to-cover. The car was older than I was, a classic ’68 Mustang, and I spent every spare hour for three months repairing the engine, replacing worn out parts, painting, and polishing it up for my 16th birthday. It was a real head turner until a drunk driver plowed into it head-on one night – an event I shouldn’t have survived, and my car certainly didn’t.

Since then, I’ve owned about a dozen great cars, some new, most over 15 years old, some common, and most extremely rare. I’ve always been able to keep my cost of owning these rolling works of art and fine engineering to a minimum by knowing what to maintain and how so I was able to offer Tania some guidance on her questions. I will now pass them along to you, along with a few other money saving and car-life sustaining tips:

At the gas station, choose the fuel recommended by the manufacturer of your vehicle. All cars come with a specific fuel “octane” rating requirement, and filling up with the wrong octane rating can cost you big time. The octane rating is a measurement of the pressure at which fuel combusts (explodes) and is the number you see on different grades of gasoline at the pumps (usually 87, 91, 93).

Since combustion is what drives the engine of your car, you want every little explosion to happen right when it is supposed to for maximum efficiency. The manufacturer knows precisely when your fuel must combust for that efficiency, and they give you the octane number that works best for your car. You can look it up online, it’s in the owner’s manual, or in some cases, it’s printed on the gas cap or inside the gas door. Also, using the wrong octane will cause your engine to run inefficiently, use more fuel than you need, and damage the engine slowly over time – and repairing or replacing an engine will cost you about 10% to 20% of the car’s original value.

If you do decide to put a higher octane fuel than recommended into your tank, you may be spending hundreds of dollars more than you need to per year: According to AAA, the average gas price nationwide right now is $2.20 per gallon for regular, 87 octane, and $2.72 per gallon for premium, 93 octane. That’s a difference of $.52 per gallon. If the average distance driven per car in the U.S. is 15,000 miles, and the average gas mileage is about 21 miles per gallon, then buying premium gasoline when you don’t have to is costing you over $371 per year. Amazingly, that’s almost the average cost of a new set of tires.

Avoid letting your fuel level get below a ¼ tank to avoid damage to the fuel pump.  No matter how clean your gasoline, it still contains some sediment that settles in the bottom of your tank. When you let the tank get low, those sediments can get sucked into the fuel pump and filters, slowing the flow of fuel, causing you to use more of it than you need to use, and damaging the fuel system – all of which drain more money out of your pocket.

Rotate and balance your tires every 5,000 miles. For average drivers, that’s three times a year, and it’s an inexpensive and easy way to get the most value out of your tires. Assuming you maintain them (keep the tire pressure between 32 and 35, depending on your altitude), most tires will last you 30,000 to 40,000 miles so plan to buy a new set every three years or so.

A decent set of tires on my family’s every day drivers typically run between $400 and $600, but shop around as prices do vary wildly. Also, be mindful of the seasons where you live. In Colorado, where I live, buying tires around the first and last snow storms of the year is more expensive since there is usually a rush to change in-and-out of snow tires.

Only use the oil weight and other fluids recommended by your manufacturer.  You don’t necessarily have to go with their suggested brand, but just as with gasoline, using the incorrect type of oil and other fluids will cost you money in damage to your engine over time and lead to costly engine repair. For most vehicles, change the oil every 3,000 to 6,000 miles and other changeable fluids according to the manufacturer’s recommendations.

The Internet is loaded with additional tips for maintaining your vehicle, which can lead to some great financial savings. If you don’t share my enthusiasm for cars, don’t despair. Instead, check out my colleague Erik’s recent blog post on how to give up your automobile completely:  https://www.financialfinesse.com/2016/06/23/would-you-go-carless/

 

Building a Strong Financial Foundation

August 02, 2016

One of my favorite things to do is to talk to employees or honestly anyone about their finances. I find that some of the best guidance I give comes from other people. I also get a lot of insight as to why people find themselves constantly in a financial hole.

As I was doing a series of financial consulting appointments, I started to notice a trend in people wanting to make the right financial decision but not in the right order. My mantra to all is to look at building your finances like building a house. If you do not lay the right foundation, your house will crumble at the first sign of stress. For instance, if you start paying off debt with no savings, eventually life is going to happen and you will either have to stop paying on your debt to take care of the emergency or worse, get into even more debt because there was no cash to take care of the expense. Here are some steps to lay down a strong financial foundation:

1. Create and stick with a monthly spending plan. The greatest resource you have to help you achieve your financial goals is your income. If you do not have a written plan for how you are going to spend your income, you may overestimate how much you can spend and have nothing left over for emergencies.

Having a monthly spending plan is an important foundation to your finances because you need to know how much money you really have to use towards goals. It will also give you insight into how much you need in savings and how much you can actually save.Consider using websites like Mint to create a realistic spending plan to account for your spending.

2. Have an emergency savings account. An emergency fund is a foundation to a great financial plan because it makes sure you can take care of the unexpected like paying your mortgage if you suddenly lose your job or replacing your transmission without having to go into debt. I actually label my emergency savings account as “debt free insurance.” I found labeling the account is a constant reminder to my husband and myself that the purpose of it is to protect us from having to use debt to cover emergencies. This also prevents us from getting tempted to use this account for non-emergencies.

If your emergency account is at ground zero, break up your goals. First, shoot for a goal to get $1,000 into the account as soon as possible to cover minor emergencies and then set a goal of at least 3 months of expenses. Consider setting up automatic payroll deductions to reach your goal.

3. Pay off high interest credit card debt. For many that carry high interest credit card debt, they will save more money by paying off the 13-20% interest than they will make in an investment averaging 6-10%. No debt also means that your money can go towards your financial goals and not your creditors’ bottom line.

I had a meeting with a wonderful young woman who was contributing regularly to a Roth IRA but was carrying credit card balances with over 20% interest rates. I told her the best investment she can make is to pay off her credit card. We used the DebtBlaster Calculator to come up with a strategy to pay down her debts. She was surprised that she could pay off her debt in less than ½ the time by paying off her higher interest rate first, adding an extra $100 a month and committing ½ of her average tax refund amount to her debt.

As you look to getting your house in order, make sure you lay a foundation that can withstand the test of financial stress. It may not be fun. However, your foundation will help you withstand the financial crisis that will inevitably come and help make sure that whatever else you build does not buckle at the first sign of financial stress.

 

What To Teach Your Kids Before College

July 26, 2016

This time of the year is brimming with the excitement of future college freshmen over their new adventure. Talking to them is fun – hearing about their hopes, dreams and expectations of their freshman year. The more I started listening, the more my excitement wore off and disbelief settled in. I started to realize that some parents have this expectation that they can teach their kids zero about finances, give them an account with a few thousand in it and expect their kids to become financially responsible and budget properly. Here are some tips to follow instead:

1. Summer jobs are great economic teachers. If your student has a summer job, use it to teach your child invaluable lessons such as what their future careers may be for life if they drop out of college with no plans, that the gross vs. net difference in a paycheck is big and guidance on how to budget their money. Use websites like Mint, YNAB, or even the budgeting tools where you and your family banks to help your child create a budget.

2. Show your child the economic realities of college. Most people think about tuition, books and room and board. To some degree, that is only the beginning.

Every organization, fraternity or sorority your child is thinking about joining may have a fee, some to the tune of over $600 a semester. There are also those pesky fees like student health center fees, student activity fees, orientation fees, new student fees, technology fees and whatever other fees the college thinks up to charge. Use checklists like this one as a guide to possible costs.

3. Come up with an “oops I screwed up plan.” Okay, let’s be honest. None of us were financial wizards when we went to college. A lot of us overspent in our attempt to fit in and alleviate home sickness. Talk to your child before they mess up about how you will handle it the first time and come up with what you will do if they make the same mistake twice.

One of my friend’s parents told her daughter that she would consider the first time she makes a financial mistake a lesson learned. The second financial mistake will result in the “Bank of Mom” shutting down. My friend figured that at worst, her daughter would still have food from the cafeteria to eat, a dorm room bed to sleep in and feet to walk to class.

Don’t wait.Working on a contingency plan now will save you from unnecessary and probably emotionally charged conversations in the future. Take the time to work with your kids on a financial plan for college to not only save your wallet but to save your sanity.

What to Do When You’re Expecting

July 19, 2016

When my husband and I got married, we wanted children, but we had to face the reality that it would be difficult to have children due to prior medical issues. Apparently, God had a different plan for us and I found myself surprisingly pregnant within two weeks of trying. We were happy with the news but after the joy wore off, I started putting on my planner hat to figure out how to plan financially for the new baby. I’ve always believed in learning from other people’s experience, so I started asking friends of mine who were parents what financial guidance they would give to a woman pregnant with her first baby, knowing what they know now.  The list started pouring out:

1. There are enough surprises to being a new mom without medical bills being one of them. Contact your healthcare provider to find out how you are covered for medical visits, including vaginal and c-section deliveries and well-baby care. Once you have the numbers, consider increasing your contributions into a health savings account (HSA)  or a flexible spending account (FSA) to cover the costs with pre-tax money.

2. You only get one time to be a first-time mom so take all of the leave offered to you. Contact your employer to clarify how much time you can take off and how much you will get paid during the time off. Many companies offer paternity leave so find out the rules for the baby’s father as well. If the leave is unpaid, figure out how much time you want – factoring in that you may want to take leave before the baby comes and/or your bundle of joy may be late (mine was almost two weeks pat due) into your numbers.

3. What is your ideal maternity leave? Do you have lots of friends and family to help out or do you need to outsource? If you are the primary cook of the family, do you need to budget an eating out, food delivery or frozen food budget? Do you want a nanny or baby nurse to help you out? Would you like a cleaning service to help you for the first few weeks?

Start thinking about what costs are involved in each of these options. Delivered prepared meals can run over $300 for two a day. A baby nurse could cost upwards of $200 a day. Average cost of maid services can run upwards of $157 for the service. If your budget is tight, consider asking for frozen meals or even for people to pitch in and pay for a cleaning service as part of your baby shower gift or reach out to your local place of worship for help.

4. Once you have your numbers, start to work on a budget for when you are on maternity leave as well as a budget for when you return to work.  Account for possible medical costs, any gaps between your pay before maternity leave, and the costs that come with a new baby – endless diapers, wipes and if needed, formula. After you go back to work, you’ll also have possibly new work clothes (it took me forever to fit back into my pre-baby clothes), daycare (for a year, I called my daughter my little mortgage payment) and additional doctor visits. Any parent with kids can tell you that with the first baby, as soon as they sneeze, you are crying and heading to the doctor. With baby number #2, as long as they aren’t spitting up blood, you don’t even bother.

5. If your budget shows a shortfall, take the total amount needed and divide it by the months you have left and that is your savings goal. Start thinking about what you can cut back on now to save the funds. Can you reduce your cable and cell phone bills and eat out less? Can you use vacation days to get additional paid time off?

What did I learn from all this? Overall, the best guidance centered around thinking through what your ideal maternity looks like, putting those ideas into tangible dollars and realistically assessing your finances to see if it is doable. Taking these few steps will make your first few months with your bundle of joy less financially stressful.