How to Survive and Thrive in a Pricey City

July 12, 2016

I was born and raised in Brooklyn, NY – before it was trendy. When I was growing up Red Hook, the underpass of the Brooklyn and Manhattan Bridges were places you did not want to go to at night. It seemed like overnight the worse and somewhat cheaper parts of town became the most sought after and expensive places to live.

These changes are what attracted my cousin to move to Brooklyn later this year. As I was talking to her, I realized that she was excited about the idea of living in New York, but the reality of the financial change from her move had not quite sunken in yet. I told my cousin about financial changes she had not fully factored into her move such as:

Paycheck Sticker Shock: My cousin was moving from Florida to Brooklyn. She knew that she was going to experience a major shock in expenses, but she had not factored in the change in her take home income due to taxes. Unlike Florida, New York City and some other major cities have state and city income taxes. She was shocked to see about a $600 a month estimated decrease in her paycheck once she moved there. For anyone moving to a new state, using calculators like the one from Smart Asset to gauge what your new income will be can help you better manage your finances.

Caviar Tastes on a Tuna Fish Budget: My cousin grew up watching The Cosby Show and fell in love with the brownstones featured on it. She knew the rent would be high but she almost passed out when I told her that a one bedroom apartment in Brooklyn Heights could easily run over $2,500. I told her to first do a budget to see how much she can afford. Her budget did not support $2,000 in rent so we researched apartments on websites like Apartments.com, which helped her set realistic expectations of where she could afford to live.

We brainstormed ideas like renting a room, living in a basement apartment, taking in roommates or living on the outer edges of Brooklyn. We also searched apartments that were in rent controlled/stabilized buildings to protect her from crazy rent increases. I encouraged her as well as anyone moving to a new city to research the cost of housing and realize that it may be a choice between a longer commute or more expensive rent.

Ditch the Car: My cousin grew up in a place that required her to have a vehicle. It never occurred to her that she may not need a car. She was shocked when I told her that my mother, a typical New Yorker, does not have a driver’s license, and I was 24 before I got mine.

I encouraged her to get to know the mass transit system in her area and estimate the cost of maintaining her vehicle in Brooklyn. Between the extra cost of car insurance, gas, parking and the hassle of alternate side of the street parking, she decided it was not worth it and ditched her car. The extra savings helped her to afford an apartment closer to where she worked. Call your insurance company to find out the cost of insurance in your new location, look up the average gas price, the average cost of parking and the hassle of finding parking to see if it is worth keeping your car.

Finally, I encouraged my cousin to do a comprehensive budget, not only factoring in the cost of living but also vacations, since she will either have to rent a car or fly home. She created a budget that helped her get her apartment and even have a little fun. Because of all the preparation she did, she was able to enjoy her new location without going broke in the process.

Reality 101

July 05, 2016

I recently went to New York to visit my family. I always love my trips because I get to hang out with my loved ones and pretty much eat nonstop, but I do not actually have to cook anything. Before the kids came, I always had my favorite foods cooked when I went home. Now when I go home, it is the kids’ favorite foods.

While I was visiting, I had a chance to talk to my nieces and nephews. Most of them are in their twenties so our conversations have shifted from the latest Jonas Brothers song to college and their futures. As my niece started talking about moving out of her parents home and becoming a teacher, I started taking a good look at her. Her hair, clothing and handbag probably cost more than most of the outfits I owned combined.

I, like probably all of you, can see the financial train wreck as her spending and the reality of her income, unsupported by family and in Brooklyn, NY of all places, came together. I recognized that she, like many young adults, was in for a serious reality check the first month she attempts to pay for rent and a $1,000 handbag on the same paycheck. I attempted to stop the wreck I saw ahead by doing the following reality check with her.

Salary

We looked up what her potential starting salary as a New York City Public School Teacher, which would be about $54,411 a year. (Parents, go online to websites like the National Association of Colleges and Employers (NACE) to find out the average starting salary for your child’s major and share it with them.) She was initially disappointed. She thought it would be higher, but then she got excited.

Take Home Pay

I quickly stomped out the excitement by reminding her that this is gross and we needed to calculate net. We used a paycheck calculator like the one from Paycheck City to estimate that her take home pay was going to be approximately $3,000 month. Give your kids the gift of a reality check by helping them understand the difference between a gross and net check.

Living Expenses

Next, we started creating a budget. She already knew living in Brooklyn was expensive, but a studio apartment, not even a one bedroom, in the area she wanted to live in was about $2,000 a month – almost her entire paycheck. If she wanted to share an apartment, a two bedroom averaged $3,400 a month.

Up until this point, I felt I had about 50% of her attention. When we started working on the budget, it really opened her eyes as to exactly how little her money stretched. Consider creating a post-college budget with your children who are close to graduating to help manage their salary expectations and lifestyle once they graduate.

After my niece got over the shock that her lifestyle is going to look very different once she is on her own, she surprisingly started talking about ways to cut back on her lifestyle and save money. She said that her biggest motivation was the fact that if she did not control her spending, she will be living with her parents until 100. Take the time to give your kids a financial reality check so they can start off their adult lives on the right foot.

How to Spend Less On Eating Out

June 28, 2016

We all know eating out less can save us money. It sounds easy but at times, it can be hard to execute, especially with late work days, kids’ activities and frankly, days where I would rather have a root canal than step foot in my kitchen to cook. If this sounds like you, here are ways you can have your budgeting cake and eat it too:

1. Set an “eating out” budget. I find eating out is such a big budget buster because like with a diet, most people have good intentions but cheat. Just accept the fact that you will eat out occasionally and budget an amount of money you will spend on it. It may be $10 for breakfast, $10 for lunch and $10-20 for dinner as a starting point. Consider committing to brown bagging it four days out of the week and eat out with friends on Friday and/or on the weekend.

2. Come up with strategies to reduce your eating out costs. If you are the group organizer, you have the home court advantage. Choose a place that costs less. Even better, consider using websites like Groupon or Living Social to scope out coupons.

If you have a spouse or significant other, consider splitting a plate. You wallet and your waist line will thank you. Save money on drinks by drinking water. At $2 each, that is an $8 saving for a family of four and $416 over a year.

If you have kids, take advantage of kids eat free programs. If you have a family with hungry little ones, consider using websites like MyKidsEatFree.com or FrugalLivingTV to find programs. Plan out your day and look for places where kids can eat for free near you. Alternatively, this may be hard, but if you can get your kids to agree on the same meal, you can also have them split an adult meal.

3. Use grocery store prepared meals as a compromise. You are technically eating at home with a prepared meal. Stores like Whole Foods and Publix have fully prepared meals that you can heat up for a few minutes and have a meal with minimum kitchen time.

Yes, you can have your cake and eat it too. Just remember that your cake has limits. Budget the amounts, plan your eating out days and enjoy!

Don’t Let Medical Bills Ruin Your Financial Health

June 21, 2016

If you have read my posts, you know that my family has been in the emergency room so often that during one visit, the nurse was able to get our information from memory. This experience gave me a taste of what people with ongoing medical expenses go through. We are lucky that most of our visits needed little to no follow-up and we are all healthy though.

Not everyone is so fortunate. A study by Harvard University showed that medical expenses are one of the top reasons for bankruptcies. If your medical expenses are crippling your finances, consider doing the following:

Shop around for prescription medication. The same drug can cost wildy different prices depending on where you go to get the medication. This is because the price of the drug typically depends on the pharmacy’s deal with the supplier, the pharmacist’s overhead and profit margins. FDA regulates the drug, not the price. Shop around for the best price or use websites like GoodRx.com or LowestMed.com to shop around for the best price in your area.

Bonus Tip: Typically, you do not need to be a member of warehouses like Costco or Sam’s Club to use their pharmacies.

Before you get a medical procedure, find out the average cost. Even though your doctor may be covered by your insurance, the facility where you are getting your procedure may not be, so be sure to verify insurance coverage. The price of a procedure can cost three times or more as much at one facility vs. another. Call local hospitals or use websites like Healthcare Bluebook to gauge how much your medical bill may cost. Finally, try to negotiate the cost of your procedure before you get the service.

Bonus Tip: Even after you have your procedure, still do a cost comparison. If your bill is much higher than the average for your area, use that information to negotiate your medical bill.

Contact your hospital if you cannot afford to pay. Many hospitals have programs for people who are uninsured or under-insured. Contact your medical provider before the procedure if you feel like you might not be able to cover the bills. The billing office may be able to find alternate ways to pay for the bill.

In addition, ask the hospital for a written financial assistance policy. The policy should spell out eligibility and the process of applying for assistance. Make sure any deals and/or discounts you get are in writing as well.

Bonus Tip: Medical bills are notorious for errors. After your procedure, ask for an itemized bill and your medical records. Any items on your bill that do not match your medical records should be disputed.

If you do not have the time, patience or ability to negotiate on your own, consider hiring a medical bill negotiator. Years ago, I was involved in a car accident and quickly mounted several thousand dollars in medical bills. After going back and forth with the insurance company and lawyers, I hired a medical bill negotiator to review my bills and they found errors that saved me thousands of dollars. The cost of the services varies. A company may charge by the hour. Others charge as a percentage of service. You can search for a medical bill negotiator on websites like the National Association of Healthcare Advocacy Consultants, the Alliance of Claims Assistance Professionals, and the Patient Advocate Foundation.

Bonus Tip: See how much you can negotiate on your own before hiring a professional.

Remember that you have a lot more negotiating power than you think when it comes to your medical expenses. If possible, consider using the resources mentioned in this blog post to shop around for the best price for your medical needs and to proactively check your bill for these. This can go a long way to slashing your medical costs.

Don’t Be a Financial Horror Victim

June 14, 2016

I love old B-rated horror movies. In fact, I was watching the Halloween countdown of horror movies at a Halloween party, and every male under 20 was impressed by the fact that I knew almost every horror movie by watching one scene. I am sure some of this comes from my male relatives taking me to an R-rated horror movie (sorry mom) when they were forced to babysit me. I felt so grown up watching the movies, and I was surprisingly so fascinated as to how they created the scenes that I never got frightened.

What struck me about every movie is that moment when you almost root for the bad guy. You know the scenes when the next character to die goes into the scary building and then runs upstairs as if he or she will grow wings and fly? They always had a bad feeling and always ignore the outward signs. As I recently watched a horror movie with my husband, I was struck by the similarity between people in horror movies ignoring all of the bad signs and how people ignore the “writing on the wall” about a bogus advisor.

During 2008-2011, the main demographic of the group where my office was located was snowbirds – retirees who spent their winters in Florida and their summers in Georgia. One client at the time asked me to talk to her sister. She said something did not sound right about her sister’s investments. After taking a quick look at her statement, I recognized the name of the investment company, and I unfortunately had to tell her that she was a victim of a Ponzi Scheme. News traveled quickly, and I soon found myself flooded with retirees.

I could feel the panic of most of the retirees I spoke to. Most sensed something was wrong. After I got to know many of them, I asked them what they would have told themselves ten years ago, knowing what they know now. Overwhelming what I heard was:

1. If it is too good to be true, then it is. Many of them knew markets goes up and down and anyone that promises nothing but an upside automatically should raise a red flag. No investment is 100% perfect. As you can see from this chart that markets have highs and lows. If you are promised returns that do not match this chart’s returns question your financial planner as to why their results differ from historic average. Remember, a good planner will go over the benefits as well as the risks with their recommendations and work with you to make the most informed decision.

2. If you do not understand the investment and/or investment philosophy, ask until you do. Over and over again, I heard that the reason why they thought they did not understand their investments was because they weren’t knowledgeable enough. You should always understand the investments and/or investment strategy and how those choices will get you closer to your goal. If you struggle to understand this, keep asking until you do, even if it means finding an advisor that can help you understand. If you struggle to understand financial lingo, consider using websites like Investopedia University or Morningstar’s Investing Classroom to help you translate financial jargon into something understandable.

3. No matter how much you trust your advisor, do a background check. Not one person I spoke to did a background check. All believed everything they were told. In some cases, the background check would have revealed past problems with clients. No matter how trustworthy you think your advisor is, check their records at FINRA BrokerCheck.

You can also use this article as a checklist to finding the right financial advisor for you. Whatever you do, don’t be like a horror movie victim. Noticing bad signs and doing a little homework can go a long way to preventing you from being the victim of a bad financial planner.

Life Lessons to Help Your Kids Start to Value Money at an Early Age

June 07, 2016

One of the greatest gifts I have been given is to be what is called a “first generation American.” My dad came to the U.S. over 45 years ago from Guyana to pursue a degree in law. The financial lessons I learned sandwiched between my American and Guyanese cultures have helped me to understand the value of money at an early age.

Money is earned, not given. I do not remember ever getting an allowance. I worked and earned money, starting at about age 4. My dad was very clear on what work was. Work was helping out with household chores, cleaning my room without being asked, and getting good grades and reports from my teachers.

When I did these things, I earned money. If I did not, dad deducted the money I earned. I learned that I have to work to earn money and not to expect anything for free. Consider having your kids earn money instead of an allowance and hold them accountable when they do not do their work. You will teach them the value of money and to have a strong work ethic.

The pain of discipline or the pain of regret – my choice. The money we earned was to pay for school activities, clothes and any extra expenses from a family outing (a balloon, toy, food, etc.) My dad held us accountable. Once the money was gone, so was our ability to pay for school activities and buy anything for an event. This taught us to think about the future and to budget our money for things we want to do.

When you give your children the money they earned, come up with a plan for it. In our home, our children give 10% and save 10% ,and we work with them to plan for how they will spend the rest. We make it clear, just like my dad, that once the money is spent there is no “Bank of Mom or Dad” to bail them out.

Be generous. My family were givers from as early as I can remember. We gave of our time but also our money. We gave money to our family in Guyana, to causes we cared about, and to our church.

This taught me from an early age that money is a tool that can be used to get the things you want but also to help others in need. It also led to feeling gratitude for the things you have. Teach your children the true value of money by having them donate some of their earned money to someone in need.

Of course, not every family is like mine. Your family and values may be different. Whatever they may be, come up with a game plan to set a strong financial foundation for your child(ren) so they can build a successful future.

What Climbing Mt. Everest Can Teach Us About Budgeting

May 31, 2016

Budget – the word can strike fear in the bravest soul. A budget for some is like climbing Mount Everest. Many have tried, many have perished, and the ones who get to the top are never the same again. As I was watching a documentary about Mt. Everest, the similarities between the ones who made it to the top and lived to tell about it and the ones who did not or perished are striking similar to those that successfully use a budget and those that have struggled to stick to a budget:

Unrealistic Expectations. Some of the failed climbers set unrealistic expectations about their own physical health, mental stamina and timeline to climb the mountain. Likewise, I have found one of the reasons why people fail to stick to a budget is that they create an unrealistic one. Look, you eventually are going to buy clothes and eat out. Even if it is not that often, put a dollar amount in the category. If are not sure where to start, look at your spending for last year, divide that number by 12 and use that number as your starting point for your monthly budget.

Not planning for the unexpected. Many climbers did not have a plan for how they would handle sudden changes in weather. Like the climbers, many people do not buffer what I called the “expected unexpected events.” We all know at some point our cars will need repairs and we will need to call a plumber. We just do not know when these things will happen. If you don’t know how much to save, consider reviewing your bank account for car maintenance and home repair transactions for last year, dividing it by 12 and using that number as a starting point.

Not changing your plan. Successfully climbing Mt. Everest means making adjustments to your plan since your route may change or the terrain might take a climber longer than expected. As our lives change, the budget needs to be adjusted. Where I live in Georgia, my gas bill is higher in the winter and my electricity skyrockets in the summer. Also in the summer, I have to account for summer camp expenses. Review and adjust your budget to account for the highs and lows of your expenses throughout the year.

Of course, sticking to a budget is a lot easier than climate Mt. Everest. We can still learn a lot from it though. Making these adjustments can help you experience the “high” of financial wellness.

Let’s Get Ready to Rumble…

May 24, 2016

I may have mentioned in prior blog posts that I am a huge boxing fan. There really was no choice. From the time I could crawl, I remember sitting in my dad’s lap watching boxing with my brothers and loving every second of it. (Unfortunately, I loved it a little too much and my teacher once called my parents about a boy I practiced my left hook on – mind you, he did dare me.) My earliest memories of television are watching Michael Buffer introduce the boxers and give his famous tagline, “Let’s Get Ready to Rumble.”

When summer starts coming and the expenses start mounting, I often think of Michael Buffer’s tagline. Summer time is a rumble between my finances and ever-mounting increases in expenses. Initially, I just noticed that money was tighter in the summer time, not really being able to figure out why. After I discovered the power of creating a monthly spending plan and tracking my expenses over a number of years, I noticed a certain pattern began to emerge in my family’s spending and I was able to prepare for the increases in expenses.

Summer Camp – I live in the south so my kids are done with school and free daycare (public school) at the end of May. Even though they have after-school care and school activities, summer camp is still more expensive. If this sounds like you, consider contacting your daycare about sibling discounts, reductions based on income or early registration. Second, research the summer camps not only for the best fit for your children but for the best value. Consider using last year’s childcare expense as a starting point, divide it into 12 to get a monthly average and contribute that amount to a dependent care flexible spending account (FSA) if eligible so the funds can come out tax-free to pay for your childcare expenses.

Vacations – Make sure your summer vacation does not follow you for the next 6+ months in credit card expenses by saving for it now. Honestly assess your finances to see if you can afford to get away on a vacation or if an inexpensive staycation is a better financial fit. Consider using a travel budget calculator to estimate your travel expenses. To come up with the amount of money you may need to save for your vacation, divide the estimate by the number of pay periods you have. From there, it’s a matter of setting aside the funds until your vacation.

Utilities – Depending on your climate, you may find your utility bills creeping up. I live in Atlanta and I find my electricity skyrockets in June. If you have a pool, your expenses may go up due to water and pool maintenance. Your water bill may also increase due to lawn care. Review your statements from last summer to estimate your costs for this year and look at where in your budget you may need to cut back to make up for the additional cost.

Holidays – I find Memorial Day, the Fourth of July and Labor Day to be expensive holidays because we typically do a day trip or a lot of activities on those days. Consider thinking through what activities you want to do. Will you be flying or driving? Will you need a hotel? Will you be eating out or munching on picnic foods?

Write down what you think the expenses may be. Add 10% for extras. Then break down the amount by the number of pay periods you have until the event and start saving.

Parties – If you are like our family and love to cook and feed people then summertime gives you plenty of opportunities as well as expenses. All of a sudden, the patio furniture may need to be replaced and a new grill may be “needed.” Plan for the food and estimate the costs. Then divide the costs by the pay periods you have until the event to estimate how much you may need to save.

Gas: Typically gas prices go up in the summertime. There’s not much you can do about the increases, but you can look on apps like gas buddy to look for cheaper gas. You can also use some of the fuel economy tips from the U.S. Department of energy like driving the speed limit or removing unneeded items from your truck or using cruise control to make your car more fuel efficient.

Consider thinking about the things you want to do and start saving for them now. One great idea I heard was to create a “summer sinking fund” that you use to save throughout the year so you have a pool of money available for upcoming summer expenses. Saving now, even in small amounts, will a long way into taking out the worry of summer expenses.

4 Things I Wish Someone Told Me Before I Graduated From College

May 10, 2016

As I talk to my friends’ graduating children, I am always struck by the hope in their faces. They believe that they control their futures and that their lives will be better. It makes me think about my own graduation and reflect on what I wished someone would have told me about finances:

#1- I will actually have to pay back the money I was taking out in student loans. I do not remember thinking about paying back my student loans. I probably thought that the student loan fairy dropped into my college’s financial aid office after graduation and deleted my debts. If I had known how long and painful it would have been to pay back my student loans, I may have made different choices. I encourage parents to sit down with their kids, calculate repayment costs, estimate their starting salary and give them a cold dose of reality as to what their paycheck may look like after taxes and deductions come out.

#2- The car I stupidly bought after college graduation will become the story I tell people about what not to do when you graduate. I worked so hard to graduate and my car was old so I purchased a car I really did not need. It was cute and in the showroom and the second I saw it, I said “I do.” What I did not realize was that I was also saying “I do” to a 5 year car loan that took almost a 4^th of my income at that time. I wished someone would have told me that the car I get will dictate my ability to save money, take vacations and contribute to my 401(k) plan.

#3- A business wardrobe is not a reason to get into credit card debt. I was lucky enough to land a job with a large corporation but I realized that I needed to get business clothes. I used this as an excuse to run up $3,000 in credit card debt on a new wardrobe. I think this included a Coach bag and wallet that I never used. I wish someone would have told me that credit card debt is not necessary and worked with me on a plan to pay it off

#4 – The earlier you contribute to a 401(k) plan, the less you need to contribute. I wish someone would have told me how important it was to contribute early, the power of compound interest and how starting with even a small amount makes a big difference, especially when your employer is giving you free money in the form of a match to help you save for retirement. Talk to younger people about how your choice to save early has helped you or about your regret in not starting earlier. Run an estimate for them so they can see how a little makes such a big difference .

Looking back, I wished I would have gotten a cold dose of “adult” reality. I wished I would have known that being on my own meant that my financial choices had consequences that can easily be taken care of if I had been willing to buckle down and pay off my debts instead of using credits cards to upgrade my lifestyle. The best gift you can give a college graduate is to help them start off their futures on the right financial footing. Work with them on a budget, encourage them to pay off credit card debt, teach them the importance of contributing to a 401(k) plan and help them come up with a game plan to pay off their student loans before their children are in college.

3 Lessons I Learned About Insuring A College Bound Kid

May 03, 2016

I was talking to a group of friends whose kids were going off to college. Since I am a late-in-life parent, I was curious to see how they are handling being empty nesters. I expected some tears and sad stories about their kids leaving the nest. Instead, my friends were high-fiving each other that they survived the teen years and deciding what do with their kids’ rooms. They were even talking about going out and celebrating!

Of course, as the financial professional in the group, I had to burst everyone’s bubble. I asked the group if they had talked to their insurance providers about their kids going to college. I brought this up because of all the lessons my family learned when my nephew went to college.

Lesson #1: Times have changed. When I was in college, my car, TV and computer were worth about $1,000. Today, a kid is going to college with thousands of dollars of electronics between their smartphones, iPads, X boxes and laptops. When my nephew’s dorm room was burglarized, my brother and his wife learned that their homeowner’s policy extended to my nephew’s dorm room but unfortunately, the extension did not cover the amount that was stolen. Contact your insurance company to make sure you have adequate insurance and consider adding additional coverage.

Lesson #2: Moving off campus is a game changer. The second lesson we learned is that when my nephew moved off campus, my brother’s homeowner’s policy did not provide my nephew with any coverage and in our case, a renter’s insurance policy may be needed. Contact your insurance carrier to see if your child will still be covered under your policy if your child lives off-campus. If not, consider renter’s insurance.

Lesson #3: Always update your auto policy carrier about any changes. If your child is leaving his or her car at home, ask about a discount since they will be driving it significantly less. This could have saved my brother and his wife hundreds of dollars in unnecessary car insurance.

Sometimes you may need to pay more though. After my nephew took his car with him to college, he was involved in a fender bender. When my brother contacted the insurance company, they refused to pay because my nephew was using the car for work to deliver pizzas part-time and we learned that he needed additional coverage.

So what’s the bottom line? Whenever you have a major life event, like a child going to college in this case, contact your insurance carrier to make sure that you have the best insurance for your needs. You don’t want to learn any of these lessons the hard way.

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 Make These 3 Common Tax Mistakes

April 19, 2016

As we wrap up tax season, I find people have more questions than answers. Some are pleasantly surprised and others are shocked and even angry about owing taxes. As I was sitting with family over dinner, their grumblings about taxes kept cropping up in the conversation. As they continued to talk, I realized that many of their problems came from the following mistakes about taxes:

Mistake #1: Getting a big tax refund. Giving an interest-free loan when you need the money is almost never a good idea. Consider using the IRS Withholding Calculator to estimate how much withholding to use to break even on your taxes. This may free up the funds for other financial goals like savings, getting out of debt and college.

Mistake #2: Not taking advantage of itemized deductions. An article from Nolo.com cites a report by the Government Accountability Office stating that as many as 2.2 million taxpayers overpay taxes by an average of $610 per year due to a failure to itemize deductions. Consider itemizing deductions if you:

Paid interest and taxes on your home
Made a large charitable contribution
Had a lot of uninsured medical and dental expenses
Had large unreimbursed job-related expenses

Mistake #3: Not looking to your employer benefits for tax savings. I recently spoke to a friend who was concerned about owing taxes and was looking for ways to lower her taxable income. I told her to start looking at her workplace benefits. Pre-tax 401(k) plan contributions lower your taxable income as well as contributions to pre-tax medical savings plans like Flexible Spending Accounts or Health Savings Accounts. Since she has children under 13 years old, I mentioned the Dependent Care Flexible Spending Account so she can contribute money pre-tax for her children’s childcare expenses.

Don’t believe everything you hear, especially when it comes to taxes. Before jumping on everyone’s tax bandwagon, take some time and do research to validate if what they are saying is true. If you find this overwhelming, consider working with a tax professional that can help separate fact from fiction.

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.

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.

How to Trick Yourself Into Better Financial Behavior

March 29, 2016

A friend of mine once told me that any goal you want to achieve is about 80% behavior and about 20% head knowledge. We all know what to do to take control of our finances – spend less, dump consumer debt, and save more. However, as simple as it all sounds, it is not easy. Life and our emotions can get in the way of your goals.

I say if you can’t beat it, trick it. With April Fool’s Day just days away, take the following steps to trick yourself into better financial behavior: (Some may sound crazy but they work.)

1 . Can’t get the ball rolling on saving? Consider saving by setting up a payroll deduction into a savings account. That way you save it before you even have a chance to spend it.

2. Struggling to keep your hands off your savings? Try to use the hide feature on your online account to hide your savings account. If it is out of sight, it might be out of mind.

3. Still feel like you can’t trust yourself if the savings is at the same bank with your checking account? Consider moving your savings account to a different bank where you do not have immediate access to funds. Just don’t forget it’s there for when you do need the money.

4. Do you have a budget but have a hard time actually following it? Consider identifying areas where you overspend (eating out, groceries, clothes, etc) and using cash for those items. It makes you more mindful of your spending and it creates an automatic boundary.

5. Do you want to increase your retirement plan contributions but feel nervous about the increase? Consider contacting your retirement plan provider about a feature called auto-escalation. This gives you the option to automatically increase your contributions annually, in many cases by as little as 1%. Tip: If you typically get an annual pay increase, consider timing the automatic increases a month after your pay increases so you won’t feel the difference.

A lot of times, we know what we need to do with our finances. The hard part is actually doing it. These steps may seem simple but they could be just the boost you need to help you reach your financial goals.

5 Great Ways to Have a Spring Staycation

March 22, 2016

Spring is in the air and if you are like me, you are thinking about what to do with your kids during the season. For many, it is taking time off to spend quality time with your family. You start to think about beach trips or a trip to Disney. Then a cold dose of reality hit. For me, it is my family’s commitment to our financial goals and for others it may be the knowledge that if you have to finance your vacation then you probably should think twice about taking the vacation.

If you find that traveling away from home for spring break is not in the cards for you, never fear. The staycation is here. You can have a great vacation, full of relaxation and family bonding.

The key is to make it as much like a family getaway as possible. Have some ground rules for your staycation: no smartphones (or limited use), no tablets (my eleven year old nearly died), limited television, no working from home, and no cooking, cleaning or laundry. (I fought for those.) Remember, the only thing your kids really want is uninterrupted time with you. How it happens does not really matter to them.

Before you begin, come up with a budget. Although staycations are typically cheaper, the costs can add up quickly without the boundary of a budget. Below are 5 ideas on cost effective staycation ideas:

Discount sites. Use online discount websites like Groupon or Living Social for discounts on local activities like roller skating, fairs and plays.

The library. Visit your local library to learn about free events like puppet shows or movies. Some libraries offer free passes to zoos and museums. At our library, you can also check out parking passes to national parks.

Picnic in the park. Have fun with it. You can get kites at a dollar store. You can also get a bucket, fill it with dishwasher liquid and make huge bubbles. Our kids loved it (and so did we). Check your local area for free movies in the park or free music and bring popcorn.

Movies. If you live near a discounted movie theater, take the family to go see a favorite movie you missed or a favorite movie the kids would like to see again. Many discount movie theater have ½ off nights.

Camping outdoors or under the table. Surprisingly, this was my kids’ favorite activity. We got popcorn and told ghost stories. You can even grill out.

Spring break doesn’t have to mean debt. You can have a family vacation that won’t follow you in credit card charges for the next 6 months. Taking the time to do a little bit of research to unearth staycation ideas can create a vacation your kids will remember for years.

The Insurance Move I’m So Glad I Made

March 15, 2016

If you ever read any of my posts, you probably know that I am a “drive a car until the engine falls out” kind of girl. Unfortunately, that is exactly what happened. I was coming home from the gym, wondering why I keep competing with women half my age, and a car came out of a fast food restaurant without stopping and hit me. I was unconscious for a few minutes and when I came to and was able to think, I thought it was a little strange that the driver of the other car did not get out. When I noticed the car starting, I tried to get the license plate number but it was too late, the car had driven off. Continue reading “The Insurance Move I’m So Glad I Made”

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”

What A New Baby Really Needs

March 01, 2016

I was talking to a friend about two weeks away from giving birth. She was crying over something. (At her stage of my pregnancy, I remember crying over a grocery store commercial.) After she could tell me what was bothering her, she said that she felt like an unfit parent. Continue reading “What A New Baby Really Needs”

What To Do Before You Say “I Do”

February 23, 2016

I am at a stage in my life where I can look back at my choices and say to myself, “What on earth was I thinking?” This is especially true when I think about past relationships. As I was talking to a group of young women who were recently engaged, I saw glimmers of my past relationships in their stories and thought to myself: what do I wish someone would had the courage to say to me that would had saved me from future pain? Continue reading “What To Do Before You Say “I Do””