Meet Our Newest Planner: James Jacobucci

April 10, 2017

The newest member of our CERTIFIED FINANCIAL PLANNER™ team, Jim Jacobucci, CFP®, MBA, has always liked to save money. It’s one of the reasons he switched careers to financial planning from manufacturing. I asked Jim some questions about his money story, money and family life, and what it means to come to Financial Finesse:

What’s your personal mission? Who do you most want to help?  I most want to help people who generally do not have access to sound financial guidance. Those who have problems making ends meet each month or who have taken on high levels of credit card debt need help just as much, if not more, than anyone else. My mission is to provide sound guidance on how to navigate through everyday financial issues that are important to everyday people.

What’s your money story – what your parents taught you about money, etc.? Did you hold any negative beliefs about money that you had to overcome? For as far back as I can remember, I liked to save money. I’m not really sure why. When I was, say, 8 years old, I did not have a goal in mind to buy something specific, but I just liked to save what little money came my way.

I do not recall my parents teaching me specifically about money, but we were a middle class, single income family. When my dad was working, things were fine, but if he was laid off, things got pretty tight, pretty quickly. Maybe just experiencing this influenced me to save when I could.

What is the biggest mistake you ever made with your money, and what did you learn from it? The biggest financial mistake I ever made was not having an adequate emergency savings fund while I was going through a career change. I knew that my income would drop during this transition, but I did not properly plan for all scenarios. For a while, money was pretty tight until I gained some more traction in my new profession. What I learned from this is to always hope for the best but plan for the worst when it comes to making decisions that will have a long term financial impact.

What have you learned about money and marriage that you can teach the rest of us? I am very fortunate in that my wife and I are pretty much on the same page regarding our finances and how to prioritize. And therein lies a lesson learned. This may sound a bit too clinical, but I believe when you commit to spending the rest of your life with someone it just makes sense to be sure you have the same general philosophies when it comes to money.

My wife and I never really had in-depth money conversations before getting married, but you get a pretty good grasp on someone’s financial tendencies when you are spending time together. While dating someone, if I saw she was spending frivolously on luxury items at the expense of more practical things, that would have been a red flag for me. Not that she would be “wrong” in her spending choices, but having such a different outlook on spending compared to mine would present some challenges if we did get married.

How do you teach your kids about money? I try to explain to my kids why I am making the everyday choices that I am with regards to money. It started out at the grocery store when they were young.

If we were going to buy a gallon of ice cream, I would explain why I was buying the brand that I was. Was it on sale? If one brand is more expensive, is it worth spending that extra dollar on that brand or would it be wiser to spend that dollar somewhere else?

Now that they are a bit older, when it is time to make a purchase for my kids for say, new summer clothes, it is left up to them what to buy (as long as it is tasteful). They are given a budget of how much to spend, but it is up to them on how they spend it. My wife and I certainly provide some coaching along the way and help weigh the pros and cons of buying a designer item vs. a more run-of-the-mill item.

What do you think your generation does differently with money/attitudes about money? Being a Gen Xer, I think my generation sees money that is something that you need to work hard for, to earn. Put in an honest day’s work and get an honest day’s pay.

If you could wave a magic wand and reform financial services, what would you do? I am frustrated that those who need the most help, those who are really struggling to make ends meet, get the least help. One of the great things about delivering workplace financial wellness benefits is that we’re compensated and incentivized equally for offering financial guidance to an employee with a net worth of $10 or one with $10 million. This is the approach of Financial Finesse and why I love working here.

Tell me about your financial coaching philosophy? First and foremost, I respect every employee that I am coaching. They may be in a bad financial spot, but there are always reasons for getting to where they are.

Understanding those reasons, how they affected their finances, and what can be done to improve their financial wellness is what I strive to do. I never pass judgment on a person, regardless of their situation or how they got there. It’s my job to listen and understand and give employees the tools to make improvements.

Why did you want to earn your CFP® designation? What does it mean to you? There were three main reasons that I decided to pursue my CFP®: to broaden my knowledge base in tax and estate planning, to provide myself with a certain level of intellectual stimulation that was lacking in my job at the time and to give me the ability to help a wider range of people. To me, the CFP® designation represents an ongoing commitment to keep current on financial planning topics, which enables me to be in a position to help people make the right financial decisions.

Is there anything that really surprised you about coming to work at Financial Finesse? Why? The thing that surprised me the most about coming to work at Financial Finesse was all of the planners are deeply involved in the company in areas which impact how workplace financial wellness programs are designed and delivered. They are involved in many parts of the business – research, consulting, communications, recruiting and fact-checking. This is a great because the planners all have unique skill sets and experiences that are useful in multiple areas of the company.

 

Do you have a question you’d like answered on the blog? Please email me at [email protected]. You can follow me on the blog by signing up here and on Twitter @cynthiameyer_FF.

 

Hiding Purchases From Your Husband is So 1950

March 29, 2017

When I was a little girl, I remember my great aunt sending my mom money with a note that simply said, “Please don’t send a thank you note. I don’t want my husband to know.” My great uncle was a bit of a curmudgeon and my aunt would have suffered for her generosity. I also remember my grandmother taking me shopping for back-to-school clothes but telling me to leave everything in the car when we went back to her house so my grandpa wouldn’t know she was spending money. Sound familiar?

A lot of us grew up with this example and continue to exhibit similar behavior in our lives today. Have you ever rushed to put purchases away in the closet before your husband could see or stuffed your Lululemon purchases into your purse before walking into the house to avoid a potential fight about overspending on perceived wants versus needs? How about hiding a Target splurge on stuff for your kids?

While these actions may have been slightly justified back in our grandma’s day, these are all examples of financial infidelity. Just like if you were deleting texts between you and a male coworker to avoid a fight with your husband, hiding purchases from him is the same behavior. It’s a violation of trust. What do you really have to hide?

Back then, women didn’t have as many choices when it came to careers and having their own money or even sometimes in choosing a life partner. I will never forget the day I nervously broke the news that my first marriage was ending to my grandmother. Her response surprised me.

She said, “Good for you. You will do just fine. If I’d had a career and options like you, neither one of my marriages would have lasted.” And while I didn’t relish the thought of anyone I love feeling “stuck” with someone else I love, I understood what she meant and she was right. The big difference between back when my grandmother had to sneak spending behind my grandpa’s back and today is that if you find yourself in a marriage where you truly don’t have economic power, you have the choice to work it out or leave.

I’m not saying you shouldn’t have the autonomy to make your own purchasing decisions – quite the opposite. You may never get on the same page with your spouse about the value of spending on certain things like clothes or wine or electronics or name the thing that causes money fights in your marriage. But there are ways to solve that without hiding purchases such as having separate spending accounts where you agree that you each can do whatever you want with that money with no judgment and no arguing. The kicker is that you both have to stick to the agreement where you only spend that money and not other money that’s allocated towards your family’s goals.

It may be a challenge to arrive at an amount you both agree on for your spending money. When a spender marries a saver, the saver will always want to spend less, but there are logical ways to arrive at that number. Start with your shared goals like retirement, paying off debt, saving for college, etc. Assign a number to those goals and calculate what it will take to get there and agree together whether that amount is reasonable or if you need to modify the goal. Getting on the same page about this helps you both feel responsible for your part in achieving that goal and should help the saver partner relax a little bit about spending on things they don’t perceive as necessary.

Kelley Long is a resident financial planner with Financial Finesse, the leading provider of unbiased workplace financial wellness programs in the US. For more posts by Kelley or to sign up to have her weekly post delivered to your inbox each Wednesday, please visit the main blog page and sign up today.

Why and How to Have Weekly Money Talks

March 28, 2017

When I first got married, money talks in my home looked something like this: I brought out my spreadsheet and the four other programs I was working on to have a financial summit with my husband. He mentally tuned out the second he saw the first version of the budget and was in another place (I suspect it was at a college football game) by the time the meeting was over. Over the years, I learned to simplify my budgets and my husband brought both his mind and body to the meeting. My colleague Steve offers great insight into how to make couple money meetings work that I wish I knew from the beginning:

I have a confession to make. For over a decade in my professional career, I was the pot calling the kettle black. Almost 20 years ago, I followed the advice of a fellow CFP® professional and started advising clients to schedule a weekly 30 minute money meeting to focus on their finances, but I wasn’t doing these myself. Then about 7 years ago, I started having those meetings with my spouse and guess what? They work.

The basic idea is this. Many of us can go a month or longer and not spend any time thinking about our investments or whether we are spending our money on what is important to us instead of where we have always spent it. We pay our bills but don’t think about our spending plan.

On a side note, I hate the word “budget.” It sounds like “diet” to me. They both are limiting and negative.

A friend of mine told me “Steve, you’re a financial planner. Don’t think of it as a diet. Think of it as an eating plan.”

That works for me. I don’t think of my spending as a budget. I think of it as a spending plan.

The ideal time to have a conversation about money is not when you’re late for work, trying to get the kids off to school and have a deadline that is consuming all of your mental energy – been there done that. The Weekly 30 Minute Money Meeting can either be with yourself or with your partner. The rules are the same:

1.You cannot change the past. It is a waste of time to argue about or beat yourself up about things that have already happened. Learn from your mistakes (we have all made them) so you don’t repeat them in the future.

2. Be thoughtful and focus on the future. With my eating plan, if I choose to have a 1,500 calorie breakfast (which is delicious), I’d better plan on eating a lot of salad with little dressing for the rest of the day. If I choose to spend my future paychecks now (think credit cards), I’d better plan on not spending any other money.

3. Hold yourself accountable. Notice I didn’t say hold your partner accountable. We are adults and need to hold ourselves accountable. If you make a mistake, own it and try hard not to repeat it.

4. Schedule the meetings when your energy is high. I am an early morning person. I wake up at 5:30 am every day no matter the time zone or if it’s a weekend.

The ideal time for me would be 6:00 to 6:30 on Saturday morning. My wife’s response to this suggestion is not fit for publication. We meet from 11:00 to 11:30.

These are some tricks to make the most out of your meetings:

  • Put them on your calendar and if you think about something, pull your phone out and add a note to this week’s meeting. That way you don’t forget it.
  • Use the meetings to develop a spending plan. Your spending plan needs to get you, not the other way around. Look at your bank’s online tools, other online tools like Mint, our Easy Spending Plan, a custom made Excel spreadsheet or paper and pencil. Try different ones until you find the one that gets you.
  • Find an item in your spending plan that you buy because you have to but don’t enjoy spending money on and see if you can cut that cost.  Think of auto insurance and electricity. Any money you can free up from those is money you can save or use for something you want.
  • Run a retirement estimator calculator and make sure you are on pace to retire. Update this at least once a year.
  • Run a DebtBlaster calculator and make sure you are paying off your debt as efficiently as possible. Update this every 6 months or when you pay something off.
  • Review your investments at least once a quarter and make sure you are taking an appropriate amount of risk.

As someone who has done this for a while, the benefits of these meetings include reduced financial stress, you and your partner having a plan and fostering honest, direct and sincere conversations about money. Start now. Don’t wait a decade…like some people.

 

 

Don’t Lose Your Voice When It Comes to Your Finances

March 14, 2017

My husband loves cars. No, I mean he really, really, really loves cars. Whenever he is driving, our conversations will quickly go from what we are going to eat for lunch to the engine power on the vehicle next to him – often in the same sentence. 

I thought I was all alone, until my colleague, Vekevia, shared with me that her husband loves cars too. As we started talking, I wanted to share her wisdom on how to keep the peace in a household with very different interests, especially when one person manages the household finances. Below are her thoughts:

Some couples manage money together and other couples have one person who primarily manages the money. Usually, in cases where one spouse manages the finances for the family, that individual is more financially savvy or may just be better at handling that responsibility.  That makes sense.

It becomes an issue when either spouse, most likely the one not handling the finances, feels like their financial goals or desires are overlooked or not taken as seriously as the other spouse’s financial goals or desires. This is especially true when you just do not see eye to eye on the value of what either spouse holds dear. I handle the finances in our family and have had to learn to work with my husband so that we both feel heard.

My husband is an avid car lover and I don’t just mean that he enjoys seeing nice cars. No, his passion extends far beyond that. He is fascinated over how a car is designed and built. He cares about the horsepower and enjoys seeing how it performs.

Every year, we go to a well-known racetrack in our area to see other car enthusiasts show off what they’ve built and race each other. As you might suspect, this is not cheap. On average, the cost to build a car like what you would see at this type of event can sit close to six figures and annual maintenance after racing can fall in the five-figure range. Guess what? He wants to build one.

Initially, this was a problem for me because I do not value cars the way he does. I just like when a car is visually appealing, dependable.…and INEXPENSIVE! The good news is that we are compromising and he plans to build a much less expensive car, but the financial planner in me wants to scream. Cars are depreciating assets that lose value rapidly over time.

However, my husband’s passion for cars, as expensive as it may be, holds a value that I can’t technically plug into my calculator and put down on paper. It would mean a lot to him for his dream to become a reality at some point this lifetime.  I value him and his happiness. Life is short and you only live once.

Being financially healthy doesn’t mean denying yourself the things you’re passionate about just because of cost. It’s about fitting your passions into your budget. Sometimes, you may have to find ways to make more money or decrease your expenses. We’ve chosen to fit building a car into our budget, not at the sacrifice of keeping a roof over our head, saving for our son’s college, or being able to retire, but it’s important, so it’s there.

Are you in a similar situation with your spouse? Here are some tips to show your spouse he/she has a voice in your finances:

  • Have an open conversation about your financial passions or dreams.
  • Decide what you value most. (You may have to choose 1 or 2 passions each this go around and take on the others in your next lifetime.)
  • Calculate how much you need to save for other financial priorities like retirement and funding your kid’s education.
  • Estimate the cost of making it all a reality.
  • Determine if your current income can carry the cost.
  • Seek opportunities to increase your income. That might mean pursuing a degree to make a career change, going for a higher paying position, or taking on a second job for extra income.

Realize that the cost of something is important, but so is the way your partner feels when you are willing to acknowledge and support his/her interests. You both should have a voice in your finances and work together to set up a feasible plan to make your dreams become a reality.

 

 

How an Argument on Valentine’s Day Made Our Marriage Stronger

February 14, 2017

When I think of Valentine’s Day, I always think of my first Valentine’s Day after I got married. We were new homeowners undecided as to how to decorate our home. I am a saver and I wanted to bargain shop and slowly decorate. My husband is a spender who was tired of walking around empty rooms and wanted to start buying furniture without looking for a deal (gasp). Our discussion, or rather argument, about how we would buy furniture was the first dose of reality that we had very different thoughts about money.

Now, I am sure some of you are asking yourselves why she is talking about an argument on Valentine’s Day. Trust me. I am going somewhere with this. It was not easy, but after we both stopped pouting, our argument made us realize that in order to have peace, we needed to agree on how we will spend money as a couple so over the next few months we came up with a plan to manage our finances together. The following is how we were able to do it without strangling each other:

1. We had money meetings a few times a month. We had a meeting a few days before the new month began to discuss what expenses were coming up during the month and a shorter meeting before each pay period to make sure nothing changed or was forgotten. The longer we did this, the shorter the meetings became. This went a long way to prevent arguments about last minute unexpected spending.  Consider using a budget worksheet as a tool to map out your spending plan as a couple.

2. We set up communication ground rules for the meeting. First, we agreed to obey the principle my kids learned in kindergarten that if you have nothing nice to say, then say nothing at all. We established the budget meeting as a no nagging, judging, and cursing zone with no sarcastic remarks allowed. We also had to give one compliment about how our spouse managed their money. Work with your partner to come up budget meeting ground rules.

3. I agreed to keep the meeting short and my husband agreed to bring his body and mind to the meeting.  I also agreed to be flexible on the meeting times if important events arise, such as my husband’s favorite team playing. Agree on a meeting date and time where both of you can be mentally as well as physically present.

4. We set up 4 accounts: a joint checking account where both of our paychecks initially went into for the household bills, separate checking accounts where money was transferred from the joint checking account for personal spending that we did not have to consult each other on, and a joint savings account. We agreed on how much each of us would get to spend every pay period. Every couple is different, so discuss the best opton for the both of you.

5. We also came up with spending ground rules. For us, it was that we would not spend anything over $100 from our joint account without discussing the purchase with each other. We also agreed that we would not discuss money spent in our personal accounts. I deliberately mentioned this twice because for some couples, it’s important to have personal money you can spend freely.

So as odd as it sounds, our argument on Valentine’s Day was one of the best things that could have happened to us. It led us to getting on the same page about money, which brought us closer together as a couple. As you celebrate Valentine’s Day, consider using the day to go over ideas on how to help you and your partner manage money better together.

 

How to Have The Money Talk

January 30, 2017

Are you in a serious relationship, thinking about moving in together, engaged or even newly married?  If you are contemplating sharing a household together now or at some point in the future, there’s no better time than the present to discuss your finances.  “Your life partner can be your best financial friend or your worst financial enemy,” according to Financial Finesse CEO and author Liz Davidson.  Marriage is an emotional and spiritual partnership, but it’s also a legal financial relationship.  Money is the leading cause of stress in relationships, but it doesn’t have to be.  The foundation of any successful economic partnership, including living together or marriage, is strong communication with full financial disclosure.

Ground rules

The Money Talk can sometimes bring strong emotions to the surface, so choose a place to have your discussion that will be relaxing and free of distractions to both of you.  Choose a pleasant, neutral location where you have sufficient privacy.  Keep these ground rules in mind:

  • Make sure your discussion is scheduled for a time of day that works for both partners. My husband prefers to talk money and night and I prefer the morning. Over time, we’ve learned over time to bring up financial decisions during breaks in the work day, or on weekend days is best if we’ re going to have the most productive conversations.
  • No alcohol! While a glass of wine could give you courage to disclose your student loan balance, each partner should have their wits about them. It will much easier to listen compassionately without judgment if you are free of cocktails. Feel free to stash a bottle of champagne in the fridge for later to celebrate this milestone in your relationship.
  • Set a beginning and end time for your discussion. If you don’t finish everything, set up a follow up date.
  • Don’t judge. Your partner has a different money story and may have different values and financial priorities than you. Refrain from expressing opinions – think of this conversation as an exercise in  information-gathering.

What to discuss? Make sure that you’ve covered all your bases:

Tell each other your money stories

  • How did your parents handle money? What do you think of how they handled their finances? How did that impact you? If you’ve never thought through your money story, the book The Feel Rich Project, by Michael Kay, CFP® has some helpful chapters on how to assess your history.
  • How would you describe your financial personality? Are you a saver or a spender, or something in between? Do you like to plan carefully, or be more spontaneous? Do you collaborate, or prefer to decide independently? Are you more likely to be meet your own expectations or those of others? Consider using this framework for thinking about how you best create financial habits. If you want to dive deeper into the financial personality question, you can both take an online quiz here or here and compare notes.
  • What’s the biggest financial success you’ve had? What are the factors which contributed to it?
  • What’s the biggest financial failure you’ve had? What are the factors which contributed to it?
  • If you’ve been married or living together before, how did you handle money together? What worked, and what didn’t?

Take inventory – how much to you spend, what do you own and what do you owe?

Now that you’ve reviewed the emotional side of money, it’s time to get practical. Compare notes on your income and expenses:

Income

  • How much do you each make? Do you expect that to increase, decrease or stay the same in the short term?
  • Do you have other sources of income, such as rental property, business investments or trust income?

Expenses

  • How much and what are your “must pay” expenses every month – housing, transportation, insurance, child support, tuition, etc.
  • Do you track your expenses? What system do you use?

Assets

  • How much are you saving for retirement as a percentage of your income? How much have you saved so far in retirement accounts, such as 401(k) or 403(b), Roth and traditional IRAs?
  • If you own your home, what’s it worth approximately?
  • Do you have an emergency fund? How much do you have in cash reserves?
  • What other investments do you have?
  • Do you co-own any of your assets with someone else?

Debt

  • What is your mortgage balance, rate and remaining years to pay, if you have one?
  • How many credit cards do you have? Do any of them carry balances that don’t get paid off in full each month? How much?
  • Do you have outstanding student loans? Are they private or federal loans? Are you current on paying them?  Are you in a loan deferral or forbearance period?
  • If you have non-mortgage debt, do you have a plan for paying it off? By when?

Insurance

Financial wellness means that you are prepared for unexpected and expensive events, such as a major illness or car accident.

  • Do you have health insurance? What kind of health care benefits are available to you at work?
  • Do you have short and/or long term disability income insurance?
  • Discuss your auto insurance. Do you have the bare minimum coverage, or are more fully protected?

Show each other your credit reports

Now comes the hard part. Show each other your credit reports. For many couples, this is the most difficult part of the conversation. Remember, regardless of your credit history, transparency here is an act of love. If you are thinking about spending your lives together you’ll have an economic and financial partnership, not just a romantic one. Full disclosure is essential, especially for engaged and married couples, who will generally be held legally responsible for debts their spouse occurs during the marriage.

  • Access your free credit reports from the three major credit bureaus at annualcreditreport.com or share your report from any online credit monitoring service you use, such as Credit Karma or Credit Sesame.
  • Review and discuss any major items, such as bankruptcy, short sales, and a history of significant late payments or charged off accounts. Do you see evidence that your partner has good financial habits, or is working to develop them after a financial mishap?
  • If one partner has significantly better credit than the other, how will this impact how you manage money together?

What are your financial priorities and long term goals?

Once you’ve tackled the rough part of the conversation, you can head to the fun part!  A successful marriage begins with a shared vision. Ask each other:

  • If everything worked out exactly the way you wanted it to financially for us, what would that look like?
  • Where do you see us living now? In five years? In retirement?
  • If we plan to have children, do you think one of us should take a career break to raise them? For how long?
  • When would you like to be financially independent enough to have the option to retire?
  • Can you define “financial independence” for me?
  • What would happen if one of us got sick or laid off? How do you think we should handle it?
  • If one of you has children from a previous relationship, how do you plan to handle the costs of raising them, including sending them to college? See Financial Planning Tips for New Stepparents for ideas.
  • If one of you has significant debt, such as credit card balances or student loans, what is your target time to have them paid off completely?

Not a one-time event

Congratulations on getting through your first “Money Talk!” We hope this will be the first of many ongoing conversations about your joint finances. Marriage can teach you a lot about money.  Now that you’ve established a foundation of transparency, full disclosure and sharing your visions, set up regular “money meetings” to talk through ongoing financial business.  You’ll have a better personal – and financial – relationship for doing that.

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.

Sometimes It Does Take a Rocket Scientist

October 03, 2016

Portia Jackson believes that people should be able to design their finances around their lives and not their lives around their finances. A business strategy coach and former rocket scientist who is studying financial planning, Portia joined our team this year for a long term financial planning internship. I recently had a fascinating conversation with her about her world view and why she is pursuing her CFP® designation. The future for this mother and financial wellness evangelist looks bright!

Why did you become a personal coach? What influenced your decision to pursue the CFP® designation? How do you see combining those two paths?

I became a business strategy coach after many of my original podcast listeners (I used to host a podcast for working moms, Working Motherhood) kept emailing me and asking me how I was able to run a business, work full-time and manage my family, including a daughter with special needs. I loved my podcast and it gave me fulfillment, but as I started working with the members of the Working Motherhood, I realized I LOVED coaching so much more! I get to help people see an immediate difference in their lives? Yes, please!

I decided to pursue the CFP® designation after teaching a workshop course on tackling debt for many years. I loved the impact I was making on people’s lives and seeing the weight lifted off their shoulders after they realized they wouldn’t be in debt forever made my heart sing. I wanted that feeling all day every day so I decided to change careers and become a financial planner. I also wanted to do it right so I knew I had to be a CFP® professional. The two paths easily combine because I believe the combination of a solid financial plan (i.e. 6 months emergency fund, zero debt, fully-funded retirement and college plans, home ownership, estate plan, tax minimization and proper insurance coverage) with working at something you love to do is a complete path to financial wellness.

How does your background as an engineer influence your financial planning and personal coaching style?

My engineering background helps me as a financial planner and coach because I’m very data-driven. I work off of action, not just “what could happen.” If something isn’t working, I can course-correct. Planning a launch of a billion-dollar rocket and launching someone’s business or retirement plan are both very important so I use my strategic background to reduce some of the uncertainty that can surround those areas.

What’s your personal mission? Who do you most want to help?

My personal mission is to free people from financial stress and bondage so they can then pursue their personal mission in life. I feel that many times the amount of energy people put into worrying about money (even if they are doing everything “right”) can be put toward their personal calling in life. I believe everyone has a specific purpose in life and that purpose often goes unfulfilled because they are stuck in a job they dislike just to pay the bills and then they are too exhausted to do anything else or sometimes people are doing everything right and still can’t afford a decent lifestyle.

They aren’t trying to keep up with the Joneses. They just want to be able to own a home, have insurance, travel maybe 1-2 times a year and send their kids to college. In an expensive place like Los Angeles, that can easily add up to a lot.

What is the biggest mistake you ever made with your money, and what did you learn from it?

The biggest mistake I’ve ever made with money was buying a rental property at the age of 23 in a bad neighborhood with no money down in 2005 in Chicago right before I moved to Los Angeles for grad school. I really don’t know what I was thinking when that happened. Actually, I do. I was focused only on the POTENTIAL cash flow. Those late night real estate ads were apparently very convincing to me.

The property was a big pain the butt. It sucked up all of the money I won from a game show I was on and commercials I booked while I worked in Los Angeles. It also caused a LOT of stress for me during what should have been one of the most exciting times in my life.

What have you learned about money and marriage that you can teach the rest of us?

I’ve learned that communication is key and that understanding each other’s personality types is really important when it comes to family finances. My husband and I have monthly financial meetings, where we review our budget, our net worth statement, our financial goals and the financial mission statement we’ve written for our family. I’m the CFO of our family and while I can typically recite the budget down to the penny, he is the bigger visionary and wants to see where we are going.

When you got married and had children, did you feel prepared to deal with the financial aspects of partnership and parenthood? What do you wish you had known in advance?

We felt pretty prepared going into marriage because financial planning was part of the two pre-marital classes we took. (We like to be thorough, haha.) When our kids came (very soon actually, we had a honeymoon baby) it wasn’t too much of a disruption to our budget, although the budget for sending kids to daycare could feed a small country for a while.

How do you teach your kids about money?

Our kids are just 4 and 2 right now so we haven’t really had the money discussion yet, but we plan to use the envelope method that I used growing up — one envelope for giving, one for saving and one for spending. They will earn money through chores as they will not receive an allowance. As parents, we believe that we are to be mentors to our kids and train them for the real world and in the real world, there are very few handouts.

Is there anything that really surprised you about coming to intern at Financial Finesse?  Why?

Yes, I was surprised that workplace financial wellness as a type of  business actually existed. When I was searching for a place to complete my required experience hours for the CFP® designation, I came across many opportunities to sell products or gather assets, but I never heard anyone lead with the benefit of changing lives and offering unbiased financial guidance with no ulterior motive or sales pitch, which is what we do at Financial Finesse. The passion that everyone has here for helping people and for extending this vision to more people is truly amazing and a rare jewel in the financial services industry. Unlike in my brief wire house days of seeing people get excited to close a sale, people at Financial Finesse are excited about a great Financial Helpline call or one-on-one planning session.

Do you have a question you’d like answered on the blog? Please email me at [email protected]. You can also follow me on the blog by signing up here, and on Twitter at @cynthiameyer_FF.

 

 

Financial Planning Tips for New Stepparents

August 01, 2016

Do you have stepchildren?  If so, you’re not alone. According to the Pew Research Trust, more than four in ten Americans have at least one step-relative in their family.

Recently several of my fellow planners and I who are stepparents were talking about financial planning and step-families. One thing was clear: we love our stepchildren and can’t imagine life without them! We also agreed that getting married to someone who has children from a previous marriage requires a certain money mind shift. What should stepparents expect? How can new partners set themselves up for a harmonious and prosperous financial relationship?

Full Financial Disclosure

A Money magazine poll found 80% of married couples with children under 18 argue about money. Take this very seriously. Frequent arguments about money are a top predictor of divorce.

This can get even more complicated when there are factors such as child support, alimony, or divorce-related credit issues that accompany one or both spouses into remarriage. Accept upfront that this will add a level of complexity to the financial side of your relationship. Set some parameters during your engagement for how you will communicate about money and make financial decisions.

One of the best ways to head off financial discord is for each partner to lay all their financial cards on the table before tying the knot. Have a “full financial disclosure policy” in your relationship, which includes sharing and discussing what you own, what you owe, your credit reports, any ongoing financial obligations and any pending legal or financial problems – before you get married. To minimize conflict, fellow planner Kelley Long suggests couples set up a money meeting to explore each other’s beliefs and attitudes about money and how you’ll communicate about them when you disagree.

Managing Combined Cash Flow

Discuss in advance how you’ll pay for ongoing living expenses. An easy way to handle this is the “yours, mine and ours” method of budgeting. Make a spending plan for all your anticipated joint expenses such as housing, transportation, insurance, food, vacations, etc.

Decide how much each spouse will contribute from their income, net of retirement savings, to a joint account to cover joint expenditures. You keep what’s leftover in your individual accounts to handle as desired. If there are big disparities in income, consider having each spouse contribute proportionate to their income.  .

They’re Your Kids Now Too

If only one spouse has obligations from a previous marriage, this can be a trouble spot, so work out in advance whether you agree that child support, tuition and other kid-related expenses are part of your couple budget or the biological parent’s individual budget. I favor the first approach. In my relationship, we’ve always agreed that all child-related expenses for all the children are part of our joint budget and we discuss them like any other financial decision.

Fellow planner and stepparent Tania Brown agrees. “When you marry, it’s not his or her child’s expenses. It’s both of your expenses. Although blended you are one family.”

“Consider each child in your household, regardless of who the actual parent is, as YOUR CHILD,” counsels fellow planner Paul Wannemacher. “Do all you can to treat each child equally as possible and love them as your own. Financial considerations should never, ever be the determining factor affecting that love and commitment.”

Create a New Financial Plan

Going through the financial planning process together will help you and your new spouse reach consensus on your goals and how you will work to achieve them. The financial planning process allows you to identify financial priorities such as saving for retirement, buying a new home, paying for college or helping an aging parent, as well as steps you can take to get there. Retirement and college goals often look very different after going through divorce and remarriage. A CERTIFIED FINANCIAL PLANNER™ professional can broach difficult topics, facilitate discussions and help you reach agreement on a unified vision for your financial health as a blended family.

Redo Your Estate Plan

Our director of planner operations, Linda Robertson, encourages new stepparents to update their estate plans. New spouses should update wills, beneficiaries and trusts as many concerns can be addressed through good estate planning. She proposed that couples in good health consider life insurance to even out estate planning needs between children. “A spouse who is the joint owner or primary beneficiary on most of the marital assets could set their partner up with a decent life insurance policy that is split between his/her children so they don’t feel as if the stepparent is taking everything if their parent passes away first” said Robertson. Stepparents could also consider adding stepchildren as the contingent beneficiaries on their retirement accounts.

Keep Separate Assets Separate

Whether or not you have a pre-nuptial agreement, consider keeping assets you each acquired before your marriage in separate accounts. This is particularly important where there is divorce-related conflict with an ex-spouse. For the stepparent, this helps safeguard your separate property from inadvertent loss in case of a legal dispute arising from your partner’s previous divorce

How about you? Do you have any other financial planning tips for stepparents? Please share them via email at [email protected] or tweet me @cynthiameyer_FF.

 

Meet Our Newest Planner: Cyrus Purnell

July 25, 2016

Cyrus Purnell, CFP® is driven to take the mystery out of why some people thrive financially and others don’t. Recently, I had the privilege of sitting down with our newest planner. We discussed his money story and how this Gen X father aligns his personal mission to help others get the information they need to make better financial decisions with his work at Financial Finesse and his role as a husband and father.

Why did you want to earn your CERTIFIED FINANCIAL PLANNER™ designation? What does it mean to you?

I earned my CFP® designation because my primary reason for joining this industry was to help families plan for their futures. When my mom would pick me up from school, she would have the radio on Larry Burkett’s radio show “How to Manage Your Money.” After listening to him help people work their way through financial situations day after day, I thought to myself, “I would like to do that.” Looking back on it today, I was struck by how effectively a short conversation can help relieve someone of stress and set them on a positive road.

What’s your money story – what your parents taught you about money, etc.? Did you hold any negative beliefs about money that you had to overcome?

In hindsight, my parents had a very well balanced view on money. They had very consistent positive money habits when it came to paying bills on time and maintaining low debt levels. They definitely lived within their means, but they would occasionally splurge on things like vacations for the family.

Growing up, I felt like they said “no” to everything, but as an adult, I realize they were very balanced in their yes’s and no’s, and that balance allowed me to walk away from undergrad with zero student loan debt. My perception of being deprived of certain luxuries growing up has always given me a slant toward spending on one event or item and then doing a 180 and spending nothing for a while to make up the difference. It took time for me to learn to plan for those special items and live in balance.

What is the biggest mistake you ever made with your money, and what did you learn from it?

When I started out on my own after college, I picked up what I call “pet debt.” I seemed to carry around some credit card debt and never really took the initiative to completely pay it off. My wife had a similar level of debt when we married, and while were very aggressive on paying off student loans and car loans, we still kept our “pet debt.”

After the birth of our first child, we took a hard look at what the debt was costing us in interest. We got on the same page and attacked the debt and paid it off aggressively. This allowed me to get my MBA without picking up new debt, and my wife was able to start her own business.

What have you learned about money and marriage that you can teach the rest of us?

You can accomplish a lot more working together than you ever could individually. Anytime my wife and I had individual agendas, it always produced tepid results. When we work together on something, we would have better-than-anticipated results.

I know how to run an amortization schedule and how quickly something can be paid down. When we work together, it was faster than any pay-down plan. We would have the wind at our backs.

How do you teach your kids about money?

While my kids are still young, we have felt it was important to begin conversations with them on the value of money and saving. We’ve wanted them to be very involved in the savings process, going to the bank and opening their own savings accounts. Now with any Christmas or birthday monetary gifts they receive, we have the conversation on what we will give, spend and save. My 8-year old is now earning money with doing extra chores around the house. I have been impressed that while he has enough in savings to get the toy he wants, he’s yet to ask for it but has a plan to continue saving $5/week.

If you could wave a magic wand and reform the financial services industry, what would you do?

I would shift cost from the products to the advice. I think there are many very intelligent and ethical people in the financial industry, but they are trapped by the fact that so much of the industry is product-focused and not solution-focused.

Tell me about your personal investment philosophy?

My study and experience with investments has shown that almost all investment return is based on asset allocation. The biggest obstacle to realizing the return from that allocation is fees. In my personal portfolios, I endeavor to build allocations well suited to my time horizon with an eye to keeping fees low.

Is there anything that really surprised you about coming to work at Financial Finesse? Why?

I did a fair amount of research before joining the company so there haven’t been many surprises. I will say the company is exactly what it says it is. Most companies tend to over-hype the strength of their culture and their dedication to mission. It is not hype here. All of that is real.

Have a question you’d like answered on the blog? Please email me at cynthia.meyer@financialfinesse. You can also follow me on Twitter at @cynthiameyer_FF

How Do You Make Financial Decisions?

March 04, 2016

For the last week, I’ve read a lot about Apple vs. the U.S. government regarding the request of the government that Apple build a back door into the phone of one of the San Bernadino killers. The case is very controversial and I understand why both sides feel so strongly. The government wants to break into the phone to see if there is evidence that can help understand and track down anyone who might have helped the killers. Apple is concerned that an important part of their products, a strong encryption that makes them very secure, could be no longer a strength if the encryption code they would write gets into the hands of the wrong people. Both sides have strong arguments, and I will keep my opinions out of this.  Continue reading “How Do You Make Financial Decisions?”

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””

4 Things An Actuary Can Teach Us About Money

February 08, 2016

In a post last week about how choosing the right life partner can be the most financially wise choice you ever make, I wrote about how my husband Steve is my financial inspiration. He truly is a “financial hero,” who’s made wise choices about money his entire life. I am continually impressed by his natural talents as a money manager. I came to my financial beliefs and behaviors the hard way, learning from missteps I made in my 20’s…not Steve. He was born this way – a sensible, long term, evidence-based investor.  Continue reading “4 Things An Actuary Can Teach Us About Money”

Fix These Expenses Before They’re Fixed For You

January 28, 2016

Last week, I wrote about the importance of reducing so-called “fixed” expenses and not just discretionary ones like that morning coffee at Starbucks.The important thing is to reduce them before they become fixed. Here are some of the key decision points in which you can make that happen: Continue reading “Fix These Expenses Before They’re Fixed For You”

From Single to Married With a Baby

December 15, 2015

My friends often laugh at how quickly my life changed within about 18 months. I was happily single with plans to be a working woman with no husband and no kids. A friend of mine told me that I needed a life and suggested I check out a dating website. I said “never” but was intrigued… Continue reading “From Single to Married With a Baby”

You Better Contact A Financial Advisor If…

November 03, 2015

As a former financial advisor turned financial educator, I enjoyed my relationships with my former clients. I watched my former clients go from single, to married, to having kids and unfortunately in some cases, to divorced. I have cried with them over divorces, job losses, and deaths of a spouse or parent and cheered with them at the announcement of a child, a promotion or the start of a new business. The earlier a client told me about their situation, the easier it was for me to strategize the most cost-effective way for them to transition into their new situation. In many cases, I would find out after the fact. Continue reading “You Better Contact A Financial Advisor If…”

The 8 Step DIY Financial Plan for Newlyweds

September 16, 2015

 

As newlyweds, my husband and I are just getting started on our money journey. To get and stay on the same page, we have a bi-weekly money meeting where we dig into our finances, which saves us from money fights and also keeps us accountable to completing tasks needed to get us to our goals. One thing we’re working on is creating our family financial plan to make sure we are fully aligned on money going forward, using these 8 steps. Even if you’re not a newlywed, you can follow these steps to get a plan in place for your family. Continue reading “The 8 Step DIY Financial Plan for Newlyweds”

A Big Day And A Bigger Check?

July 17, 2015

Many moons ago, I remember going from catering company to catering company doing tastings for my wedding. Then there were the conversations with florists, musicians, photographers, venues, etc…it’s all a blur now. Because it was a long time ago and because I was trying to be frugal, the wedding came in well below the average cost of a wedding. I believe that all in, the cost was around $10,000 for everything. Sadly, the divorce 17 years later cost WAY more than that!!! Continue reading “A Big Day And A Bigger Check?”

Protecting Your Dream

June 30, 2015

Years ago, I had a wonderful friend who grew up like me as an “apartment kid” in New York City. This fueled her desire as an adult to own her own home. With a lot of work and relocating to an area where the home prices aren’t ridiculous, she was able to live out her dream of home ownership. Like many of us, she got the homeowner’s policy she was given and never questioned the policy or asked questions. Continue reading “Protecting Your Dream”