Jill Russo Foster

Tips for Successful Personal Finances

You are here: Home / Archives for Jill Russo Foster

Happy Holidays!

 

Happy Holidays to All

Wishing you a healthy, happy and prosperous 2022!

Our 2021 Finances

2021 with the pandemic had us take a look at our finances in relationship to our goals.  As we near, retirement, we have put a plan together. 

This year we refinanced our mortgage. We had a 1-year ARM based on Treasury bill index, so it was time to get a low-rate fixed rate mortgage.  We didn’t want to refinance for 30 years, so we chose a 15-year fixed mortgage that we plan to payoff in 10 years.

We had several credit cards that we didn’t use often and always paid in full when we used them.  We made the decision to close these credit cards. Yes, it will lower our available credit line, but that isn’t a concern for us at this point.

We have maxed out our contributions to our retirement accounts and health savings account.

All in all, we have accomplished out financial goals for 2021.  How about you?

Is That Charity Worth of Your Donation?

This year has been challenging, with wildfires, hurricanes and flooding. We all want to help and these people need our help. but you want to give your money where it will do the best and not go to scammers. If you choose to give, and I’m sure you do, make sure your money goes to those in need (not to scammers) through a charity that you have researched.

This is also the time of year when you are receiving mail / calls from many charities who are asking for donations in this holiday season.  Check them out before you make the decision to give.

Fundraisers can legally keep most of the money donated to the cause. Not to mention the scammers who are out there to take your money. Before you donate, find out whether the charity is legitimate and what percentage of donation actually go to the cause.

You can start your research at Give or Charity Navigator. These organizations research charitable organizations to find out how they use the funds they receive – how much actually goes to the cause versus other expenses.

Here are some tips to help in your research:

  • Find out if the charitable organization has a 501(c) status (IRS code for non-profit organizations).  Non-profits have stricter requirements, and your donation may be deductible on your tax return.
  • Find about how much of each dollar is being used for the cause versus administration costs and other expenses. The more expenses, the less of each dollar is being used for the cause. Look for the lowest administrative costs.
  • For cash donations, request a receipt to use as documentation on your tax returns. All donations over $500 will require additional documentation, so speak with your tax preparer ahead of time.
  • When donating non-cash items such as food, clothing, furniture, automobiles etc, you will need an itemized list of the items you donated and the total value. Most charities will ask you to value your own items.
  • Check with your tax preparer for specific details for your situation and make sure you get a receipt for your donations with the charity’s information on it.

Do your research and chose the organization(s) wisely.  This is a great way to help out others who are less fortunate than you during this season of giving.

Are You Losing Money?

Many companies offer their employees free matching funds for their retirement.  According to CNBC, 17.5 million Americans leave this free retirement money on the table.  Is this you? 

401K retirement account contributions are pre-tax, therefore lowering your taxable income.  CNBC says that 17% of employees don’t contribute.  Why not? Many people say they don’t have the funds to contribute to their retirement.  Among those that do contribute, 12% don’t get the full matching funds.

When I worked at Norwalk Community College, one of the first things I did was read the entire employee manual.  Yes, it was long, but it had valuable information that I could take advantage of.  I chose the alternate retirement plan.  For me that meant, I would have to contribute 5% of my gross income to receive the matching funds.  As soon as I was eligible, I enrolled.  In this particular plan, I was given 8% matching funds.  Why wouldn’t I do this?  For me, this was a no brainer.  I have always accepted free money.

If you have accepted your free money, congratulate yourself.  If not, enroll today (or as soon as you are eligible).  You don’t want to pass up free money.

Planning Your Holiday Season

Getting your finances ready for the upcoming holiday season.  With two months left to the year and all the news reports to shop now, what can you do?

First let’s start with your list.  Who are you planning on making purchases for?  

Next, let’s take a look at your budget.  How much do you have saved?  How much can you afford to spend?  Remember that the season typically includes more than gifts.  You may have opportunities to attend gatherings, participate in events, and more.  Don’t forget to include this in your budget too.

How is it looking?  Are you all set and ready to shop?  Or do you need to tweak your plan?

Some of the things we have done to reduce our spending is to cut back on gift giving, give one family gift as opposed to individual gifts and have get togethers instead of gifts.  Take your list and think outside the box for what is right for you.

This is not the time to open a new credit card account, because you can get a discount.  This is will lower your credit score with a new inquiry and new credit line.  Probably not in your best interest.  Plus, you don’t want to start off 2022 with holiday debt added to your budget.

Make a plan and decide what is right for you and enjoy the holidays.

Have You Refinanced Your Mortgage?

Refinancing a mortgage is a big decision involving lots of questions that you need to think about.                                                                  

  • How long do you plan on staying in the home?
  • Why do you want to refinance?
  • Do you just want a lower rate and/or shorter term?
  • Do you want to take out cash to do something (home improvements, pay for kid’s college, etc.)?

These are some of the questions you need to think about to determine if refinancing is right for you.

For those of you that don’t remember, I was in the mortgage business for 10+ years.  Well, lots has changed since I left the industry.  So, we decided to refinance to a shorter term and a fixed rate.  We had a 1-year adjustable rate with a Treasury bill index (a stable index) for the long term – they don’t offer that index anymore.  We were dead set against getting a LIBOR index adjustable, as that index will be going away.  For us, it had to be a shorter term and lower rate.  Well, now was the time!

After answering all the above questions and more, we refinanced and shortened our term to 15 years with a fixed rate of 2.375%.  The process was long, as the industry is overwhelmed.  For us, we started the mortgage application process though closing took us 101 days.  You’ll need your patience and to be organized with all your documents available.  Much longer than I remember.

All in all this worked for us and it can for you too, with some patience.

 

Which Budgeting App Is Right For You?

Ever wonder what budgeting app is best for you and your family?  Not sure where to start?   I am asked this all the time and I don’t have a recommendation for you.  I still use a manual method and am happy with that for us.

For those of you that do want to use an app, how do you make the right choice?  Here is a great article from The Hartford comparing several apps to help you make the right choice.

Let me know what one you use and why.  I would love to hear from you.

Back To Travel

You know we love to travel.  When the pandemic hit, we were home and there was not much travel out of the area.  We were left with lots of credits to use, so we are back on the road again.  We just returned from a summer trip to the west coast.  First time back on a plane in 18 months (might be a record for us).

We did a lot a planning and as some places we wanted to go and see still had reduced capacity, COVID 19 and wildfire restrictions is place.

This is what we experienced going to Lake Tahoe, Yosemite National Park and Fly Geyser at Black Rock –

Airport / Flying – Lots of flight cancellations and changes made flying challenging.  Our outbound flight was cancelled, and we were rescheduled on four different flights within a 24-hour period.

Hotel / Timeshare – That went smoothly.  From check in to check out, all went well.  We found that the cleaning procedures were great.

Rental Car – Prices are rising as inventory is limited.  Thank goodness, we reserved months in advance.  They didn’t have the size car we booked months in advance, so we were given an upgrade for no additional cost.

Tours – We took one tour that we booked months ago and there was plenty of hand sanitizer. We were a little disappointed about others on the tour not wearing masks in the bus, but we had ours on.

We packed lots of wipes to clean to do our own cleaning.  We packed lots of hand sanitizer and used it frequently.  It was no problem taking a small bottle through TSA.

It felt great to get away again.

Finances In The Future

Last time we spoke about couples merging finances together.  I have witnessed many couples who keep their finances separate.  While I am not opposed to this, it can create problems down the road.

I have a friend currently who is trying to piece together her deceased spouses finances.  It’s unfortunate, he passed away unexpected and suddenly.  Their finances were totally separate.  Now she is having to search for where his bank accounts are, where his life insurance is and so much more.  Yes, they were fortunate to have the legal paperwork in place – will, estate plan etc.  but there are issues with the legal paperwork too.  It more complicated for the surviving spouse as they are not only mourning their loss, they have to deal with the financial fallout.

When my mother passed away, my father was lost because he didn’t handle the finances.  My mom was a bookkeeper and she handled all the bank accounts and bill paying.  He never paid a bill in his life up to this point.  He actually made piles on the dining room table of bills.  Then the calls started to come in that the bills were past due.  He assumed that things were automatic but they weren’t.  The story of a spouse in the dark.

Make sure the surviving partner / spouse is aware of your financial situation and has access to the accounts.  They should know how to access the bank / investment accounts.  They should know where your life insurance policy is.  They should know how to access your passwords.  Take the time to have this discussion before it’s too late and have a plan in place.

 

 

 

Married Finances: Should Two Become One?

Weddings are an emotional celebration. We love the idea of a bride and groom starting a new life together. We use words like “two becoming one” or “sharing your lives as one,” meaning that everything will be shared as though the couple are no longer individuals. I believe this puts a lot of unnecessary sentimental pressure on a couple to share all their finances even though it’s not always necessary, or even wise, to do so for every single account or property.

So, how do you merge two separate financial lives?  There are many successful ways to do this.  Some couples keep their individual incomes and expenses separate by having separate bank accounts, credit cards etc. Then, they have a joint expense account for their household bills that they each put money into. Sharing the joint account can be as simple as having each person responsible for different bills, or figuring out the bill totals and having each put in their half. Some people base the joint account total on a salary percentage (this works great when one spouse earns more money that the other). And, of course, some people merge everything and all accounts are joint.

You need to think about what type of financial people you are.  Here are 3 questions to think about that will help you decide (and could possibly save some financial squabbles):

  1. Are you a saver and your spouse a spender?  Having one person be the fall back for financial emergencies can be challenging financially and to the marriage.
  2. Are you both spenders? What will happen when there are no reserves for emergencies?
  3. How do you each handle bill payment? Are all your bills paid on time?  Do you have bills that have slipped through the cracks?

Answers to these questions can be tricky, but worth the discomfort.  Proactive thought can be a financial life saver for your future.  Double check your answers by looking at your account statements and credit reports. You may not be as good at finances as you think you are, or you might be better than you thought. Discuss your habits with each other, as well as any outstanding issues that could affect you both.

I am a firm believer that you both should participle in your finances. You have joint goals in your future, so you should do the financial planning for this together as well. Don’t let the responsibility fall to one person.  If something were to happen to the “responsible” one, then the other party would be left completely in the dark, not knowing anything about the accounts or how to deal with them. I have seen many situations like this. It may seem kind, or convenient, to handle the money if your partner doesn’t know how, but it’s not.

Whichever way you choose to handle your finances as a married couple, make sure it’s a mutual decision based on real knowledge of your habits and goals.