Jill Russo Foster

Tips for Successful Personal Finances

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Planning Your Holiday Season

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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.

Which Budgeting App Is Right For You?

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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.

Finances In The Future

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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?

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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.

Money Lies

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What have you been telling yourself?  What lies do you currently believe?  How have they affected your financial choices and behaviors?

Are you interested in making changes? Remember it’s never too late to make changes.

Here are some of the lies I hear:

  • There is no extra money to save for retirement.
  • I’ll start to save tomorrow when I earn more money.
  • I deserve this now, even if I can’t afford it.
  • I bought this at a good price / discount.
  • I am young and don’t need insurance.
  • I got approved for a new account, so my credit can’t be bad.
  • I can spend now because I will have social security for retirement.
  • I’m not planning on buying a home, so it doesn’t matter what my credit score is.

Do these money lies sound familiar?  There all lies that will affect your financial future, but it’s not to late to make changes.

You may be saying, there isn’t extra money to save.  You must make savings a goal and pay yourself first.  Taking any amount to save regularly is the start.  Set up automatic transfers on payday to begin the automated pay yourself first process and you will see your savings build up over time.

I am at a point in my life where I am getting rid of items and living with less.  How much money did I spend on these items that I thought I needed only to find them sitting unused on a shelf? How much clutter do you have?

Insurance is important to have.  If you have a health issue, it may not be too late to get health insurance.  We had a family member who didn’t have insurance and was diagnosed with cancer.  When he needed insurance the most, he didn’t have it, nor was he able to pay the premium because he couldn’t work.

Social Security wasn’t intended to be your sole source of income.  It was designed as a supplement to your pension/ other income.  Look at your social security account and see what your projected amount is.  Can you live off that?

Credit effects so much of your financial life.  Do you own a car?  Maybe you want to change jobs.  Do you want to rent an apartment? All this depends on your credit report and score.

Beliefs can be changed to achieve what you want with your finances.  It just takes a little effort and some change to get going. What can you tell yourself to change your beliefs for the better?

Do You Want To Find Hidden Money?

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Yes, please – don’t we all.  I can remember as a kid finding a $5.00 bill on the floor of Radio City Music Hall and I was thrilled. That’s not what we are talking about today.

How can you find hidden funds in your budget?  Here are some of the ways that we have reduced or eliminated expenses to find money without any struggle:

  • Do you have subscriptions and/or memberships that you don’t use?  Cancelling those things and put more money in your pocket.
  • Shop with a plan.  We make a list of meals for the week and then look at what we have in the house then make the grocery list for shopping.  Without it, we would be making duplicate purchases and spending more money at the store.
  • Do emails make you shop?  Unsubscribe from temptation.  If you didn’t need the item before you opened the email, you probably don’t need to spend money on the item.  If you can’t unsubscribe, then consider having those emails come to a different email that you only check when you need an item.  Don’t be tempted to shop because of an email sale or daily deal.
  • Are you paying bank fees?  Stop! We have several bank accounts and don’t pay and monthly fees for any of our accounts.  Find out what you need to do to avoid the fees associated with your account.
  • You’ve heard this before, bring your beverage, lunch and snacks with you from home.  A coffee for $3.00, a snack for $2.00 and lunch for $10.00 is $15.00 a day or $75.00 a week and $3,750 a year.  What else could you do with that savings?
  • Use your rewards points / rewards for items.  We have a credit card without an annual fee, that gives us points for using.  When it comes to our holiday shopping, we are able to use point for gift cards and this reduces our holiday shopping budget.
  • Do you know your discounts and use them?  What benefits does your company offer it’s employees?  Take advantage of these savings opportunities.  We get a discount on our monthly cell phone bills just for showing a paystub once a year.  Our bank debit card offers us savings offers.  We review the website and when we make the purchase then a percentage of the sale is deposited back to our checking account.

For more savings tips, pick up a copy of my books 111 Ways To Save.

Things To Do Before You Retire

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Whether you are just starting out or nearing retirement, there are things you can do now to make retirement easier for you.  You don’t want to retire and not have the money to do what you want.  Here are some things you should think about:

  • Do you have enough in your emergency fund? This past year many people were laid off, furloughed and/or unemployed.  An emergency fund helped many get by.  These funds will help you with an unexpected need for funds i.e. fridge dies and needs to be replaced, your car breaks down and you need to rent a replacement car, etc.  Life happens whether or not you have the funds.  Create or increase your emergency fund to cover 6 to 12 months of your expenses.
  • Have you maxed out your retirement contributions? You may want to fund your retirement accounts both through your employer (401K, 403B, 457, etc.) and your personal (IRA and Roth) accounts.  You can never have too much money for retirement.
  • Is your budget balanced? One of the biggest mistakes you can make is to have more expenses than income.  If this is the case, you will be accumulating debt and therefore not savings money.  Eventually, this could snowball and you will be a slave to your debt.   Make changes now to live within your means.
  • Is your debt paid off in full? Just like living within your means, having your debt paid off in full is important.  When you retire, you will be living on less income.  Having debt paid off will help you living within your means.  Make a plan to have your debt paid off.

According to AARP, more than half of the full-time workers age 50 years and above will lose their job involuntarily.  Keep track of your finances, live below your means and be prepared for whatever comes your way.

Save The Date

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It is finally happening – I’m am back teaching in person starting the fall!

For starters, here are the two classes I will be teaching at Norwalk Community College:

Teens and Money: Teen Personal Finance Grades 8 to 12 – Saturday, October 2 – 9:30 to 11:30 AM

Personal Finance 101 – Tuesday, October 5 – 6:00 to 8:00 PM

Please save the date and tell your friends.  Registration details to come shortly.

In the meantime, my books are available for purchase and can make a great graduation gift.

Spring is here!

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I can’t believe how fast this year is going!  Here in Connecticut, we had lots of snow over 25” in February alone (that’s a lot considering last year, we had one storm with about 3” for the entire winter).  March has been a roller coasterspring cleaning, we’ve had some warm days and some bitter cold days.  But spring is coming!

With spring, it makes me think of two things – cleaning and planning projects.  Cleaning is just a deeper cleaning – moving furniture to clean behind, washing windows, etc.  As for the planning projects, that’s more complicated.  As a homeowner, there is the annual maintenance you have do to – clean the yard, gutters and see what winter has done to your home that needs fixing.  For us, we take on a project or two each year.  Last year, was replacing the backyard fencing.  The year before, was replacing the roof.  Doing things proactively is easier for us and helps with the budget too.  What will this year’s project be?  We are still deciding.

What does spring mean to you?

Goodbye 2020, hello 2021!

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2020 was a year for the record books. This past year has brought many issues for many people, from job losses, reduced wages, not to mention healthcare issues.  If this past year didn’t convince you that you need an emergency fund, I am not sure what will.

For us personally, we have had job furloughs and reduced hours – therefore less income.  Luckily, we have an emergency savings to help us out.  In addition, we took on part time weekend jobs for additional income.  What about you, how are you surviving?

Our goal for 2021 is to get our finances back on track – replenishing our emergency savings and eliminating debt.  Fortunately, we are back at work and earning income (and we have kept the additional part time work).  So here is our plan:

  • We continue to automatically save a portion of each paycheck.
  • We have made a plan to pay down some debt we accumulated.

Notice that we are doing both at the same time.  Personally, I don’t believe that all your money should go to paying down your debt while not saving anything.  If you have an unexpected expense, then what will happen?  You will go into more debt.  That’s why I believe in doing both at the same time.

For us, we are using the snowball method to payoff the debt we have accumulated.  What is your plan to get back in track in 2021?