Jill Russo Foster

Tips for Successful Personal Finances

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Love and Money

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In honor of Valentine’s Day, let’s talk about relationships and finances.  When you get to that point in a relationship where you are discussing finances, what should you do?  Should you have joint accounts or separate – you get to choose?  Here is some of the thought process for both:

First of all, you may choose not to blend your finances at all. Many couples keep separate accounts and actually have happier and more successful partnerships because there are fewer arguments about who spent money on what and who overdrew the bank account. Others choose to handle their money and debts together, and they do just fine. The choice is yours.

Look at your habits and goals when you consider whether to combine your accounts or keep them separate:

  • How does each of you handle savings and debt repayment? Do you have similar philosophies, or are your bank balances mirror opposites, with one carrying a large debt balance and the other carrying a large savings balance?
  • Do you have the same financial goals? Or, is one of you saving mainly towards retirement, while the other wants to save for amazing vacations and a nice car.
  • Does one, or both, of you have any issues that you would bring into a blended financial arrangement? For example, are there any debts that are currently in collections or that were charged off; bankruptcy; judgments; wage garnishments; or tax liens?

Some people find this subject to be a touchy one.  But, keeping separate accounts isn’t about holding out, or being less in love. Sometimes, it’s about protecting each other and making decisions that will carry you furthest towards your mutual goals.

If You Have Separate Accounts, How Do You Split Expenses?

Most people assume 50/50, but there are other options. You could choose different percentages based on incomes, family size, habits and hobbies. For example, if you have shared custody of your 3 kids with a former partner, then you might pay a higher percentage of the food bill. If your hobby raises the electric bill (gaming, fish tanks, etc.), then you might pay a higher percentage of the utilities. You don’t have to use percentages – you can divide up the bills, where one of you pays for this expense and the other pays for that expense. The choices are as varied as the couples who make them.

The bottom line is that you need to make informed choices that are right for you individually and as a couple. Money is the biggest source of friction in relationships. Have the conversation before you get married or move in together, so you know what to expect ahead of time. If you’re already living together, it’s not too late to make changes.  Remember that this isn’t set in stone.  Life changes and so do your finances, so revisit them on a regular basis and make the necessary changes for what is going on in your life now.

Finances and Money

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Finance and money is more than paying your bills on time.  Yes, this is extremely important – paying bills late may effect your credit and can cost you money with late fees / finance charges.  But there is more getting your finances organized.  Do you have the money to pay your bills each and every month?  You will want to have money for today and for the future.  Do you have goals you want to achieve?

There are many ways to deal with your finances and money and you have to find the plan that works for you.

The major parts of finances and money:

Determine your goals – what do you want in life?  Maybe a short term goal is having your month last all the way to the end of the month, or to be able to pay all bills in fulls each and every month.  What about long term goals?  How about saving for …. (insert goal such as paying for college, a car, home, vacation) all the way to financial independence.

Action plan – how are you going to achieve your goals?  Break this down into action steps, using the smart goal formula.  What is the first step you need to do to start down this financial road?  Maybe it’s starting to save … (insert amount every pay period).

Budgeting – now’s the time to put your money on the table.  How much money do you need to achieve your goals?  Start by tracking your net income and your expenses (every penny) to see where you stand.  Don’t think your have money to save, then you need to make changes to reduce your expenses and/or increase your income.  Remember that making a budget is not a one time thing, your are making a budget, review and sticking to it.

Savings money – break it down into manageable amounts and be realistic.  Your not going to be able to save $1,000 in a month, but your could start out by planning to save $20 or more per paycheck.  Automating your saving is the easiest and best way to stick with this goal – paying yourself first before you paying anything else.

Paying down debt – we all know that the finance / interest charges are the enemy of your budget.  This is money that could be used in other ways.  Don’t stick you head in the sand, we have all been there at one point or another.  Make a plan to payoff your debt – avalanche or snowball methods are way to start.

Take some time and take a look at your finances and start to deal with your finances and money to get on a path to achieve your goals.

This is very simplified and not all plans work for everyone.  Take the time to modify or find a plan that works for you and your finances.

If you want more information, please visit my website for my upcoming workshops.

 

The Importance of An Emergency Fund

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I am rerunning a post from 2016 that has been really relevant to us so far this year (and the last week of last year too).  We had three events between the holidays and now, that we are so grateful for our emergency fund.  It saved us again!

We woke up on a Sunday morning to no heat or hot water.  If that wasn’t bad enough, our plumber was away for the weekend.  The installer of the system was attending a football game was wasn’t available.  Luckily, we found a temporary solution.  That was great because the part took two weeks to come in (as it was back ordered).  Next, I was driving home on the highway and I had car trouble.  Help came quick and it was a minor repair.  Lastly, the furnace began dripping and another call for service.  All in all, this could have been a really expenses month on top of our regular bills.  We were fortunate enough to have an emergency fund to rely on when needed.

In praise of emergency funds! I can’t say enough about having an emergency fund to use in times of an emergency, as well as having the protection of insurance. We had a big life emergency this time, and it could have been much worse.

While Dave and I were out of the house for about an hour and a half, an emergency struck our house. A feeder line for the toilet broke and we came back to a small geyser. Not only was the bathroom flooded, the water flowed into the master bedroom and then down into the basement. Ugh! You can imagine the damage this has caused. But it could have been much worse.

So this is how our afternoon went:

* Shut off the water – we had individual shutoffs installed all over the house
* Next the clean-up began – towels, wet vacuums and more
* Contacted the insurance company to file a claim. This is the first homeowners claim we ever filed.
* Started the removal of the damaged stuff, and this was hard without Dave being able to move things.
* The insurance company sent out Service Master to remediate the damage. They moved the heavy furniture, installed the industrial fans and dehumidifiers to lessen the damage
* Next day we had to replace the modem, as we lost phone and internet service. It’s difficult to make multiple calls with only a cell phone.
* The drying out stage lasted for days. It included the carpets, hardwood floors, ceramic tiles, sheet rock, furniture and that’s only the big stuff!

Now we are at the rebuilding stage, with the contractors giving us estimates for replacing floors, hard wood and tile, sheet rocking the portion of the walls that were cut away with water damage, painting of rooms, replacing furniture and items that were damaged and more.

Living in a disorganized home as two rooms of furniture and personal items had to be moved out of the rooms and the basement, made our home somewhat of an obstacle course for quite a few weeks. Hopefully by the holidays, we can be back to our organized house.

Get Organized

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January is National Get Organized month.

What are you doing to get yourself and your space organized?

In my book, Thrive In Five:Take Charge of Your Finances In 5 Minutes A Day, January is the month to organize your bills.  Now that the holidays are over, actually open up your bills and look at the bill details, don’t just pay them.  Take the time to review them to see if it’s correct.  Take the time to see if you can do something to save money, Take the time to see what competitors are charging – maybe it’s time to switch or negotiate.  If you want to follow along, my book gives you action steps for each day of the month, so that this isn’t an overwhelming task.

We review our bills in our household each year and it never ceases to amaze me how much we can save.  We stick to my 5 minute a day theme, take an honest look at one bill.  We found that our gasoline credit card bill neglected to give us the $.06/gallon discount.  It’s not much, but it is still our money.  So we made a quick call and got the discount applied.  All this in less than 5 minutes.

And because it’s January and following along with National Get Organized month, we have set up our new filing system for 2019 bills.  Start the filing now as the year begins so that your don’t have paper piling up.  All papers are filed and ready if or when you may need them.

If you want to learn more about taking charge of your finances and would like to purchase a copy of my book, Thrive In Five:Take Charge of Your Finances In 5 Minutes A Day click here.

Double (Sometimes Triple) Savings

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If you are like me you love to save.  Getting something for less makes my day.  So imagine if you could save even more.  Well I have done great this holiday time.

I have shopped online and in person and saved both ways.  Just yesterday, I found the item I have been looking for with double the savings.  I have been looking for a great multi purpose day tote / carry on.  It has to do double duty to carry all my items as a carry on (needs to be sturdy and have pockets) and it has to double as a day tote for shore excursions (to handle all that’s needed on shore) and zip closed.  I have been searching and looking for months – at the outlets, at the famous tent sale last week and found it online this weekend.

I tell you this because I wanted this and I wanted it at a bargain.  First, it was on sale for 40% off, then the site offered free shipping and easy returns – a must.  Then I found an additional discount with Honey to make the saving even greater.

Another example, I purchased windshield wiper blades with a discount coupon at the auto parts store.  They installed them for free which is also great.  I came home a found a rebate offer on the purchase of two blades and immediately completed the online rebate. I do this online so that I can keep track of the rebate status.

Yes, I do this with most of my shopping year round.  Double and sometimes triple savings with coupons, cash back /rebate offers and credit card rewards all add up to savings.  How are you saving with your shopping this holiday season?

Increasing (or Starting) That Emergency Fund

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Are you one of those people that sets a goal to have or increase your emergency savings fund each year.  As we reach the year end, did you accomplish this?

An emergency fund is something that each and every one should have.  If life hands you an unexpected expense and you really need to pay for this now, how will you handle this without that emergency fund?  That unexpected expense can be a car repair, loss of a job, a home repair and more.  These expenses typically come when you don’t have any extra money.  If it’s something you need to do immediately, without this savings you will be adding debt to your budget.  That’s where your emergency fund comes into play.  If you have one, you wouldn’t have the stress of figuring out how to pay for it.  That’s why you need to start or increase yours today!

Have you made your plan to start or increase your emergency fund? Don’t get overwhelmed thinking you need thousands of dollars now.  Nobody starts off with thousands, think baby steps to increase your emergency savings with each and every pay check. 

Steps to start your emergency fund:

  1. Open a new savings account for your emergency fund – don’t link it to your ATM. debit card.
  2. Set an amount to save each pay period – can you find $10 or more to save each pay period?
  3. Set up automatic withdrawals from your paycheck – either through your payroll dept. or with your bank.  Think pay yourself first attitude (you won’t spend it if you don’t see it).

Follow these steps to start out and increase the dollar amount at least annually. A good time to do this is when you get a raise at work – more money coming in, the more money can go to your emergency savings.  Suze Orman’s suggests that everyone needs eight months in their emergency savings.  That can be overwhelming, so let’s start with a goal of saving $1,000 in a year – you can do this as it’s on;y $20 a week.

If you haven’t started or at the level you want / need to be at, these are some great tips from WIFE – Women’s Institute for Financial Education to get you started.

Happy Savings!

Holiday Tipping

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It’s that time of year and we are all faced with this issue.  Today, I am rerunning this newsletter if hopes of helping you decide.

The holidays are coming! The holidays are coming! You probably know this and the retail stores are starting the holidays off during the summer. From Labor Day weekend, I see the holidays all over the place in retail stores. I’m thinking the beach and heat and they are thinking December. While it’s not bad to plan ahead and be proactive, it’s too early for me, but it’s never too early to think about your budget.

Tipping is always something that comes up around this time of year. Here are my thoughts and what we do.

First, we don’t wait for the holidays. In my opinion, good service doesn’t have to wait until the end of the year. If someone goes out of their way or does an exceptional job, then by all means tip them.  A while back we bought dining room chairs and the person in the store took the time to go out of his way. That deserved a tip then and there.

Second, give what you can afford. While it’s nice to give cash and to be able to give to everyone, that may not work for your budget. You can thank people verbally and express your gratitude with a conversation, special note in a card, contact the company or supervisor and express the great service you received, instead of cash. I have made calls to the airline to express how grateful we were for a particular person and the excellent service we received. Rarely do companies get calls like this and they can seem shocked at the call.

This is my plan of attack. Create a list people in your life and here are some examples:

Mail Carrier / Package Delivery
Personal Care (Hair, Nails, Massage)
Child & Elder Care
Teachers
House Cleaner / Lawn Care / Snow Removal Care
Pet People (Groomers, Walkers etc.)
Doorman / Maintenance Workers
Assistants / Key Employees

Then make a plan. If you were to tip everyone in one week, you would break the bank. I like to start after Thanksgiving and end this by New Year. Now if you have decided on an actual tip, it can take the format of the cash or possibly a cash gift card, unless you know them well enough to pick a specific merchant’s general gift card. Spreading out the tipping, helps my budget. Plus, I like to do this in person. So when I have a service done, that’s the time I tip, and again throughout the year helps my budget as well.

Finally for cash tips, make a trip to the bank and get nice new crisp bills and have thank you or blank note cards. People who get many tips need to know who they received it from, so a short thoughtful note handwritten in the card works well. It always is so much nicer to give a tip with a good presentation. I feel that the recipient thinks you took the time to think about them versus handing them crumpled bills from your wallet.

Not sure how much to give? That’s entirely up to you. There are many guides on the internet to assist you, but ultimately it’s your choice. Make your plan now so that you check one thing off your holiday to do list.

Holiday Debt!!!!

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Did you vow to not accumulate holiday debt this year!

According to Wallet Hub, the average person is expected to spend over $1,000 this year, that is up 4.1% over 2017.

What’s your plan to stay out of debt this holiday season?  Here are some questions you need to think about?

  1. How much can you afford to spend this year without going into debt?
  2. How many people are on your list?
  3. Can you eliminate or reduce the number of people?  Think group gifts where you can pool your money with others.
  4. Could you offer a service they need instead of a gift?  What can you do that they need? Think childcare for an evening, so they can go out without the kids.

Take some time to think about what is important to you and your family.  Don’t forget to think about your budget too.  This is something that is really important so that you don’t have a January hangover. Everyone wants to celebrate the season, but no one wants someone to have all these bills come in January.  Make a plan and stick to it.

Make sure you don’t fall off your plan with Black Friday this week.

Enjoy the holidays with your family and friends.

Are You Missing Money?

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Do you ever get that feeling you are missing some money?

Last week the Secretary of State for Connecticut reported that 52,994 names were added to the unclaimed money list for the state.  The unclaimed money list is a big list of names (individuals, companies, non-profits and more), that each state maintains from institutions that turn over money to them.  You may be asking why would an institution turn over your money to the state?  Good question, these are funds from accounts that haven’t had any activity in several years.  Here are a few examples:

  • An in active savings account
  • Proceeds from a check not cashed
  • Unclaimed insurance polices proceeds

This past weekend, I did a search for myself and members of my family.  I didn’t find any results this time, but I have in previous attempts.  In the past, I found a few share of stock that I inherited and the proceeds of an old life insurance policy my father.

When was the last time you checked?  Don’t forget to check in every state you have lived in.  Remember that there is no fee to claim unclaimed money.  If you are asked to pay a fee – don’t.

Here’s an old article I wrong on this for more information click here.

 

Fourth Quarter To Do’s

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Can you believe it, it’s fall and the year end is in sight!choices

For me, there is lots to do (and I am not thinking the holidays yet).

This time of year means it’s time to review my health insurance choices.  Open enrollment for health insurance is here (or just a week or so away).  Medicare is already in the open period, the state of CT will open up the 1st of November and many company plans have the open enrollment at this point too.  It’s time to reevaluate and determine if I want to stay on the same healthcare plan or make a change.

If you have a FSA (Flexible Spending Account), start to look at the balance and determine how to use the funds.  This is a use it or lose it type of account. You wouldn’t want to lose money, would you? If you have an HSA (Health Savings Account), have you maximized your contributions for 2018?  This can be a great way to lower your taxable income.  Make sure you pay all your eligible medical expenses with this account.

Take the time now to do your research and make the choices that are right for you and your family now.