Jill Russo Foster

Tips for Successful Personal Finances

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Money Lies

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?

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

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

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!

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!

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?

Who handles the finances in your relationship?

I met a woman who asked me some questions when she found out what I do for a living.  This subject is one that all of you should be aware of and in honor of Valentine’s Day, I wanted to discuss joint finances.  You wouldn’t believe how many people this affects.

Are you married or in a relationship with joint finances? Even when couples share accounts, living space, or property, it’s typically one person who handles the finanlove and moneyces in a relationship – paying the bills, savings, investing, etc.  But the other person shouldn’t be left in the dark.  Think about your future, I have meet many who have no clue on how their finances are handled and then something happens and they now have to take charge.

Because this is your joint future, both should know what is going on and how to access the information at any time. The definition of the word joint is defined by Merriman-Webster as “united, joined, or sharing with others”.

Both of you should be making decisions together, understanding where you are today with your money and where you want to go for the future. You should both know the names of your banks and investments and how to access these accounts, especially if you use online accounts.  Think of it this way, if the person handling the finances is not able to do it – what would happen?  Could you put food on the table?  Would the utilities be paid to be kept on?

Remember, too, that your children can see how the money is handled in your relationship. What you do, and don’t do, shows them just as much as what you tell them.

I also believe that each person needs to establish credit in their own name and if you are listed as a co-owner on the assets you should also be listed as a co-owner on the liabilities. What that means is that if you own a home (your name is on the deed) you should also be on the mortgage.

Many partners are left out of the finances.  If that’s you, and something happens to the person who handles everything, you are going to have a difficult time.  You may find that the bank accounts that you thought were joint are not.  You may find that you thought you owned the home you live in, but you don’t.  You may find that you need to open a credit card or take out a loan and you have no credit in your name.

All this happens more times than I can count.  If this describes you, then you need to have a conversation today with your partner. You need to what know what assets you have, what liabilities you owe and have a plan for moving forward to achieve your goals.  The first step is having this conversation.

It is tax time.  Are you ready?

Here are a few things you need to know:

2021 IRS tax deadlines:

January                                15 Final estimated tax payment due for 2020

15 IRS Free File service opens

19 IRS Free File for military families opens

February                               12 IRS begins to process 2020 tax returns

April                                       15 Deadline to file your 2020 taxes

15 First estimated tax payment due for 2021

June                                       15 Second estimated tax payment due for 2021

September                            15 Third estimated tax payment due for 2021

October                                 15 IRS deadline for extended 2020 tax returns

You may be able to get your taxes prepared for free AND from a reputable source.

There’s help if you’re a senior or have a low to moderate income.

Go to www.IRS.gov to find information on the VITA program (Volunteer Income Tax Assistance), the TCE Program and AARP Tax-Aide.

There you can learn

  • If you qualify for the program
  • What to do bring to the meeting
  • Locations near you

You don’t have to be afraid to use these services. The tax preparers at these programs are certified volunteers who work under a qualified supervisor.  The location near me is at the local community college and is supervised by a CPA and Chair of the Accounting Department.

Each location will have different hours, so check before you make the trip. Some will take appointments and some are walk-in only.

If you qualify, you may save yourself a few hundred dollars. You’ll get the work done at no cost to yourself and a trained preparer can catch details that might net you a bigger return.

 

My Top 5 List

I want to share with you my top 5 list of what we have done with our finances over the years that have taken us from being in debt to having a safety net for our finances.

  1. We automatically save from each and every paycheck. When we receive a deposit, there is an automatic transfer of funds from our checking to our savings.  By doing this, we have built up an emergency savings account.  Something we all need.
  2. Taking our large annual bills and dividing them by 12. Then saving that amount monthly.  That way when a large bill is due, we are able to pay it in full without any scrambling or stress.  For example, our car insurance is about $900. annually.  That means we save $75 monthly to be able to make the payment.  All we must do is to plan for the increase in premium to make the payment in full each year.
  3. Earning interest on our bank accounts (yes, even our checking account) and not paying any fees to have the bank accounts.
  4. Maxing out our retirement contributions to our IRA’s accounts each year to have a nest egg for retirement. In addition, we contribute to our 401K / 403B retirement accounts.  You can never have too much saved for retirement.
  5. Contributing to a Health Savings Account (or a Flex Savings Account) to cover our medical costs that insurance does not cover.

I wrote this so that you can know what is possible.  Start today and make changes so that you can achieve your goals.  For us, this was not something that we did overnight, it took many years of making small changes to get to where we are now.

Your Financial Health

Do you ever wonder how your financial pictures stacks up?  Are you on track to meet your goals?  What do you need to still do?  These and other questions are always on the many people’s minds.

I have discussed the importance of having an emergency savings, a budget to know where your money is going, great credit /score to have the best interest rates when you need to borrow and minimal high interest debt.  Check out some of my past emails for more information on these topics.

This is a great article Six Numbers Reveal the State of Your Financial Health. How well do your finances compare to these six areas?  All are important areas that should be goals for you to accomplish with your finances.