Jill Russo Foster

Tips for Successful Personal Finances

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What We Spend Money On

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Last week I wrote about what we don’t spend money on.  Some of it may have surprise you.  But we don’t live by candle light and never go anywhere.  Today, I’ll share with you what is important to us and what we spend our money on.

Yes, we spend money on food – good food – healthy food – organic, free range, pasture raised food like our parents purchased.  We make most of our foods from scratch and have home cooked meals most nights and bring our lunches to work.  We rarely buy processed and prepared foods.  Once the weather starts to warm up, I start my vegetable garden.  It’s another way to have fresh food at a fraction of the cost. This is where we spend money.  I like to think of this as back to basics.  The same is true for our home.  We clean with home made cleaners, made up of vinegar, baking soda, essential oils and water.

We also travel.  We save most of the year to travel – sometimes local sometimes far.  But we do this on a budget and look for ways to save with deals, points, miles and rewards. We are in the process of planning a trip for 2020 right now. It may seem far away, but to get the lowest prices you sometimes have to plan the travel when it becomes available.  You may be aware of this with airfares that prices go up and up, the same is true for other travel plans.

What do you spend money on?

First Together Then Apart – Now What?

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In our last issue, we discussed whether you should blend your finances when you get into a relationship. Money will be your biggest source of friction, and having boundaries doesn’t hurt. I listed some of the different financial relationships couples choose. There are different options besides “What’s mine is mine and never ‘ours’ or “It’s all or nothing or I’m out of here.”

Sometimes your best efforts to create a life together fail, and the relationship ends. Today, we’ll discuss how to unblend your finances. Whether you decided to share all of your accounts, or only share expenses, you should separate your finances as soon as possible, because you can be sure that someone’s name is on the wrong paperwork.

Take a look at your…

  • Rent or Mortgage: Who is on the lease agreement or mortgage? It should be the one who actually lives there. Ignore that piece of wisdom and risk having your home sold out from under you.  Your name shouldn’t be on there if you don’t live there.
  • Utilities, cable, and cell phone: Whose name is on the accounts? They should be in the name of the person using them. If you don’t transfer ownership, you could have your utilities cut off without notice or worse yet – have collection accounts on your credit that you didn’t even know about.
  • Insurance: This includes car, apartment, home, life, and medical. You don’t want to be without insurance, and you don’t want your money going to the wrong person if you don’t update your beneficiaries.
  • Credit cards and loans: Do you want to have your credit affected by charges that aren’t yours, or be forced to make payments on a car you don’t use?

“But Jill,” you say, “these all sound like things that happen in a hostile breakup. We’re not like that.”  Even if your breakup is friendly, and your ex is as trustworthy and competent as a super hero’s alter ego, you still need to separate your accounts to protect yourself in case something happens to one of you. If one of you dies, remarries, or is mentally incapacitated, the law won’t recognize verbal agreements or promises. They only see whose name is on a piece of paper.

Let’s talk about verbal agreements. Let’s say the house and car loan are in your name, but you want to be nice. You don’t need them, and your ex does. Your ex has agreed to make payments, so it’s no big deal, right?

Wrong. Your credit will take a hit with the first missed, or late, payment. And, you may not be able to get a new car or house for yourself because your debt to income ratio is too high. The bank won’t take verbal agreements or divorce decrees with your ex into consideration when you apply for your loan.

Here’s something else to think about: Can you maintain your current lifestyle if you live separately?

If you end up with the house or the car, can you afford the payments? Can you pay for the utilities, the maintenance and the insurance? You may have to make tough decisions, because you could be without the things you need to live if you don’t plan ahead.

Too many people have  found themselves temporarily homeless, or had their credit ruined, or worse bankruptcy after a breakup. Don’t let this happen to you.

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.

 

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.

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!

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.

Saving Money

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I am always looking for ways to save money.

Some of the ways that can help you do this is to be on top of your finances.

Let me tell you what I recently did.  We purchase a bark collar for the puppy and within a week, the battery was flashing low.  Instead of going to the store to purchase a battery, I brought the receipt and all the original packing back to the store and explained the situation.  The store manager gave me a replacement battery pack.  Not only did I get the battery replaced free, they gave me an additional battery for the future.

Another example, I purchased something online that wasn’t what I expected.  I was told there was a no return policy after opening.  I explained that I did open it and that’s how I knew it wasn’t what I expected.  After several emails back and forth, they agreed to a return minus the restocking fee.  Yes, I am getting less than I paid, but it is most of the money refunded and it’s not another item sitting in my house, that I won’t use.

Sometimes you can advocate for yourself and get a resolution to the issue that is wallet friendly.  Try it sometime.

Other ways to save money, you can stick with what you own and not purchase the latest and greatest new option.  Our TV/Internet provider wanted to give us faster internet.  The catch was it would be an additional $5 more per month.  We said “no”.  There is nothing wrong or slow with what we have now.

Savings a few dollars here and there can add up.

Upcoming Workshops

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Now that we are gearing up for the fall, I wanted to share with you some workshops I am teaching at Norwalk Community College (Norwalk, CT) in the Extended Studies Dept in the Fall term.

Take Control Of Your Finances

Welcome To The Real World: Teens and Money

Budgeting For The Fluctuating Income

For more information and/or to register click here.