Organization & Planning

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.

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):

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.
Are you both spenders? What will happen when there are no reserves for emergencies?
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.

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.

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 finan love and money ces 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.

Credit Card To The Rescue

For several years, we were planning this big vacation for this year. We would be visiting several European countries over the course of three weeks. Lots of time and efforts was put into the planning and coordinating with friends we would be seeing along the way. Enter 2020 and the pandemic, and we cancelled everything.

That left us with many refunds / credits to pursue. The airlines tickets were amazingly easy, we cancelled, and miles were returned to our account within days. We have a credit for future travel – easy. Hotels were all booked without a deposit – so that made cancellations easy. Excursions were fairly easy to cancel, although we have credits for one to use in the near future (I hope).

Now on to the hard part. We chose to cancel our cruise before the cruise line cancelled the cruise. We did it before final payment, as we did not want to have our money tied up. Now, we needed to get back our deposit plus some extra charges. We cancelled our cruise more than 90 days in advance, so all was refundable. We understood that refunds were taking quite a while and were patient. The credits started to come in and various amounts. No amount refunded was equal to the charges. So, we totaled up what was owed and started to subtract the refunds, but not all the money was returned. (Thanks to meticulous record keeping, we knew what was owed to us and how it was paid for).

Why is this important? Because when all was done, we were not made whole. We were shorted some of our money paid. We ended up filing a dispute with our credit card company. When you use a credit card for payment you have the added benefit for protection. We were able to provide all the details, original charge information and all the calls / emails to rectify the situation. This is important for your dispute case. Then just this past week, the dispute was resolved by our credit card company and we are all set, and we were made whole.

When you find yourself at your wits end and frustrated, know that your credit card company can help you resolve the situation. Remember this only works if you use a credit card for payment.

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.