Lighten Your Load

“It’s difficult to clearly see what needs to be done when your environment is burdened with half-completed projects, unfinished to-do lists, old files, clothes that don’t fit, and equipment that no longer works or serves any purpose.”  Debbie Ford – excerpt from The Best Year of Your Life

I am coming through perhaps the busiest and “mentally heaviest” season of my life. I didn’t handle it especially well. Ok, I completely dropped the ball on “life management 101.” I didn’t stick to my solid, I-feel-great workout and healthy eating plan. I didn’t stick to my systems to touch once, clean out my email daily, and take time to stop and clear my thoughts. I didn’t rest enough, and I did run in chase-my-tail, fight or flight mode. I didn’t stick to my money goals. “No time to make my lunch; I’ll just buy it.” Yuck. It was awful and I don’t want to go there ever again.

I saw this “lighten your load” quote and felt that she was talking to me. It is mentally heavy to have a bunch of things partially done; stacks of papers, magazines, bills calling out to us. “Mental residue” is how Brian Johnson describes it from some author that he was quoting. Every glance at the stack is a taunt, a failure, and an energy drain, constantly weighing us down.

This also applies to your money. Do you have accounts scattered here and there? Do you have small balances on credit here and there? Do you have bills coming in through paper, email, or hanging from your front door?

We all need a solid, one system way to manage our work, our lives, and our money. Here are a few questions to get us all (4 fingers pointed at me!) moving in the right direction:

  • Where can we “lighten the load” and create a good system for staying on top of our money, our bills and our accounts?
  • Can we focus on the smallest dollar value credit card and just knock out that balance while making sure that we don’t add to it?
  • Can we give up the multiple store brand credit cards in favor of one all-purpose (high reward) credit card as one way of lightening the load?
  • Can we consolidate accounts, synchronize bill due dates, automate payments?
  • Can we automate savings so that it “just happens” and we don’t have to think about it?
  • Can we find a good tracking software (Quicken, mint.com, etc.) so that everything shows up in one place?
  • Can we list out every bill that we have monthly, quarterly, annually and list out how it comes to us, when it is due and the average amount payable?
  • Can we get in place a system that we document and follow and schedule so that your money management is not a bunch of “half-completed projects, unfinished to-do lists, old files” and haphazardness?
  • Can we create and follow a system to clear out old documents, scan and shred so that everything we need is at our fingertips?

I am trying to view my recent “quarter of chaos” as a chance to see how bad the “don’t” picture is and purposefully create a “do” picture that keeps me out of such a chaotic situation in the future. I am trying to use this experience to batten down the hatches, refocus on the systems that work, rework those that don’t, and clear out the partially completed “stuff” that is stressing me out. I am trying to reflect on what I learned by being in over-drive for the last several months so that I cling harder to structure and systems, say “no” and “good enough” a bit more, and insist on time to rejuvenate and regroup. I am trying to dig in, finish things, clean up the mess, put away, throw away, and eliminate one source of mental fatigue at a time.

Where can you lighten the financial load so that you are not feeling stressed and chaotic? Pick one little thing and do it today. You will feel so much more in control, powerful, and competent! Getting better every day….

To your financial success (and “lightness!”) ~ Tana

Mothers and Money – Why They Both Matter

To all of the mothers out there, I hope you had a wonderful Mother’s Day! As I was thinking about being a mom and all the ways that moms care for their children, I couldn’t help but think of the financial impact of moms. The traditional mother role was the nurturing and physical care of the kids while dad was out hunting and gathering to provide food, clothing and shelter. We have certainly come a long way from those drag-home-the-kill days for both men and women. In 2015, about 30% of the women were traditional stay-at-home mothers while dad provided the financial support of the household. Even in those households, there are still some major financial considerations for those moms. And certainly for the other 70% who do provide financial support in some way, these things are vital for the security of your children.
For every mom, working outside the home or not:

• Do you have a current will, valid in your state of residence, which names a guardian for your children in the event of your death? Even if their dad is still living and
you are still married to him, you should name him as the guardian and provide a successor guardian in case you were both to be involved in a common accident.

• Does your spouse have a will? Do you know where it is? Do you know what it says?

• Do you have life insurance on yourself which would pay off the family’s debt, fund college for your kids, and provide your spouse with money to pay for help in the event
of your death? You should at least be able to provide a year or two of extra money for child care while your spouse gets back on his feet. Of course, if you are
providing a large part of the financial support for the family, you will want to replace your income as well. Talk to a financial planner or insurance agent for the
right amount for your situation, age and budget.

Bankrate.com has a good life insurance calculator here that you can use to get any idea of how much is enough. Term insurance is not that expensive for nonsmokers
so I urge you to investigate this option while you are healthy.

• Does your spouse have life insurance and if so, do you know with which company, how much and how you would access it in the event of his death? This is not a fun topic
but it is important for you to be in the know.

• Do you know where the money is? All of the accounts, passwords, and balances?

• Do all of the working adults have disability insurance? Anyone contributing money to the support of the household should have disability insurance in case of illness,
accident or other incapacity.

• Do you have a stash of cash at home, locked up, that you could access if needed in an emergency?

Consider getting a safe, chaining it in an out-of-sight place and putting all of your important documents, cash, and passwords in it. Wills, passports, social security cards, life insurance policies and any other important documents should be in there. The office supply stores have inexpensive safes that are small and have a built in chain.

If you are in your late fifties/early sixties, do you have long-term care insurance which would help cover the cost of your care if you had to go into assisted living or
a nursing home? This is a huge help to your children when you get to the age of needing such assistance.

None of these things are fun or seem nurturing or contributing to the care and well-being of your children but they all are critical aspects of the modern day protection of our children. As a mother’s day present to your kids, take action on one or two of these items this week so that you can know that you have done everything possible to protect and provide for your kids.

To your financial (and parental) success!
Tana

Whose Life is it Anyway?

Recently I was reading an inspirational book that talked about how people can go on for the rest of their lives doing what others tell them to do, thinking the way others want them to think and being what someone else wants them to be. When I thought  about this, it made me really take pause and be thankful that I have never been that type of person. Pretty much, I’ve done the things in life that I have always wanted to do. Sure, I’ve made mistakes along the way. And there have been plenty of times that I wished that I might have done something different. But the reality is, I made my own  decisions and I can’t blame anyone for my wrong choices.

In this New Year of 2016 what decisions have you made to do things differently? January is almost over and I’m sure many of us have had the best intentions of starting the year off with a new attitude, new goals or just doing something we’ve never done before.  Some of us are on track and others have gotten off course before they’ve even started!

The good thing is, you can start over at anytime. It’s your choice and more importantly, it’s your life. The great thing about life is that the longer you live, the more you can evolve.  Not sure where to begin? Just start making a plan.  Write down the things you want to accomplish  and then work towards making it happen. If you need  some more guidance, check out the book Working on Your Now, a practical approach for how to get started when you don’t know where to begin.

Let me know how things are going with your decisions to do things differently this year. Connect with me at info@www.workingonyournow.com.  It’s your life. Now, go live it!

 

 

Tis the Season of Giving and Saving !

In the spirit of giving, I thought I would pass along a few sites that I have come across with some free activities for those of you minding your budget during this season of spending.

For a list of free (or nearly free) Christmas activities, I found 365atlantafamily.com. The link is to their page on free Christmas events – and they have a long list. Looks like they have lots of other ideas for Georgia trips, outdoor adventures and date nights to name a few so you may want to bookmark this one.

Roswell square has a number of free activities not only at Christmas but year-around. Go to visitroswellga.com for their many activities and offerings. My family is headed to A Christmas Carol at Bulloch Hall this year. It’s not free but it is much less expensive than the big venues.

Lights, lights and more lights:

  • com has a whole guide to light displays near Atlanta. I have been to the Botanical Gardens in the past and plan to head down there again. It’s not free but it is spectacular. Off-peak nights are Monday – Wednesday so you may want to try one of those nights.
  • Lights of Life (Life College) – Monday – Thursday until December 18th, the cost is only $5/car. After the 18th, the price goes up to $10/car.

 

For those of you in the Marietta area, try https://www.winterwonderlandmariettasquare.com/ for their activities. I also see that Uber is offering new customers a free ride – use code MariettaNYE. https://www.mariettacalendar.com/ has all of the happenings on the square.

Volunteer:

  • If holiday volunteer projects are your thing, Kathryn Boortz has listed 5 projects on her November 19th blog post. https://www.boortzlaw.com/blog
  • CBS Atlanta has a list of organizations that need volunteers this holiday season.
  • Hands On Atlanta has a whole calendar of volunteer opportunities

 

Remember too, the old fashioned decorations of popcorn and cranberry strings, cut out snowflakes, and glitter stars. Even your big kids will get into the spirit once you get going. For a list of projects try Homemade Gifts Made Easy.

 

Want to make your home smell like Christmas? Put a large pan of water on the stove. Add apple peels, orange peels, a cinnamon stick and a few whole cloves. Bring to a boil and then keep on low heat. It will definitely fill your house with the smells of Christmas.  Just don’t let the water get too low or it will fill your house with smoke!

With a little bit of planning and a good internet connection, you can find fun, entertaining activities to fit your holiday traditions and not bust the budget.

I will be on a little hiatus over the holidays but will back in January with lots more tips to help you be more financially successful. May the spirit of the holidays fill your home and your family and bring peace, love, and joy to you.

Happy Hanukah and Merry Christmas!

Creating Better Money Stories Part II

A few weeks ago, I wrote about  taking action to overcome fear, uncertainty, anxiety, or guilt around money and your financial situation. This week,  I want to expand on that and give you a step-by-step guide to getting into action.

Martha Beck, an author, speaker and life coach, talks about our aversion to tasks we perceive as difficult, complicated, or that we don’t enjoy doing. You know the revulsion you feel when you have to do your taxes, go through the budget, or take on any task that makes you long to go re-grout the bathroom tile.

“Turtle steps” are Martha’s solution to “I don’t want to.” I love turtle steps and use them all the time to get me from aversion into action. A turtle step is an action that is so ridiculously easy as to be laughable. It is such a little nothing of a thing that it hardly seems like it would matter, but it does! It really, really matters because it helps overcome the hardest part – starting!

Make your first step into action be a turtle step so that you know you will do it. It’s so easy, why not? Then come up with another turtle step for tomorrow. Consistent turtle steps will move you faster and further than thinking that you are going to “block out 6 hours to tackle this.” Ha! That is never going to happen for so many reasons.

Another approach to turtle steps is to set a timer for just 10 minutes. I love this one, too, because I can really focus since it is so short a time period; I can comfortably shut down email and silence my phone knowing that the world won’t blow to smithereens without me in just 10 minutes. I can also make a game of seeing just how much I can accomplish in 10 minutes. Competition is a big motivator for me as are deadlines – can I get this done in 10 minutes? How much can I knock out in 10 minutes? My fires are being stoked just thinking about it! Plus, I know I can stomach 10 minutes of something, even something horrible like working on taxes. It’s even better if you give yourself a reward at the end of the 10 minutes. Dreaming of the leftover cake? Yep, you can have it in 10 minutes….

So, on to taking action to create a better money story. Right now, let’s roll into action and write down one thing that you could do that would overcome some anxiety or uncertainty or fear that you have about money or your financial situation. Did you write it down? That’s a turtle step – ridiculously easy so actually do it. Yay!  You took action.

Now, underneath that, list every turtle step that you would need to do in order to complete that action. When you write it down, if you feel queasy or yucky about doing that step, it’s probably too big to be a turtle step. Underneath that “elephant step” write down all of the little turtle steps needed to accomplish the elephant step. Remember, any time you feel icky about a step, try to break it down into steps so small that they are ridiculously easy. You may have some steps that do bring up emotions and bring on some nervousness (sharing money secrets with a spouse, for example, is probably not going to feel good and can’t be broken down into smaller steps) so focus your turtle steps on preparation, planning, and practicing.

Remember also that the things that we hide and avoid tend to grow and take on bigger significance in the darkness of our mind than in the light of day so take a deep breath and keep moving forward. You will probably find that the things that you dread the most aren’t that bad and once you shine a light in that dark corner.

Action is the key to overcoming anything so find what moves you into action and then get started. Small, consistent actions beat sporadic bursts so plod your way to a better money story with lots of turtle steps.

To your financial success!

Let Uncle Sam Help You Fund Your Freedom

We all want freedom and we all hate taxes so let’s see how we can use some tax advantages to help fund our “freedom from work” fund. This is a topic I talk about extensively in my book so I thought I would provide you with an excerpt from The Graduate’s Guide to Money to help compare these accounts and talk about the benefits.

 

Qualified Accounts:

401(k)s, IRAs, and Roths

Any type of retirement account is “qualified” by the tax code, meaning that it has tax advantages with respect to the earnings and, possibly, the contributions. The tax code puts limits on how much money you can put in these accounts every year because, after all, the government isn’t that generous.

Here’s a comparison of these accounts:

 

401(k), IRA, other retirement plan accounts Roth IRA
Contributions are excluded from income in the year you make the contribution.

 

This is an adjustment from gross income to get to AGI for an IRA or an adjustment on your W-2 for employer plans.

 

Contributions have no impact on your taxable income in the year contributed.

 

Earnings are not included in taxable income

in the year earned = tax-deferred growth.

 

Earnings are never taxed (assuming you meet the requirements) = tax-free growth.

 

Withdrawals are taxable income in the year withdrawn with no penalty if you are older than 59 ½.

 

Qualified withdrawals are never taxed.

 

10 percent penalty for withdrawing funds prior to age 59 ½, unless you meet one of the exceptions.

 

No penalty for withdrawal of contributions at any age; no penalty for withdrawal of earnings if the withdrawal is qualified.

 

Contribution is limited to the IRS annual maximum contribution. ($5,500 in 2015, $6,500 if you are over age 50)

 

Contribution is limited to the IRS annual maximum contribution. ($5,500 in 2015, $6,500 if you are over age 50)

 

Limit as to deductibility (IRAs) if income is too high or if you participate in an employer retirement plan. You can still make a contribution every year, even if it isn’t deductible.

 

Limit as to ability to contribute if income is too high.

 

Required Minimum Distributions (RMDs) beginning at age 70½.

 

No RMD ever.

 

Employer plans may have an employer match (say dollar-for-dollar up to 3 percent of salary or something like that).

 

Some employer 401(k)s allow a Roth 401(k) contribution which follows the same rules as a Roth IRA except the contribution limits follow the 401(k) rules.

 

 

 

These accounts create a big tax savings. Whichever account you choose, you are deferring (and in the case of the Roth, avoiding) paying income tax on investment earnings, and in the case of non-Roth contributions, you are excluding the contribution from income. Over your lifetime, that can be huge.

In the case of non-Roth accounts, contributions that you make are excluded from your current income. That means in the 25 percent tax bracket, a $5,000 contribution to a 401(k) or IRA will save you $1,250 in federal income taxes in the current year.

Roth contributions do not save you anything on your current year taxes (no deduction for a contribution to a Roth). However, if you can contribute to a Roth, you will never pay any tax on the investment earnings over your lifetime (as long as you follow the Roth rules, of course).

 

With non-Roth retirement accounts, you pay taxes on what you withdraw. The assumption is, though, that you will be in a lower tax bracket in your retirement years than in your prime earning years.

 

401(k) plans are employer-sponsored plans so if your employer doesn’t have one, you are out of luck on that front, but they may have a Simple IRA or other plan.

 

Even if your employer doesn’t have a plan, you can always open an IRA. This is an individual retirement account, so it isn’t linked to an employer except in the case of a Simple IRA which is an employer plan. Any financial institution (your bank) or online brokerage sites (TD Ameritrade, Schwab, Fidelity, e*Trade, etc.) will be able to open an IRA with a few clicks.

Roth Restrictions

If you’re single, making less than $116,000 (2015), you can contribute the full amount to a Roth. If you’re married, filing joint, you must make less than $183,000 to be able to contribute the full $5,500/person. These limits are changed periodically so check irs.gov prior to making your contribution.

The contribution to the IRA may or may not be deductible depending on your income level and whether you or your spouse participate in an employer plan. If you use any kind of tax software, it will calculate the amount deductible or you can go to irs.gov and search for IRA deductibility for all the details. Make full use of these tax-deferred or tax-free accounts while you save for your financial independence. Every dollar of tax savings is another dollar toward your goals (rather than the government’s).

If you have children in early adulthood, encourage them to make some of their “freedom fund” contributions to a Roth if they meet the income limits. It is especially powerful for people in their late teens and early 20’s to harness the power of tax-free growth over their lifetimes. For those of us a bit beyond our 20’s, it may be more advantageous to get the tax deduction in the current year that comes with a contribution to an employer plan or traditional IRA. Regardless, I encourage you to “max out” your contributions if at all possible to build your freedom fund. Discuss your situation with your tax accountant and make a plan to take advantage of these tax-qualified accounts.

To your financial success!

 

It’s Only 5 Bucks

The phrase “it’s only 5 bucks” is the financial equivalent of a leaky faucet in your bathroom; it doesn’t seem like that little drip can add up to much until you plug the sink and see how fast it fills! You can build up to a $1,000 credit card balance, 5 bucks at time. The cash you had in your wallet on Friday night? It probably drained out 5 or 10 bucks at a time. Think to yourself how often that phrase runs through your mind, “it’s only X bucks.”

 

Here is a tip for saving that 5 or 10 bucks instead of spending it: keep an envelope in your purse or wallet that says, “it’s only” on the front. For one week, every time the thought, “it’s only x bucks” runs through your mind in relation to spending, put the money in that envelope rather than spending it. If you had planned to “swipe” for it, write the amount on the back of the envelope. Next time you are at Target, Walmart, or the grocery store, count how many the times you think, “it’s only,” as you look at an item and throw it into your cart. This time, put it back and write down that amount on your envelope. Every time. You will be surprised at how many times you discount the spending because the cost is low. You will be surprised at the dollar amount that adds up to in a week!

 

At the end of the week, move all the money to your savings account. You just created savings for yourself, 5 bucks at a time!  Become aware of all those “5 buck moments” and pay attention. Don’t buy something just because it is inexpensive. Try to avoid buying at all! Ask yourself, “do I really need this?” Start training yourself to recognize that phrase and stop before you just throw it into the cart, swipe your card, or click the buy button. You can get rich 5 bucks at a time; you just need to save that 5 bucks time and time again.

 

Trying to get a debt paid off?  Do it 5 bucks at a time. If you can plug all of the 5 buck holes in your spending and divert them to your debt, you will see a measurable difference pretty quickly. With the convenience of online payments, it is no problem to send in that extra cash every week.

What’s your  “5 buck” story?

Summer Time is the Best Time to Learn to Budget!

Summer is that great time of year when you get to plan outdoor activities, enjoy lazy days by the pool, and spend day after day with your children by your side – all – day – long.  Gone the quiet, empty house during those school hours. Now, you have energetic, enthusiastic, rambunctious children looking for something to do! Somewhere to go! Making plans! Spending your money! Yep, they can hear an ice cream truck a mile away; they feel the pull of the mall from across the county; they fantasize about White Water.

Before you get too despondent, think about the prime opportunity that you have to teach your kids about choices, limits, and priorities. Here are some ways to turn summer energy into money lessons learned:

  • Give them a “treat” budget for the week – cash on the barrel head on Monday but they get nothing else from you. If your daughter buys $20 in ice cream day 1, so be it. She has to watch as everyone else gets treats on Saturday. It’s hard as a parent to make your kids face the consequences of their decisions but that is how they learn. Don’t make it seem like punishment or “see I told you so.” Just be nonchalant and nonjudgmental – her money was already enjoyed. The benefit to you is that you don’t have to make 50 treat decisions every week – you make 1 treat decision for the summer and that is “how much do they each get per week?” You can certainly let them know that if they don’t spend it on treats, they can save it. It’s their money but you have to be on board with that. This works fantastic while on vacation or visiting an amusement park.
  • Give them an activities budget for the month – there are only so many activities that a family can afford in the summer so set your budget and then have a family discussion about alternatives. Give everyone a couple of days’ notice and tell them to come to the meeting with their ideas and proposals. They have to know how much their idea will cost, how long it will take, and other relevant details. This is great on so many levels! They do the work of researching; they see first-hand the costs involved, and they get the experience of selling their ideas to the family. It is also great for prioritizing and making trade-offs: is it better to do one great, but expensive, activity or lots of small less expensive ones? These are decisions that people have to make every day so it’s great to give them some practice.
  • Get them involved with grocery shopping and couponing – have them go through papers to clip coupons for the foods they like and products that they use. Now at the store, let them compare the name brand with the coupon savings to the no name product. Which is the better deal? How much does the family spend on groceries? Make it a game to try to reduce what was spent last week. How much is buying salad fixing versus buying the premade version? How does that compare to eating out? Perhaps you let them help create grocery savings which can then go toward the activities budget.

Kids are naturally interested in money but often we don’t let them participate in the decision-making aspect of spending. They ask (for everything) and we are worn down by having to make decision after decision about the spending. Look for opportunities to give them the budget amount, and they can decide how it gets spent. The key thing, though is that they have to live with their decisions. If you keep the time frame short (a few days or a week), they can see the light at the end of the bad decision tunnel. The next time, they will be more thoughtful and aware of the impact of blowing through their money too quickly. Obviously all of this has to be age-appropriate but even a kindergarten child can understand spending all of his money versus holding on to some for next time.

Summer can be a real drain on moms and on the budget so look for ways to make it easier on both. You will have less to think about and they will get some valuable financial lessons in the process. Let me know how it goes! You can connect with me on Twitter @Grad_Guide, Linked In: Tana Gildea, Facebook: The Graduate’s Guide to Money, or via my website www.graduatesguidetomoney.com