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Generosity Is Not a Feeling

That is a quote from Andy Stanley who is a pastor, writer, and speaker in Alpharetta. I recently attended a conference for financial planners, and he was one of the speakers. That statement really hit me because my acts of generosity are definitely inspired by the feeling I have in that moment: the child at the door raising money for band/sports/schools, the plea for funds at the charity dinner, the pictures of the starving animals on TV. Certainly I can be pushed into generosity, but is that really generosity? Andy would say, “absolutely not;” it’s a response to good marketing.

Andy describes generosity as the “premeditated, calculated, designated emancipation of personal assets.” Under that definition, I am not generous in the least!

Let’s look at that:

  1. Premeditated – planned in advance; an action and not a reaction (the child knocking on the door)
  2. Calculated – you know the amount
  3. Designated – you know where it is going
  4. Emancipation – you set your money free to do good in the world (how inspiring is the word emancipation!)

One thing that has always bothered me about my random acts of giving is that I am scattering seeds to the wind rather than purposely planting them where they will grow in a direction that is important and meaningful to me. That “designated” part was the initial source of unease for me but certainly premeditated and calculated are just as much an issue.

How do you rate under Andy’s definition of generosity? Is that definition meaningful for you? Maybe you have your own that makes sense in your life. Mine was based on responding to a need from someone else but did not ever really belong to me. What is my desire to share my blessings in a direction that touches my heart, and how do I go about doing that with some forethought?

This directly ties to Andy’s question: “what is your plan for supporting organizations and causes that you are passionate about?” Gulp. I am a major planner (uh, it’s actually part of my job title!), but I don’t have a plan in this area. I am as random and un-premeditated as you can get. Oh, good, another area of my financial world that needs work! What’s new?

So, I am moving in the direction of premeditation as a first step. What are the organizations that I am most passionate about? As my kids launch into their own independent lives, the organizations that have received my passion (and my time, talent, and treasure) are no longer relevant – their schools, their activities, their passions. So what are mine? Where do I want to make an impact?

Think about your own premeditation in this area. Is that meeting your heart’s desire? If not, take the step with me and start “meditating” on your own passion for changing the world.

To your financial success (and generosity),

Tana

Picture Your Vision

Vision – It reaches beyond the thing that is, into the conception of what can be. Imagination gives you the picture. Vision gives you the impulse to make the picture your own. ~ Robert Collier

The conception of what can be” is such an inspiring, freeing thought. We each have the freedom to conceive of what might be for ourselves – the possibilities are endless! To create a vision of your life as you want it to be must be the first step to creating that life. Whether you are envisioning a bigger bank account, a higher net worth, more income, or debt-freedom, the vision is the destination. Without the vision, you are just waiting to see what happens!

I was in a workshop yesterday (thanks Diana Murphy and Wendy Watkins!) where we wrote a letter to our best friend dated a year from now. The letter was one of those that had prompts supplied by Wendy, and we filled in the details, the vision of what we would be talking about a year from now. It was so fun! There was absolutely no time or room for explaining “how;” we only discussed the vision. Wendy referenced the famous Stephen Covey habit, “begin with the end in mind” which is another way of saying, “create a vision.”

The beauty and fun of this exercise was that we were freed from the skeptic (“that could never happen”), the pragmatist (“how in the world will you ever make that much money?”) and the dream-basher (“who do you think you are?”). Those 3 rascals can occupy a lot of my mental space if I allow them to. Add in the critic, the doubting Thomas (or Tana as the case may be), and the worry wart and you have a recipe for curling up in bed with the covers over your head! Frequently, we let all of those other voices chime in. Party crashers!

When you are thinking about the vision, “the conception of what can be,” you leave all those sad sacks behind. Drown them out with the clarity, emotion, and detail of what you clearly picture as your heart’s desire. Put yourself a year into the future where you have become the person that you admire, where you have achieved the lofty goals that you have set, and where you are living the life that you most desire.

So, to borrow from Wendy, here is my version of the letter for you to complete:

Date February ____, 2018

Dear ______________,

You will not believe the year I have had! It was the most amazing, incredible year ever. And when I think about how my financial situation has changed, I have goose bumps! Last year, I earned ______________ and my savings increased by ________________. Besides that, I reduced my debt by _______________! I know it seems odd to talk about my money so openly but I know that you will understand how amazing and exciting this is for me. I also finally ________________________________________________ which is such a weight off my mind to complete that I feel light as a feather now. The best thing that I did for myself financially was _______________________________ and I am so glad that I did because now __________________________________________________.

I hope that you too had an amazing year, but if you didn’t, take time right now to create your own vision of what next year will be like for you.

Happily,

[your name]

I invite you to expand your letter to include relationships, health, spirituality, career, and personal growth (sounds a lot like what WOYN is all about!). Put it all in there – create such a beautiful, exciting, compelling vision that you jump out of bed every day to start running toward that vision. And when any of those other voices start to squawk, politely thank them for their concern, and drown them out with more details about your vision.

Give yourself the gift of exploring all of your possibilities, dreams, goals, and deepest desires. You don’t have to know how you get from here to there. You just have to visualize what “there” looks like. Go. Start creating the vision.

To your financial success (and vision),

Tana

 

Balance or Fall off!

A balanced lifestyle is simply a state of being in which one has time and energy for obligations and pleasures.  ~ Madisyn Taylor

A balanced financial life is one in which you have the money for obligations and pleasures. This is the never-ending dance of what we want versus what we need; what is right-now-in-the-moment versus what is my biggest, most important goal. I tend to slip too far on one end of the “teeter-totter” or the other too frequently. The problem with locking into too much austerity is that the caged animal (me!) eventually goes completely berserk and unleashes in a wild spree of mindless spending. “I want, I want, I want” becomes overwhelming and the spoiled brat takes charge.

The key is balance. Oh, that is a word that I am just not great at applying in my life – anywhere. I seem to love being at one end of the teeter-totter or the other. So, my behind is either in the mud or dangling precariously off the end of the board. Fine when you are 7 but less great at 50-something!

This year, I want to sit in the middle of the teeter-totter by building in the small pleasures (a monthly facial – what a treat!) and adding in just a bit more toward the obligations. I am going for a bit of this and a bit of that rather than all or nothing. I am programming myself to think of my monthly facial every time the brat in me wants, wants, wants. “Do you want this or that, little 4-year-old self? Pick one and go skipping off happy and satisfied.”

Yes, I want my financial state of being to be one in which my spoiled brat and my task-master are both co-existing together, quietly, maybe on a blanket, under a nice tree, far, far away from the teeter-totter.

To your financial success (and balance),

Freedom

Change does not roll in on the wheels of inevitability, but comes through continuous struggle. And so we must straighten our backs and work for our freedom.  ~ Martin Luther King, Jr.

 

On MLK day, I wanted to find some words of wisdom from the great man himself. Obviously, he was talking about a different kind of freedom back in the 60’s when he said these words, but they actually apply to any kind of freedom that we are seeking. Debt-freedom requires continuous struggle as we balance long-term goals with the excitement of the moment. Financial freedom (defined as not needing to work in order to support yourself and your family) requires a struggle to save and to spend less than we make. Freedom from financial worry and stress requires our constant vigilance to stay on top of bills and expenses, track our spending, and try to live within our means.

Freedom of any kind requires us to stay vigilant and focused on the long-term rather than the short-term. It is always easier in the short-term to do nothing, to worry about it later, and to take the easy road as we go along with friends to eat out rather than cooking at home or pay for conveniences rather than do it ourselves.

As you think about the kind of freedom that you desire, what struggles do you need to overcome? How can you straighten your back and work to overcome those difficulties? For most of us, our financial difficulties are but a drop in the bucket compared to the freedom that King fought for so let’s not let these struggles weigh us down. Let’s face them head on and do what we need to do to shrug them off forever and get on with the more pressing things that the world needs.

As I think about the incredible impact that Martin Luther King, Jr. had on the world, I am eternally grateful that he struggled through his adversity and brought about change that betters all of us. We have come a long way from where he started and we still can do better. Much has been achieved but there are still struggles for too many. We all need to work harder for our freedom in whatever form that takes and face whatever struggles must be overcome.

Thank you, Dr. King, for all that you gave, for the wisdom that you left with the world, and for your vision of how it could be. May we all continue to see that vision and work to free ourselves from whatever holds us back.

To your financial freedom,

Tana

 

Prosperity

Prosperity is the alignment of your beliefs, values, and actions.

Lorri Palko & Beth Egan

This is a unique way to look at the word prosperity. It puts a different spin on it and makes prosperity that much more attainable and controllable. “Alignment” is a great word to reflect what we truly want in our lives – for everything to be synched up, moving in the same direction, and flowing. We talk about the “stars aligning” or “everything falling in to place” as a nod to order and consistency.

As I was reflecting on that quote, I have a strong sense of the power that is inherent in aligning my beliefs, my values and my actions. The power of taking control, of being in charge, and of making things happen. We don’t wait around for prosperity to find us, we create it! So, to begin creating, consider:

  • What are your beliefs about your financial abilities? Your ability to make money, use it appropriately, and accumulate wealth.
  • What are your values around your financial life? What is the most important aspect of living authentically for yourself in this area?
  • What actions can you take today, tomorrow and going forward to make sure that you are living in prosperity by aligning what you belief, what you value, and what you do?

It is rarely the “big bang,” the grand gesture, or the sudden action that brings prosperity. It is the daily activities, the million small decisions, and the commitment to align your actions completely with what you believe and value.

To your financial prosperity!

Tana

The count down is on…

I’m not talking about how many  days until New Year’s Day; I’m talking about how many tax days are left in the year. Wow, fun stuff!

Here are a few things to be thinking about as you round out the last tax month of the year:

  • Income items – is it better for you from a tax-standpoint to accelerate income into 2016 or delay it into 2017? For employees, you don’t have much choice, but for business owners, you may. Talk with your tax accountant to see what options you may have and what may be most beneficial.
  • IRA and HSA contributions – ok, you actually have a whole lot longer to think about these items as the code gives you until April 15th to round out the contributions but make sure you are planning to have the cash available to fully fund these important accounts. Even if you participate in a retirement plan, you can still make nondeductible IRA contributions. Make sure you are fully funding your retirement accounts first and then discuss with your tax accountant to determine if this would make sense for you.
  • Charitable gifts – This one does have a hard deadline of 12/31 so determine what giving you want to do and then plan accordingly. Ask your investment advisor if it makes sense to give appreciated stocks in lieu of cash. You can then replenish the gift with the cash, saving capital gains taxes and allowing the advisor to rebalance the account without selling securities that may be at a gain.
  • Charitable gifts of household items – Now is the time to clear out the closets, the drawers, and the cupboards of all the items that don’t fit, that you don’t like, and that you don’t use. The Goodwills, Must Ministries, Hope Houses, and many other organizations rely on your household goods to survive. Here’s a few tips:
    • Make a list of all the items; you can group them for convenience.
    • Price it based on the thrift store value. (Goodwill has one at https://goodwillnne.org/donate/donation-value-guide/)
    • If the total value exceeds $500, you will need a lot more documentation for tax purposes so consider dividing up your donations for different charities.
      • Vietnam Veterans – I gave all my boys clothes and shoes to them.
      • Hope House (domestic violence shelters) – I gave my everyday women’s clothing to them.
      • Drake Closet (consignment shop which supports The Drake House – transitional living for homeless women and their children) – I gave my dressy, business clothes to them.
      • Goodwill or Must Ministries – I gave my household dishes, small appliances, etc. to them.
      • American Kidney – I gave any furniture to them as they pick up. (Nspire, Hope House and the Vietnam Vets pick up as well as many others.)
    • Keep all your receipts, the list of items and the pricing with your tax items.
    • Bask in the admiration that your tax accountant will have when you give him/her this information at tax time!
  • Review your 2015 tax return – Look at other items that impacted last year’s return and see what you have some control over for this year. If you need to make estimated tax payments, talk with your tax accountant to see if you should pay the state tax payment in December or January. Discuss any other items that you have questions about.

With tax-planning firmly in place, you are officially ready to bring in the New Year!

To your financial (and tax) success!

You Won’t Believe this! It’s FAFSA Time!

 

What? Isn’t that in January? Not anymore! For those of you with kids in college or about to be in college, this year is the first year of the timing change. Gone are the days of trying to cram in your tax return in January or make a guess as to the numbers in order to complete your FAFSA as early as possible. The Department of Ed is now using your 2015 tax return to calculate the income portion of your (and your child’s) expected family contribution (EFC) for the 2017-2018 school year.

That is right. The new form for the fall of 2017 school year is open. Many schools don’t even want or need it until January but you can be ahead of the game and do some planning to maximize your student financial aid. Here are some things to think about:

  • The income portion is based on the 2015 tax return so there is not much you can do about that but you can plan ahead for the following year.
    • For people who have their own businesses, you can do a lot to control the timing of income and expenses (within the tax code, of course!) so talk to your tax accountant about any moves you may want to make prior to year-end to minimize your taxable income. You are probably doing that anyway regardless of FAFSA, but it becomes doubly important if you are in the college season of parenthood.
  • You can use the FAFSA4caster right now, for a child of any age, to get an idea about what your EFC may be. It is very helpful to run through that now if this is your first time preparing the FAFSA.
    • Be sure to read carefully what is included and excluded in assets. Retirement accounts are not included for FAFSA but may be for the PROFILE form (used by private schools.) Read the guidance and be sure you are clear on what goes where.
  • Assets of both the student and the parent are assessed. There are tables for the parent to determine the assessment rate based on age, family size, etc. but the student assets are likely going to be assessed at up to 50%.
    • This is where timing is important. The assets you report are as of the day that you hit “submit.” That timing is important and it is under your control! (and so few things are at this stage of the game!)
      • Pay your bills, make your retirement plan contributions, make your tax deposits, etc. before you fill out the FAFSA. There is nothing wrong with putting yourself in a good spot before you fill that out.
      • If your child has saved money for a car or a laptop or other items, you may want to consider buying those items before you submit FAFSA.
    • Make sure you save your documentation for the numbers you use. The FAFSA system will pull directly from the tax system so you don’t have to do anything with respect to the income side but do document your whole balance sheet, where you got the numbers and what you are including on what lines of the FAFSA. That will help you in the event you are picked for verification and also will help you when you do this next year.
    • Be aware of your school’s deadlines and try to balance your need to plan and plot with the desire to be “first in line” for that money (if you may qualify for some). While everyone can get the regular loans, the subsidized loans, grants and other free money are not unlimited so earlier is better.
    • There are certified college planners out there so check the website if you want some professional help. (niccp.com) or contact me; I’m certified. This is best done when your child is starting high school but they can give you some tips and tricks even if you are further down the road.
    • Be sure you go to the real FAFSA (fafsa.ed.gov). There are a lot of look-alike services out there that will charge you to submit the FREE application for federal student aid form (FAFSA) so be careful when you are googling!
    • Even if you doubt that you will qualify for any financial aid, FAFSA is frequently the first step for the financial aid office even when getting merit scholarships so read your school’s financial aid/bursar site carefully to know what you need to do. This also is part of the process to get Hope or Zell in Georgia (although you can complete other forms as an alternative.)
    • Private schools may want both FAFSA and the PROFILE form so again, check the website for info so you are clear.

If you have a student in the throes of college apps, best of luck to you and to them. If you have someone coming up in high school, start doing some homework now. It is an adventure, albeit an expensive one, so take a deep breath and start clicking!

To your (and your student’s) financial success!

Tana

Uh-oh!

There is suspicious activity on your MasterCard in the amount of $99.99 at Target. If this is your valid charge, press 1, if not press 2. “Hmmm, not mine,” I think as I sit on the deck in the afternoon sun. Turns out, it was not my husband’s either. “Ya, I got hacked today. They charged $99.99 on my Visa as well.” Yikes! (FYI, if you are a hacker or credit card thief, be aware that $100 is apparently not the magic threshold for the credit card companies. Lucky for us.)

Identify theft, credit card theft, hacking, ransomware, the list goes on and on with all that you have to be aware of and nervous about. What got Tom was a click on the “Where are They Now” pop up for child actors. (I am pretty sure I have clicked through those pix in a moment of procrastination myself!) Up came a demand to pay up or they were going to sell his credit card to thieves around the internet. We aren’t exactly sure how they were able to get the card numbers (not stored in a browser) but apparently they did get those two.

What now?

I am no security expert but I do help my clients on occasion when their virtual reality becomes their actual reality, and they have to try to undo the damage from a random click. Plus, I am in the process of doing all of this stuff, too! Here are a few things to get in place if that happens:

  • Understand your Credit Monitoring Service: If you have something in place (LifeLock or one of the many that have come up from all of the data breaches), understand your responsibilities, how it works, and what you need to do. Usually, you must review “credit alerts” and respond if the activity is not yours. Do that. Every. Single. Time.
    • Have their contact number in your phone and keep your log-in info in your usual password “safe place” so that you log-in right away.
    • Understand if they will do credit agency notifications in the event of lost or stolen card numbers.
  • Call the bank and Credit Card Companies: As a result of my “pressing 2,” my card company contacted me, ran through the list of recent of charges to eliminate the fraudulent ones, and ordered me new cards. Boom!
    • If they don’t do that, you contact them. You can put them on alert for fraud without canceling if you are unsure whether your account has been compromised.
  • Credit Agencies:
    • Freeze Your Credit: This locks down your credit and the agencies will not release your credit to anyone (including your valid credit application!) If you plan to refinance your house, rent an apartment, co-sign student loans, or get the discount deal at your local department store for getting their credit card, then this is not right for you. You have to unfreeze your credit, apply, and then refreeze.
      • This might be great for your kids or college students! Many identity thieves target young kids knowing that it may be years before they are old enough to check their credit.
    • Place a Fraud Alert: For 90 days, anyone pulling your credit has to verify your identity. This can help stop instances of new credit being issued fraudulently but will not prevent access on your existing credit.
    • For more info, go to this site regarding credit freeze . To place such an alert or a freeze, contact one of the credit agencies.
  • Monitor your bank and credit card activity: Log-in regularly and scan the charges. Alert the credit card company immediately. (You can dispute a charge online but do follow up with a call to cancel the card and get a new one issued.)
    • Remember to contact companies that auto-bill your credit card each month. Health clubs, cell phone, utilities, etc. Scan the prior month’s charges and start logging in to change the card number. You don’t want to suddenly see late fees when the card declines!
  • Run virus scans and malware scans on your PC immediately: Your anti-virus and other malware tools should detect any software that the hacker may have installed. Contact your computer tech if you feel unsure or want a pro to take a look. It will be worth the price just in peace-of-mind.

The good news is that this is a common occurrence now and companies are ready to work through it. (I guess that is also the bad news!) Regardless, be careful out there! And really, you don’t need to know where those child actors are now. Perhaps just play solitaire instead.

To your financial success (and safety!),

Tana

You Just Never Know!

Someone that I know died last week. She wasn’t a friend, but was someone I have known for a long time, and most shocking, she was my age. Death is the one thing just about guaranteed to rock our worlds even if it is peripheral to our day-to-day lives. She has a daughter the same age as my son and my heart breaks for the family to lose someone from their immediate family. It is a hole that can never be filled and my prayers are with them especially today for her funeral.

That brings me to the awful topic of being prepared for such an event. With my clients, this is always a topic of conversation as we get new clients integrated so I want to share some of the important things that we discuss with them. You just never when “your day” might be and it is so much easier on those you leave behind if you take a few unpleasant steps to be ready. It is especially important if you are married to make sure your spouse has done these things as well. Death is hard enough without having to wrangle with legal things that could have been handled and were not.

So, the list:

  • Do you have current wills, properly executed in your current state of residence?
  • If so, do you know what they say?
    • Who is the executor, trustee and guardian for minor children?
    • Do you still want those people in those roles and are they still capable of fulfilling them?
    • If you have children in their late teens, even 18 or 19, is the plan specified in the will going to work? Moving them to your sister’s in Iowa may have seemed fine when they were 2 and 3, but now at 17 and 18, it just may not work.
      • My son just turned 18 and is still in high school. He may be legally of age but yikes, I would not want him on his own if something happened to both my husband and me!
    • Does the will still refer to a “credit shelter trust?” If so, you may want to consider updating it because the estate tax exclusion is much larger now than it was prior to 2010. This doesn’t mean your will isn’t valid, it just means that you need to understand what assets may end up in such a trust.
  • Do you have a Health Care Directive, valid in your current state of residence, and has it been updated within the last couple of years? This isn’t something you need if you die, but it is important if you are in an accident or have a catastrophic event. You can update these without an attorney if you so choose. Go to caringinfo.org for the form and good information about completing it. Again, it needs to conform to your state’s requirements so be sure to pick your state of residence. If you are updating your will, attorneys typically update both powers of attorney as part of the package.
    • Are the people you have named in your directive still the appropriate people?
  • Do you have a Durable Financial Power of Attorney? Again, this is not helpful if you die but is critical if you are in an accident or are otherwise incapacitated. If you have divorced, you may want to update both powers of attorney if you have not already.
  • Do you know who the beneficiaries are on your insurance policy (both the policy through your employer and any individual policies that you have) and your retirement accounts? This includes IRAs, Roth IRAs, and employer-provided plans. Again, if you have divorced, you should update as those plans typically name the spouse.
    • Consider if your children are over 18 if it is appropriate to have them as contingent beneficiaries (or primary if you are not married). There are many considerations here so talk to a financial advisor or an estate attorney to fully understand your options and the impact. There are a lot of tax considerations as you look at retirement and other tax-deferred plans so be sure you are clear on that aspect as well.
  • Passwords: Does your spouse or your executor know where all of your passwords are? There are certainly workarounds, especially if you are married, but do you want your grieving spouse to be fumbling around trying to get access to your computer in order to pay the mortgage right after you died? This is a biggie as more and more of our lives are lived in the virtual world.
    • I believe that Facebook now has an authorization form that you can process online so that you can leave them access in the event of your death.
  • Letters to your children or other family members: Have you left anything for your kids that they can hold onto in the event of your death? When my dad died suddenly at my age 12, I would have given anything to have a note from him. I left letters with my will so that my kids will know what hopes and dreams I have for them. They were not so easy to write, and I hope they don’t get to read them for a long time, but it is important to me that they have something from me to them to hold onto when the time comes.
  • What is important to you? There may be specific things that you want specific people to have now that you are older. Your china, jewelry, scrapbooks and photo albums are all important items. If it is important to you that certain people get them (or don’t!) then you need a provision in your will to recognize that or at least to refer to such a list that you may prepare. Talk to your attorney about these things.
  • Special circumstances: As our kids grow, marry, divorce, have kids, get sick, get rich or poor, or have troubles, we may find that the plan we made when they were kids is not appropriate any longer. Step back and think about who will be your beneficiaries, how much money they will ultimately receive and how old they are. Are they mature and responsible or likely to blow through money quickly? There are a lot of estate planning tools available to address just about any situation so if you have some concerns about how your death will impact your heirs, talk to an estate planning attorney so that you can have a plan you feel good about.

We all hope that we will die in our sleep at a ripe old age, in perfect health but that is not the case for most. For some, death appears too quickly at the door. It is not fun to think about or talk about but being prepared today is the greatest gift that you can leave your family.

To your financial success (and your family’s)!

 

You Don’t Have to Be an Olympian to Go For the Gold

The Olympics always stokes the patriotic fires, ignites our love of both champions and under-dogs, and touches the spirit of greatness that lives in each of us. There are so many stories that come out of the games, some of triumph over the odds, some of defeat and loss, and others of great competition and comradery.  There is something about sports that touches us deeply and somehow makes us each want to do better, set goals, and strive hard to achieve them. When you think of athletes spending their whole lives training for races that last only minutes, it takes commitment to a whole new level.

What can you take from the Olympic spirit and apply to your life? Can you commit to setting some goals? Can you sacrifice at a fraction of what the athlete must sacrifice in order to hit your goal? Can you keep moving forward when there is no crowd to chant your name, no record to set, no line to race across?

This week, think of what “winning the gold” means in your life. Maybe it’s re-committing to your savings plan or starting the holiday shopping early so that it is paid for before the big day. Maybe it is cutting up that credit card and envisioning a zero balance a year from now. We all are “going for the gold” financially in many ways – heck, some months, we are just trying to keep a little of the gold in our bank account despite all of the “musts” that lay claim to it every month. Take the athletes’ fire, strength, dedication, and commitment and transfer some of it to your life. See yourself hitting the gold medal mark in some aspect of your financial life and then cheer yourself on to victory.

Every athlete who competes in the Olympics had to commit and recommit; take a step forward and then perhaps suffer some setbacks. They all had to gut it out when it was hard, lonely, and seemed like they could never reach the mark. The Olympians are the ones who kept at it, doing what they could do every day. This week, take the Olympic spirit and direct it toward the things that are most important in your life and then go for your own personal gold.

To your financial success!