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When is the last time you checked your Integrity?

It describes a person who is integrated, blended into a whole, as opposed to a person of many parts, many faces, many disconnects. James Stockdale from Thoughts of a Philosophical Fighter Pilot

I love this description of integrity. We (or maybe it’s just me) tend to think of character or honesty when we hear the word integrity, but James gives us a different spin on it that really makes me think of integrity more in terms of “integrated” and the connotation of wholeness and connectedness. Are we dealing with our financial lives in an integrated way? Just because we don’t cheat on our taxes, do pay our fair share, and don’t steal the post-its from the office doesn’t mean that we are dealing with our financial lives in an “integrated, blended into a whole” way.

Prioritizing Financial Life

Do you have conflicts in your financial lives? Duh – of course. Other than Bill Gates and Oprah, most of us have conflicting pulls on our money – pay down the debt, save for college, save for retirement, fix the leaky roof, get new tires, braces for the kids, take a vacation. The list of needs goes on and on and the paycheck runs out much too quickly. This is a life that does have conflicting parts.

It is much too easy to prioritize what is right in front of us (braces, leaky roof) and kick the can down the road on things like college savings and retirement. I do it all the time – “I’ll just get a few things for the house and next month, I will be able to focus on debt/college/retirement.” Next month will bring more leaks, more chipped paint, and more broken stuff that needs to be replaced. The circle of life has moved from the law of the jungle to Murphy’s law – if it can go wrong, it will.

Areas of financial focus

When this is life, we are not really living in integrity; we are living in a dis-integrated, pieces and parts way. It doesn’t feel good to be pulled in so many directions at the same time. It is hard to ignore those “squeaky wheels” that stare us in the face every day and keep our focus off the long-term. To be “living in integrity” does require a vision of wholeness, though. It isn’t easy (again, maybe it’s just me), but I think it is worthwhile for our mental wholeness and integrity (maybe integratedness.) Here are a few things that I am trying to think about as I work (always) on making my financial life “integrated” with what is truly important:

  • Is this use of money in alignment with what is really a priority for me or is it a momentary distraction – (healthy cooking is in alignment with my priorities, but really, is another cookbook necessary when I can get 10 million free recipes with two clicks?)
  • Is this use of money in alignment with my partner’s goals? (Do I really know my partner’s goals or do I just impose them on him? Let’s not ask him as the answer is likely to be embarrassing to me.)
  • Will this make me feel better about myself and my goals a week or a month from now? (Honestly, the $200 that I spent updating my laundry room (ok! $300) makes me so happy every single time that I walk in there – like 5-times-a-day kind of happy. That was worth it. The Kombucha brewing kit is stabbing me with guilt every time I walk by the barely-opened box.)
  • Where do I feel financially disconnected or dis-integrated – not falling apart disintegrated but not integrated, not connected, disjointed? Make a list, really. Writing it down gets it out of your head and into the light of day so that you can do something about it. Take the stuff you feel yucky about and write it down. The act of being honest is one of integrity (character kind of integrity) that will make you feel great about yourself. It is also one of honesty and wholeness. Embracing your greedy spoiled brat is an honest (if not particularly attractive) quality. Most of us have one so admitting it is the first step. Mine is super materialistic and demanding, ever-present, and quite vocal. I wish I could cultivate the minimalist mother-earth part of me that I know is in there, but she is quiet, shy, and probably off meditating somewhere while my spoiled brat is surfing amazon.com with my credit card. (Sigh – this is a never-ending inner battle).

 

True Confessions

When we live with integrity we are an integrated, complete whole rather than a dis-integrated, crumbling array of conflicting parts. Brian Johnson (aside – if you don’t know Brian, go to optimize.me – you are in for a treat! The quote above is from one of his Philosopher’s Notes ~ awesome!!)

  • Where do you feel like a “crumbling array of conflicting parts”? Just admit it. Write it down and stay honest.

Now that you have ‘fessed up, just stay present with how you feel about this. It is really ok and completely human to be a bit of mess in some areas (or so I tell myself.) We are pretty on top of it most of the time so allow yourself to have a few areas that you are working on. If you do feel a bit dis-integrated and disjointed, ponder it. Ask yourself, “what is one thing that I can do right now to become more integrated, more whole, more connected to my truth?” Now. Do. It. Do that one thing. You will feel so good, so happy, so proud of yourself, that maybe, tomorrow, you will do one more thing. Yep, you know – just do it.

To your financial success (and integrity)!

Tana

The Tax Man Cometh

I like to pay taxes. With them, I buy civilization.”  ~ Oliver Wendell Holmes Jr.

I can’t say that I like to pay taxes, but I hope his conclusion is accurate! Perhaps taxes do buy civilization but regardless, they do buy our freedom. Freedom from jail for tax evasion, that is! I guess they buy our freedom in the greater sense as well since they pay for our military. That part I can get behind and perhaps feel less horrible about the large dollars that go out of my house every year in taxes.

But this is not about how you feel about paying taxes. It is your reminder that it is almost April and April brings the tax deadline. Here are a few reminders for you:

This year, you actually have until April 18th to file and pay your taxes because of Emancipation Day falling on Monday and the 15th falling on Saturday. However, don’t wait around for the 18th to get your taxes going.

The April deadline also marks the deadline for making IRA contributions as well as Health Savings Account contributions for those who had a high deductible/HSA health insurance plan in 2016. Extending your tax return does not extend the deadline for making these contributions; however.

If you do file an extension, remember that filing the extension only extends the time to file the return; it does not extend the time to pay so you must make an estimate of your tax liability and pay in 100% of it or be subject to interest and possibly penalties.

If you cannot pay taxes due, don’t ignore it! You can request installment payments of the taxes due. Discuss your options with your tax accountant so that you can take action rather than face additional penalties. The IRS loves to impose penalties so make sure you are on top of your options to minimize the money you will have to pay in.

Make sure you gather up all of your charitable contribution receipts and include everything –$10 here and $20 there adds up. For your noncash donations, keep a list of all of the items donated and use a site like: https://www.goodwill.org/wp-content/uploads/2010/12/Donation_Valuation_Guide.pdf to come up with the value per item. You should keep this list with your tax records.

I am often asked by clients how long to keep tax records. The answer, like answers to most financial questions, is “it depends.” Here is how the IRS responds to that question: https://www.irs.gov/businesses/small-businesses-self-employed/how-long-should-i-keep-records

(Although the reference says small business, it is the same for employees.) It is a good practice to clean out your records each year after you file this year’s return. Go through the old records and be sure that you don’t need the record for some other purpose besides taxes. And definitely, make sure you shred all documents when it is time to get rid of them! If you don’t have a shredder, many organizations host shredding events (frequently for charities) around tax time so search for locations where you can shred.

Taxes are never fun but round up those records and get it done. You’ll feel better once you have tackled the task. And maybe you can be like Oliver and enjoy the fact that you are supporting civilization.

To your financial (and tax!) success,

Tana

Are you in danger of the Five Buck Syndrome?

I have talked about the “5 buck syndrome” before, many times. I have written about it and yet, this week, I did a lot of “5 bucking.” From app purchases to the shopping cart at the grocery store to online shopping’s lure of “only $10 more dollars until you qualify for free shipping,” the pull to separate us from that 5 bucks is strong. And yes, I fall prey to it as much as anyone so I write this to remind myself as much as to remind my readers that 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?” Also 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.

At holiday time, it is especially tempting to add volume to our gift-giving. More presents for the kids to unwrap, more stocking stuffers, more food around the table, more treats to take to the office. This year, treat yourself to that 5 bucks and rest assured that the gifts you’ve picked are enough; the food around the table is enough; and nobody needs more treats at the office!

To your financial (and holiday) 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

To Insure or Not, That is the Question

Long-term care insure, that is. For anyone in the tween generation who is caring for both children and aging parents, the answer is a resounding “to” when it comes to having our parents own a long-term care policy. What a help it is! What a difference it makes! My mom came home from an extended stay caring for her father prior to his death and bought a policy without a thought as to cost – “I want one, right now” was her comment. She was mid-60’s, healthy, and could afford to get one. It was a no-brainer.

For those of us younger, or less financially able to swallow the costs of those premiums while we are paying mortgages and college tuition, it is more of a struggle. The guys tend to say something like, “just take me out and shoot me.” Well, I get your motivation there, and I feel the same way if I am incapable of taking care of myself, but those logistic are a bit complicated and more than a little illegal. Yes, if your spouse shoots you, neither of you have to worry about long-term care as the penal system will take care of that! However, for those looking for a more law-abiding (not to mention humane) solution, long-term care insurance is the way to go.

If only we knew exactly when we would die, this planning business would be so much easier! Will I live to 100 and be fit as a fiddle and sharp as a tack or will I be healthy and mentally mush? Which one of us will need care and for how long? Where is that crystal ball?

The reality of long-term care insurance is that it is better to have it than not. After age 76, you cannot get it. After a “bad” diagnosis, you cannot get it. If you have some bad family history, you really need to talk to an agent sooner rather than later if you want to get it at all. The other reality is that the younger you are when you buy it, the lower the initial premiums will be, but you will be paying them for a longer time (hopefully!)

Once you dip your toe into the 50’s, it’s time to start asking the questions and evaluating the answers. I’m 52 and the mere thought that I am old enough to be thinking about this is crazy – 50 is the new 40! I take care of myself! I feel great! I am way too young to talk about “old people” stuff! And yet, it is one of those things I really should do. Not that I need to buy today or a year from now, but I do need to start the conversation with an agent, get some quotes and understand the cost difference at 52 versus 55 versus 60 so that I can plan for when to pull the trigger (not that trigger; the long-term care insurance trigger!)

Now, a quote today for a 60 year-old is probably not going to be the quote when I am actually 60 so I need to keep that in mind in the planning but it is important to start thinking about those premiums and planning for the day that I need to pay them. I do not want my health care to derail my kids’ financial lives, and as much as I want to be a gazillionaire by the time I retire, it is looking like I might come up a little short so insurance is probably the way to go.

How about you? Do your parents have it? Are they still at a point where they can get it? Is it worthwhile for the kids to pitch in to help pay the premiums and make sure they have something? Take a few moments and look at yourself and your parents and really think about the impact a nursing home stay would have on the family assets. Now is the time to plan for that. Once it happens, you are on your own.

If you do take the plunge, the company you choose is one of the most important decisions you can make so do your homework and check the insurance ratings to get a solid company that you will be able to count on in the far away future when you need them.

Are You Ready for One of Those Months?

It started with a text from my neighbor, “are you home?” uh, oh. My mind is racing, “was I home last weekend? Kids have a wild party? Hit their mailbox? Tree fall in their yard?” When we met at our side yard, it was worse than that, “I think this river of water is coming from your house.” Yep, it was, and $2,000 later, I had a new water main coming in to the house and a $270 water bill. Thankfully, I got some relief on the water bill.

[Quick aside: Did you know that the water company has a “leaks adjustment” department? I didn’t, but I do now. Good to know. You email them a copy of the repair bill and they look at your water usage history and (hopefully) give you a credit for the cost of the water that cascaded into your neighbor’s yard. Nice. Every little bit helps.]

Strike 2 came a week or so later, when my son walked up the stairs on a Sunday afternoon and said, “bad news.” That one was a $6,700 car repair bill for coming around a curve and running over a construction pipe encased in cement that was in the middle of the road. “Mom, it was either hit an oncoming car head-on, go into a ravine filled with trees, or try to clear the pipe.” Thankfully, he tried to clear the pipe but …. Thank heavens my son is ok and that insurance is covering all but $1,000 of the repairs. Still, it’s $1,000.

Strike 3 is a longer story but suffice it to say that it added $5,000 to the outflow. That’s a pretty expensive month at my house! Seems like things come in threes but usually the not so great things. Next time, I would like a three-pack of scratch-off tickets that strike gold, please! (Actually, I would be ecstatic with one!!)

There is no use crying over spilled milk or thousands of dollars of repair bills so what can you do but look at the bright side and start to rebuild the emergency fund. Speaking of emergency fund, now might be a good time to review your emergency reserves before you have a month like I did:

  • Do you have enough money in cash to cover any deductibles that you have for your house or your cars? Do you even remember how much the deductibles are? Best check now when all is clear. If it’s too high, you may need to save up or call your agent. If it’s too low, you are over-spending on premiums.
  • What about deductibles on health insurance? A big, bad medical emergency can add up quickly so be sure you know what your plan would cover.
  • What big ticket items around your house might be dying a slow death? I once had 2 air units within 6 weeks of each other. That hurt. Furnace? Water heater? Appliances? Think about the big items that are getting old and create a plan to address them (or at least set aside money for them) before you are shivering on that first cold night of the winter when the furnace is MIA.
  • Look at those cars – how’s the maintenance been on those? How many miles have they logged?
    • Start planning and saving now for that next car replacement. If you aren’t paying cash for your car purchases, it’s time to start making a plan to do so.
    • Does your auto mechanic have a credit card that gives you six months with no interest? Tires Plus has one, and believe me, with 6 older cars in the Gildea auto pool, I always seem to be paying off some repair.
  • How long would your savings cover if you or your spouse lost a job? Three to six months is recommended.
  • Think back on some of the “bad months” that you have had in the past. Are you prepared if any of those things should repeat?

I really hope that the things that come in threes for you are the happy, cash-in types, but just in case, shore up your emergency fund and make sure you are ready. Here’s hoping next month is great one for all of us!

To your financial success!

 

 

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!

Where are you in your half-time?

We are past the halfway mark for 2016 and perhaps you are shaking your head in wonder as I am. At halftime, teams gather in the locker room and assess what went well and what has gone awry so I recently sat down to do the same.
To be honest, I am not so thrilled as home improvement projects have gone beyond the home improvement budget at the same time as other large expenses have seemed to pop up. Isn’t that always the way it goes? What’s a gal to do except sharpen up the pencil and see what can be cut back and reworked to get back on track.

The Tana of old would have been more likely to use the old dieter’s refrain, “I’ve already blown it so who cares?!” and go forward letting my savings suffer. But the older and well, just older, Tana is determined to begin a new and still make the budget work with quite a bit less of that and even less of the other.

How about you? How are things looking at your halftime? Are the savings on track? The net worth a bit better? Is your spending where you want it to be? I hope so. I hope the income is better than imagined and the expenses lower but just in case it is not, try, try again. See where you can sharpen up the pencil and make do with what you have for a while until the numbers line up in a way that makes you feel good.

There is an ebb and flow to the seasons and the days and the money and if the flow is going the wrong way, now is the time to shore things up and get back on track. Good luck to all of us in “shore up” mode and to all who are well ahead, good job – keep it up; you are halfway there!
To your financial success.

Whoops – Why Did I Do That?

Some mistakes involve doing things we wish we had not done. It happens, but if it happens and happens and happens again, it is probably time to take a closer look at what’s going on. Consider the following whoops areas and see if you fit one:

  • Heat of the moment – you know, at the concert – woo hoo! This is awesome – I’ll buy a shirt and a CD and one of those, and it’s a special night, how about another drink or dessert? If you are consistently caught up in the moment and Good Time Charlie has gotten away with your money again, you may want to make a plan ahead of time and take cash. When it’s gone, you are done.
  • It was a bad day – hate your job, fight with your ex, kids are driving you crazy and rather than “Calgon, take me away,” it’s amazon.com or the mall that takes your money away. Your brain is looking for a little feel good buzz and new shoes are just the ticket… until the bill comes and then regret is your middle name. If you are an emotional spender, admitting it is the first step. See that pattern and realize that you are looking for a distraction and something to make you feel better. A new gadget is not the best answer. Perhaps address the issue – get out some good paper and pencil and write down your feelings. Address the angst by analyzing the problem and coming up with some solutions. Get outside and get some exercise. Exercise is a better feel good medicine than all the shoes in the world and if you walk in nature, you have the added benefit of the restorative power of trees, birds and the wide open sky.
  • “If I only had ______, than _____” – oh, the lovely lies we tell ourselves! “If I only had a new laptop, then I could write that book.” “If I only had a bigger house, then I wouldn’t fight with my husband.” This is expensive if we go for it and a mirage if we don’t. This thinking is actually dis-empowering because we give the power to the shiny object rather than to our abilities to solve the problem. Reverse that thinking, “Even though I don’t have _______, how could I still _______?” This gets your creative juices going, takes back your power, and saves your wallet. No more regret when the laptop or the house was not the issue in the first place.
  • Fall for the “sale” – whether it is a sales guy preying on your fear of missing out or the banner in the store window, a sale on something you don’t need, is not worth falling for. Think back to all the things that you “had to have.” How many of them really became treasured items? Probably not many. Here is a great place for procrastination – wait until tomorrow and see if you really have a burning desire. You probably won’t.

These are just a few of the situations that cause us regret over actions taken. As you read through them, it may hit the nail on the head or it may remind you of other patterns unique to you. Regardless, identify the pattern, understand the trigger, and make a plan to fight back next time. Keep a journal of those regrets if you don’t immediately identify your pattern. The key to solving the problem is to recognize it and then you can focus on taking steps to avoid it in the future. In the meantime, forgive yourself and harness the power of that regret to take a new action which leads away from the pattern of regret and into the pattern of control over your responses. You’ll feel a whole lot better saying goodbye to regret.

To your financial success!

The Energy of Money

Today and during the week, I want you to think about your relationship with money and financial topics. Every time you pull out your wallet, look at money, pay bills or think about anything “financial,” whether at work or in your personal life, pause and think about how you feel, in your gut, at that moment. Make a note in your phone or notebook without judgment but with curiosity.

Pull out a journey or notebook and answer these questions:
*  When do I feel bad (guilty, anxious, afraid, uncertain, inadequate, lacking knowledge) about money?
*  How do I react in these situations?
*  How would I like to react in these situations?
*  What financial topic am I the most uncertain about?
*  When do I feel good (confident, knowledgable, sure of myself, competent, in control) about money?
*  What have I done in the past to lead me to this good feeling?

Other questions, thoughts and memories may come up as you think through these questions. I encourage you to let them come up, explore them with curiosity and to try to let go of judgments and condemnations. If you wouldn’t make the comment out loud to a friend, don’t allow yourself to say it to yourself in the silence of your mind!

In the coming weeks, we’ll explore some of these questions and consider how that energy, good or bad, positive or negative, impacts your dealings, your relationships and your interactions with money and money matters.

To your financial success,

Tana