Financial Planning

February is Often a Month Full of Relationship Talk.

Healthy money relationship? (graphic) | Curtis Financial PlanningFebruary is often a month full of relationship talk. We talk about what a healthy relationship looks like, what a healthy self-view while you’re single looks like, and the best heart-shaped-recipes to cook on February 14th with your significant other. But I want to talk about the significant other in your life that nobody wants to talk about: money. …

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Why Do We Procrastinate about Finances?

Have a financial plan? graphic | Curtis Financial PlanningLet’s face it: life gets busy. Between our professional and personal lives, we often have very little time left over to work toward big-picture goals, and some important things end up getting neglected.

Personal finance is something that’s easy to put on the back burner. I hear it from clients all the time:

I only have $200,000 saved for retirement and I’m already 62 years old!

I’m co-signing all of my child’s student loans, and I realized I’m nowhere near as close to paying off my existing debt than I thought I was!

Many people think about working with a financial planner for years before they take the leap. And honestly? It often takes a crisis or a large life change to shift them to a place where they’re ready to set up a consultation.

Why Do We Procrastinate?

If the above description sounds like you, don’t worry! You’re in good company. It turns out procrastination is a big part of most people’s lives. There are several reasons we don’t knock stuff off our to do list before it’s a pressing issue. When it comes to your finances, there are a few main reasons we put off planning:

  • The task is unpleasant.
  • Our finances cause us anxiety.
  • We’re not sure where to start.

Let’s take a look at these procrastination-causes, and how we can work through them to get a jump on your financial planning.

Viewing Finances as Unpleasant

It’s not a secret that there is a taboo that exists around money. In general, people don’t love talking about it – or thinking about it. Oddly enough, though, this taboo primarily exists in the United States. Elsewhere in the world, discussing money is seen as anything but gauche – it’s a part of life!

To change this view of money and to motivate yourself to start working on your finances, it’s smart to purposefully alter your perception. When you view money as an entity that shouldn’t be discussed – you give it power.

Instead, try viewing money as a tool to help you live the life you want – whether that’s travelling more, giving more to your favorite charity, or retiring comfortably around family. As soon as you take the power away from money, you realize it’s not unpleasant to try and create a financial plan. It’s actually kind of exciting!

Money Causes Anxiety

If you’re like most people I speak to, you know the value of financial planning – but it takes a personal crisis to move you toward dealing with your finances. This is often because, to put it simply, money stresses us out.

The idea that there isn’t enough money, or that we aren’t moving closer to our money-related goals, is enough to send most people into an anxiety-spiral. In an effort to avoid those negative feelings, we avoid financial planning.

The crazy thing is that if we were to face our fears and create a financial plan that helped us get on track, our money anxiety would dissipate significantly. But because we continue to avoid it, we continue to feel anxious, and the guilt cycle goes on and on.

If money anxiety is what’s stopping you from starting your financial planning journey, there are several things you can do to ease the stress:

  • Try making a to-do list with bite-sized tasks (like calling a financial advisor for a consultation, checking the balances of your assets and debts, or writing down upcoming financial goals).
  • Set a spending budget.
  • Focus on what you’re doing right. Not everything’s bad news! Rather than always beating yourself up about financial mistakes, focus on the big and little financial wins you experience, too!

Not Knowing Where to Start

Often times, it’s a lack of confidence that prevents us from getting started with financial planning. We’re not sure where to begin – and the information that’s available online is daunting to say the least!

Luckily, this financial hang-up is the easiest to fix. Working with a fiduciary CERTIFIED FINANCIAL PLANNER™ can help. As a fiduciary advisor, I have a duty to my clients to provide financial advice that’s always in their best interest. Years of practice and education make a financial planner your best ally when it comes to financial planning.

At the end of the day, you are busy. Carving out time to handle your financial planning alone can be incredibly intimidating. I’d like to help. We’ll work together to get you started on the right financial path, set meaningful goals together, and strive for success. Contact me today to set up an introductory phone call. I’m excited to hear from you!

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Your New Year Financial Checklist

New Year | Financial Checklist, Curtis Financial PlanningNew Years is an exciting time. It’s a moment filled with hope. We spend time with the people we love, realign ourselves, and refocus on what’s truly important in our lives. For some, this can inspire them to make some positive life changes in the coming year.

We’ve heard all the typical resolutions – exercise more, eat better, learn a language, pick up a hobby (just to name a few). But what about your finances?

Although setting financial resolutions may not be practical, starting your year with a financial checklist can help you get moving in the right direction. I’ve taken the liberty of designing this one. It’s fairly short – just five “to-do’s” long. Some things will be easy to knock out in a few minutes – while others might require some introspection.

#1: Setting a Budget

If you don’t already have a budget for yourself, the start of a new year is the perfect time to get started. I like to look at budgets as more than just dollars and cents – they’re a tool to help you reach your goals and find joy.

In my ebook, Happiness Spreadsheet, I talk about how mindful spending can help you achieve a more fulfilling life. A budget can help you set some guidelines in place that ensure you have the non-negotiables covered (like food and shelter), are working toward paying down debt or building savings, and still have something left over to spend intentionally.

#2: Setting Attainable Goals

Of course, you can’t have a budget without goals to guide it. Many people set big financial goals during this season, but I’m going to suggest you try something different. Instead of setting a goal that’s impossible to achieve – set a few, bite-sized ones instead.

If you start working toward a huge goal that’s impossible to reach, you’re setting yourself up for failure and disappointment. Having negative feelings tied to positive financial goals is never a good thing – and can often deter you from making progress.

For example, if you have a heavy debt load, you may not be able to become debt free this year. But you can work to pay off a large portion of it – and that’s something to be proud of! Set a handful of goals for yourself this year. Don’t be afraid to get creative! Money is a tool that can be used to amplify your happiness – set goals that reflect that.

#3: Organizing Taxes Before Filing Season’s Rush

Raise your hand if you’ve ever waited until the last minute to file your taxes. It’s not a great feeling. Instead, take the time to get yourself organized in the first few months of the new year so you can knock out your taxes early. You’ll get your tax refund sooner, and you’ll be able to check this often intimidating task off the to-do list. You don’t need to stress about getting them filed too early, though. Remember that your employer, banks, and other financial institutions have to get you the paperwork you need first.

#4: Review Retirement Plan Contributions

If you’re already contributing to a workplace retirement plan, that’s wonderful! The new year is a good time to check where you stand in comparison with your retirement savings goals and adjust your contributions as necessary.

You can also consider upping your retirement savings game by contacting a CFP® about additional savings options – like a Roth IRA.

#5: Create a Debt-Pay-Down Plan

Are you currently shouldering debt? Being in debt can make your financial life challenging. More importantly, it can have a negative emotional and psychological impact on you as an individual. Being in debt forces you to put off short and long-term goals, and it can damage your credit score. In short — the faster you can get your debt paid off, the better.

Although it might not be possible to pay it all off immediately, making a plan of action can help put you back in the driver’s seat of your financial life. Take this opportunity to assess your debt, and create an easy-to-implement strategy to make paying it off a priority.

A Focus on Finances For 2020

Whether you choose to tackle all of these tasks at once, or you want to take it one step at a time – find a pace that feels best for you. The most important thing is to continually make progress in the right direction.

Of course, if you ever need help or want to talk — reach out to me! I’d love to hear from you and help you work toward building a financial life that supports your dreams.

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Why You Need A Financial Plan

There are a few times a year when the volume of calls to my office from people seeking financial advice goes way up. One of them is in January when New Year’s resolutions are top of mind and another is the 30 or so days leading up to the tax deadline in mid-April.The “January effect” arises from a wish to get a fresh start on financial planning; the “tax effect”  has to do with figuring out how to pay less to Uncle Sam.

But most people would be better off if they didn’t wait for a deadline or time of year to take a hard look at their finances. Financial planning can be compared to being proactive about your health – we’re way better off maintaining a healthy lifestyle than waiting for a medical crisis to change our habits! Same goes for your finances. Making smart financial choices early and often will ensure a strong financial future.

For sure, meeting with a financial advisor isn’t always the easiest thing to do. It’s hard to talk about money especially if you feel “clueless” (not my word, but a word many women use to describe their financial savvy) or embarrassed about some of the financial decisions you’ve made in the past. But a good advisor doesn’t care about any of those things; they want to objectively help you make good financial decisions going forward.

When I ask a potential client why they contacted me, here are some of the most common answers:

  • I want to retire early and do something different with my life. Can I afford to do this and how soon can I do it?
  • I am retiring in 5 years and I have no idea if I’m on track.
  • I want to buy a house and I need to know how much to save and what I need to do to qualify for a loan.
  • I am afraid to invest my money in the stock market because I don’t trust it, but I’m not earning any return on my money in the bank, what should I do?
  • My father (or mother) just passed away and left me some money. I want to make sure that I make the right decisions with this money and need help and a plan.
  • I want to send my kids to private schools but they are expensive. I want to know if I can afford it and save for other goals like retirement.
  • I’m single and I don’t want to rely on anyone else for my financial health, I want a plan to reach my goals.
  • I’m going through a divorce and I worried about my financial future.I need help figuring it out.
  • I make a great salary but I spend too much. I want help to set up a budget, reign in my spending and start saving and investing more.
  • My spouse/partner passed away and I’ve never managed the finances alone. I need someone I can trust to help me.

Some of these situations are like a medical crisis – “oh my gosh…I’m retiring in 5 years and I haven’t saved enough money!”, others are unexpected, such as a divorce. But all share one thing in common: all situations will be less stressful and better managed with financial education and a plan.

Photo by Teerapun/

Editor’s note: This post was originally published on April 7, 2014 and has been updated and refreshed.

Related articles:

Do You Need A Financial Advisor?   Investopedia
Six Important Steps to Hiring a Financial Advisor  Forbes


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How to Prepare For An Encore Career

Ready for a career change?

More and more people are rethinking success at midlife or retirement, and considering a shift to more meaningful, purpose-driven work. More and more people are rethinking success at midlife or retirement, and considering a shift to more meaningful, purpose-driven work. Combining a desire for social contribution, entrepreneurial passion, a job that’s not-just-a-job, and – often – continued income, encore careers are an appealing fresh start. Whatever your encore career goals, these strategies can increase the odds you’ll reach them.


Another name for an ‘encore career’, many Americans are looking for work that is more than a ‘job’; a meaningful expression of what you have to offer the world.

There are several encore variations I see with my clients: those mid-career corporate professionals in search of a more fulfilling focus, and folks at retirement age who want to stay engaged and do meaningful work. Continued income, social impact, flexibility, pursuing a passion – second-act careers have many different motivations.

Here is a great place to start: what would you answer to the ‘Tell me about yourself’ interview question? Your response will help uncover the values and priorities that we often don’t pay enough attention in our day to day life. And then ask a friend: ‘What am I best at?’, for more insight (and possibly a few surprises).


This is the time for self-assessment. What skills, talents, and strengths have made you successful in your professional career? Can you repurpose your corporate skills? What ignites your fire? Do you want to continue working for a paycheck, a passion, or both?

Explore new opportunities while still employed, if possible: research, research, research; do informational interviews; volunteer; take a class or consider an internship. Knowledge is power.


Find a like-minded group – whether a casual meeting of people volunteering in the arena you find interesting, or an established organization or professional group.

The feedback you’ll get from your network will provide motivation, expertise, and experience, as well as the invaluable contacts you will want as you consider a career move. (And if you aren’t already harnessing the positive aspects of social media, now is the time to dive in! It’s an effective tool, and one you might find valuable in your ‘second act’.)


If you are leaving a corporate career to pursue more meaningful work, or if you are nearing retirement and want to embark on a fulfilling new chapter — be prepared!

Before you embark on a major life change, outline the specific outcomes that could result, and develop the plans to get there. Inspiration and passion are a starting point, but sustaining a change will require planning and adaptability… two things most of us have learned a lot about by the time we are considering an encore path. Take advantage of your life experience for real motivational mojo.


A survey recently found we are less comfortable talking about money than death. I want to change that! Given that the average encore career transition takes about 18 months, and 67% of those ‘transitioners’ had reduced (or zero!) income during that time, we need to redesign our approach to thinking about – and talking about – money.

Planning with your financial advisor ahead of your career transition will prepare you for the practicalities of pursuing your passion, and can help strategize ways to make the math work during your encore career. And, while some encore careers are the intended result of long-held dreams, others come on the heels of an unexpected job loss.

Planning ahead makes even an unplanned career change an opportunity, rather than a misfortune, allowing you to move forward with the confidence that a solid financial plan provides.

You Need Not Reinvent Yourself

The encore career movement has become a mainstream conversation, including books, conferences, consultants, and coaches. You needn’t reinvent yourself for your second act; instead focus on the expertise, skills, experience, and passion you have – and how your talents can lay the foundation for your encore career.

Do you want to manage your money (and life!) better?

The Happiness SpreadsheetIf you want to think differently about the relationship between your spending, your values and your happiness, then sign up to get your FREE copy of The Happiness Spreadsheet.

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Cultivating a Healthy Relationship with Money

Cultivating a healthy relationship with money is the foundation of a rich and happy life. Just like any other relationship, for your money to prosper and grow, it needs attention and care.

You don’t want to smother it with worry and fear, but you also don’t want to be neglectful. You need to get to know it, love it, and not be afraid to let it go, if you strike the right balance, it will always be there for you.

A little understanding goes a long way in our relationships, and it’s the same for money.The first step to understanding money is to figure out how much you need to live your life the way you want.

You can spend your whole life pursuing more money, or you can figure out what it takes to live and be happy. Money is a tool to fund your life – when you think about money as a tool, it’s easier to plan.

How much do you need?

How much money do you need to meet your financial obligations and commitments: the mortgage, the rent, your other fixed bills, your medical insurance, your kid’s education? How much is an important number because you if you can’t afford your basic lifestyle, life becomes one big worry about money.

Next comes regular saving. This step is hard. It trips many people up. It usually involves delayed gratification, and we don’t like that. It also involves investing. Investing can seem scary and complicated. But we must save for the things or experiences we want soon and in the future, and we must invest or our money will lose value due to inflation.

Retirement is the most daunting savings need of all because it involves large numbers and lots of assumptions – assumptions regarding our longevity, health, returns on investment, interest rates, to name a few. For most of us, social security is the only source of income we will have in retirement besides our savings. For this reason, saving at least 10% of income each year and more if behind is critical.

After you understand how much money you need to cover your emergency fund, your necessary expenses and your retirement savings, then you can focus on what else you want to create a rich and happy life. A healthy relationship with money means knowing that you can’t have everything. Instead, you figure out what in life brings you the most joy and satisfaction, and you prioritize those things.

You will know you have achieved a healthy relationship with money when you worry less about it and start feeling good about how you are spending and saving it. Get started working on this most important relationship now for a happier future.

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How To Deal With Those “Old” 401(k)’s

ID-100264449There’s no shame in having multiple 401(k) accounts — it’s an indication that you’ve been committed to saving for retirement  over the course of your work life.  However, what may give you a justifiable twinge of guilt is ignoring them.

If you are guilty as charged, you’re not alone. Half of the people who change employers leave their 401(k) money where it is, according to an ING Direct survey. The result: “15 million orphaned 401(k) accounts representing more than $1 trillion.” For some, this is an OK option. For many, it’s not. Read on for ways to deal with those “old” 401 (k)’s:

Keeping the 401(k) With Your Old Employer

It is probably better to move your 401(k), either into a traditional IRA, a traditional 401(k), or a Roth 401(k) — mainly to avoid the out-of-sight, out-of-mind issues. But it may make sense to leave it where it is in these situations:

  • You like the investment options your old employer offered, and have been happy with the performance.
  • You are aware of the associated costs and fees and they seem reasonable.
  • Your former company doesn’t require that you move the account due to a low balance (usually $5,000 or below).
  • You don’t have the time or inclination to decide where to open a rollover individual retirement account and how to invest it. Many 401(k) plan agreements require the investments within them to be sold and placed in cash before the funds can be rolled over into a new account. Your balance would stay in cash for awhile, earning little, if you’re not prepared to reinvest it now.

Options for Moving Your 401(k)

You can roll over a 401(k) to a self-directed IRA at many brokerage firms.  You can then manage this transaction yourself or with the help of a financial adviser. Or, if your new employer will accept rollovers from a previous company plan, you can roll your old 401(k) into your new employer’s 401(k) plan.

In both cases, it’s a very simple transaction:

  • Ask the plan administrator at your previous employer company for a 401(k) rollover form. Check the boxes and fill out information for a direct rollover to the new IRA custodian or new 401 (k) plan. If there is a question about tax withholding on the form, be sure and check that you don’t want tax withheld. Most companies will conduct this type of direct trustee-to-trustee transfer, which means you won’t have to handle the money. However, some companies will send checks made out to your new custodian in care of your new IRA or company plan.
  • In the meantime, if you are rolling over to an IRA, open a new like-kind (traditional or Roth) IRA account at your chosen custodian. If you are rolling over to your new company plan, make sure you have enrolled in the 401(k) plan and have informed your employee benefits administrator of your intent to roll money into the plan. In both cases your account balance should be transferred within the month.
  • If instead, an eligible rollover distribution is paid to you by check, (referred to as an indirect rollover), you have 60 days from the date you receive it to roll it over to another eligible retirement plan. Any taxable eligible rollover distribution paid from an employer-sponsored retirement plan to you is subject to a mandatory income tax withholding of 20 percent, even if you intend to roll it over later. If you do roll it over and want to defer tax on the entire taxable portion, you will have to add funds from other sources equal to the amount withheld.

What you don’t want to do is cash out your old 401(k) accounts — meaning you don’t want to remove the money from them in a way that costs you its tax-deferred status. With a traditional 401(k), If you are younger than 59½, you will pay income tax plus a 10 percent penalty on the withdrawal. If you are older than 59½, you will owe income tax. With the Roth 401(k), you would not pay tax on your contribution amounts, but any gains or earnings would be taxed the same as a traditional 401(k) withdrawal. Letting the accounts grow tax-deferred is the best option for growing your retirement nest egg.

Image by Stuart Miles

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The Solo-K: Smart Retirement Planning for the Self-Employed updated for 2018

Solo-k Smart Retirement Planning Self-Employed

Solo-k Smart Retirement Planning Self-Employed

In 2001, the government gave self-employed workers a gift: a 401(k) plan that allows for greater amounts of tax-deferred income with less hassle to set up than any other retirement plan.

The plan, mostly called a Solo 401(k) or a Solo-k or one-participant plan beats traditional corporate 401(k)s in higher savings limits and in the ability to invest in a variety of options. With this plan, you are both an employee and an employer and make contributions for each.

You are an excellent candidate for a Solo-k if:

  1. You are a business owner or self-employed person.
  2. You have no employees, except for a spouse.
  3. You can and want to save a lot of money in certain years. You don’t have to make the same level of contribution
    every year.

Contribution limit

Up to $55,000 in 2018 (plus $6,000 catch-up contribution for those 50 or older) or 100% of earned income, whichever is less.

  • In your capacity as the employee, you can contribute up to 100% of your compensation or $18,500 (plus that $6,000 catch-up contribution, if eligible), whichever is less.
  • In your capacity as the employer, you can make an additional contribution of up to 25% of compensation.
  • There is a special rule for sole proprietors and single-member LLCs: You can contribute 25% of net self-employment income, which is your net profit less half your self-employment tax and the plan contributions you made for yourself.
  • The limit on compensation that can be used to factor your contribution is $275,000 in 2018.

All contributions are pre-tax. If you take withdrawals before age 59 1/2 tax is due as well as a 10% penalty. You must take RMD’s (Required Minimum Distributions starting at age 70 1/2.

Spouse element

If your spouse works in the business, you can potentially contribute up to $55,000 plus catch-up if age-eligible, doubling the contribution.

Other things to know:

  • Once the 401(k) reaches more than $250,000 you have to file paperwork with the IRS.
  • You can open a 401(k) at almost all custodians.
  • The contribution limits are annual, per person, so if there are other 401(k)’s it will limit the solo-k contribution.
  • You can also choose a solo Roth 401(k) which follows most of the same rules as the Roth IRA (except for the income limits, there are no income limits for a Roth 401(k).
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Real-life Financial Stories: Student Loan Debt

Student Loans by Age graph

Student-loans-by-ageI’d like to introduce Erin Fleming McCloskey. Erin is just starting her career as a financial planner. She passed the CFP examination on the first try which is something to be proud of as the pass rate is about 63.5%.  Lucky for me, Erin is a paraplanner with my firm, Curtis Financial Planning, LLC.

Erin was born at the tail end of Generation X/beginning of the Millenials, a generation generally attributed with the following traits: highly-educated, tech-savvy, self-confident and ambitious. Unfortunately, this generation was also born at a time when costs of higher-education reached new heights. Just last week, the  Federal Reserve Bank of New York announced that outstanding student debt again topped $1 trillion in the fourth quarter of 2013, second only to the pool of debt behind mortgages.

Student loan debt has tripled in a decade, actually faster than medical costs or 500% since 1985.  Seven in 10 college seniors who graduated in 2012 had student loan debt, with an average of $29,400 for those with loans. The national share of seniors graduating with loans rose from 68 percent in 2008 to 71 percent in 2012, while their debt at graduation increased by an average of six percent per year.

This debt crisis not only greatly affects the quality of life of an entire generation, it has a huge impact on the economy as Millennials delay living on their own, buying cars and homes and starting families.

Erin has many of the traits that are attributed to her generation, and yes, she is paying off her student loan debt. Here is her story:

Q & A With Erin

Q: Where are you in the process of paying down your student loan debt?

A I graduated “undergrad” in 2002 and then “grad” school in 2007 and have only been paying my loans for the past 4 years due to deferring in those years of grad school or gap years of financial hardship.  

I went to a private university for undergrad and had financial aid (no scholarships for merit because everyone would have deserved them) and my parents did PLUS loans as well. I had no money from savings/529 plans/grandparents for college. I took loans for whatever I couldn’t cover from the maximum  financial aid package I had.

I owe $32,000 now on those loans (they grew for several years while I deferred payments and now I’m paying on them). For grad school, I went to a state school and only racked up $5000 in debt.

Q: Are you also contributing to a retirement plan (401(k), IRA)?

AI am married (file jointly) and we contribute to an IRA –> Roth rollover for me each year. (Income is too high to directly do a Roth contribution for me).

Q: How do you prioritize your long term savings and paying down student loans?

A: Fortunately I have money saved to pay my loans currently, and out of my husband’s salary, we save for retirement.  My goal is that by the time my saved money from my last job runs out, I will be earning enough to keep paying my loans down myself.

Q: Do you have private loans or government loans?

A: I have government loans and private loans.

Q: Did you consolidate your loans?

A: My loans are consolidated, and the interest is around 2.5%, so I am in no hurry to pay the balance ahead of schedule.

Q: Have your found a way to improve your student loan situation?

A: I did consolidate and I believe my current rate is the best I can get. I’ve had this rate for 5-6 years.

Q: Can you recommend any resources, apps, tools that have helped pay down loans?

A: Yes, for advice and consolidating

Q:  To what extent are your student loans affecting your life and the decisions you’re making?

A: The first time I realized that the loans were real and I owed money was when I came back from my first year after college that I’d spent in service abroad. I didn’t realize I needed to start paying on the loans after the grace period and since I wasn’t having my mail forwarded across the globe, I missed out on the reminders. So, I came back with my credit score ruined for the next seven years. 

Fortunately, by the time I was married and trying to buy a home my record was clean again. Having loans to pay did also stop me from leaving the country to be a backpacker for TOO long at a time; always had to come back and pay my minimums.

I am fortunate that I don’t have to worry about paying them, since now I am married and can take advantage of the second income.  I think the real difference to me now is that we have a 2 year old and we’ve already started saving for her college because I don’t want her to be in the same boat as I am with owing so much.

I’m also going to take advantage of technological/educational advances by the time she is out of high school and do a real cost/benefit analysis and see what education she can do virtually and for free.

I am sure that my education and life experience were worth the cost, but I do want to do my best to assure the investment will be worth it for my daughter and make sure she has good advice and career counseling when the time comes.

Q: When you are done paying off your student loans, what will you do with that freed up cash?

A: Probably give some to my daughter during her starting-out years, and otherwise use it to max-out retirement savings if needed and after that, PLANE TICKETS!

Q: If you could start over, would you choose the same education and loans?
A: Absolutely! My college experience was totally worth what I’m paying for now. I just wish I’d not made the mistake with missing out on my first 8 payments or so.

If you are interested in learning more about how you can tackle your student loan debt, join GoGirl Finance, Bicycle Financial and me for a twitter chat on February 26 at 5:30 PST, 8:30 EST. Use the hashtag #SavingsChat and join the discussion. More details can be found here: #SavingsChat: Managing Student Loans and Saving.

 Additional articles of interest:

From CNBC:   Repayment Strategies for Your Student Loans

From The New Republic:  When Millenials Can’t Move Out of Their Parents’ Basements the Entire Economy Suffers

From US News Personal Finance: Should You Consolidate Your Student Loan Debt?

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Short List for your Finances 2014

listThere are many actions you can take to improve your finances, and that’s sometimes the problem. I have compiled a short list of ideas that can make a real difference in your financial health. Copy and paste this short list into Evernote or other list-making software or  print it out and tape it to your fridge. Then check off the items as you complete them and celebrate with your favorite indulgence – mine would be a piece of high-quality chocolate or a glass of Pinot Noir!

1. Write Down Your Financial Goals. We all know that writing things down makes them more real. Just having ideas floating  around in our heads  doesn’t cut it. Quantified goals are more likely to be achieved, so be as specific as possible as to deadlines and numbers.  For example, “I want to increase my net income by 20% in 2014 through a combination of decreasing expenses and adding new clients,”or “I want to reduce my spending on dining out from $500 to $300 per month.”  Next, you can make a plan to tackle your specific goals.

2. Make a Plan to Tackle Your Goals.
 Big goals can seem less daunting if you break them down into action steps. Take your list of goals and write down a simple plan of action for each. For example, taking the first goal above, an action item could be to review all business expenses from 2013 and determine whether they are 1. necessary 2. you could find a cheaper alternative, or 3. you could get away with spending less. Make a commitment to tackle the action steps by scheduling them into your calendar. 

3. Review Your Retirement Saving Strategy.  Most of us are saving on a regular basis to a retirement plan through our employer or through a self-employed retirement plan, but not all of us are saving as much as we could. Review your current payroll deductions into your 401(k) or your IRA contributions and see if you can increase the contribution amount to this year’s limits. Time is as important as the amount of money you save – it pays to start earlier than later.

If you are contributing to a Roth IRA, congratulations! – you have taken advantage of an excellent retirement savings vehicle. If you follow all the rules, you will only pay tax on the money invested once – before you contribute to the Roth. After that, your contribution and earnings can grow tax free for years.

4. Call your Insurance Agent. If you have been paying your insurance premiums for auto, home, and liability coverage on automatic, take the time to call your insurance agent or shop your insurance to feel confident you’re getting the best deal and your coverage is adequate for your current life situation. You might be surprised to find out that you have been overpaying or are underinsured.

5. Make a Charitable Giving Plan. Giving to needy or inspiring causes is a wonderful thing – the act of giving uplifts us and benefits the recipient. It  can also have excellent tax advantages, so it pays to know the different ways to give. For example, a great way to donate to a charity is to use a Donor Advised Fund (DAF). DAF’s can be funded using appreciated securities rather than cash, the securities are then sold within the fund to avoid the capital gains tax. The tax deduction is taken in the year when the account is funded avoiding ongoing record-keeping.

6. Understand Your Parent’s Finances. As uncomfortable as it may seem, it’s really important to talk to your parents about their financial planning so you know where they stand financially now and when they die. Questions to get answers to:  Do they have a plan to pay for possible long term care expenses? Have they created wills and trusts so that their estate is distributed with the least amount of costs and hassle? Do they have Durable Powers of Attorney set up for healthcare and finances? Knowing the answers to these questions before your parents grow too old will reduce stress later and possibly save dollars.

I’ll stop now and give you a chance to get started on your short list! If you enjoyed this post and found it useful, please let me know by commenting, tweeting it, or posting it on LinkedIn, Facebook, or Pinterest and I will plan to write similar posts in the future.


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