Financial Planning

8 Financially Savvy Ways to Celebrate Earth Day

Earth Day

Earth Day, which we celebrate in April each year, serves as a reminder of our collective responsibility to protect and preserve our planet. However, it’s also an excellent opportunity to evaluate how our personal choices impact the world around us—and our wallets.

Here are eight eco-friendly actions you can take this Earth Day and throughout the year that will not only help the planet but also contribute to your financial health.

#1: Embrace Minimalism

Adopting a minimalist lifestyle involves more than just clearing out seldom-used items. It’s about creating a more intentional and sustainable way of living by emphasizing the efficient use of resources, supporting eco-friendly products, and reducing waste and pollution.

Minimalism also encourages you to buy less and invest in quality, which means spending money more wisely. This can lead to significant long-term savings as you avoid unnecessary purchases and reduce the impulse to buy trendy, short-lived items.

#2: Shop Locally

Another financially savvy way to celebrate Earth Day is by shopping locally. When you buy from local farmers and artisans, you’re not just purchasing goods—you’re making a choice that supports your community and the environment.

Local products travel a shorter distance to reach consumers, which can significantly lower the emissions associated with transportation, such as carbon dioxide and other greenhouse gases. In addition, products from local businesses often require less packaging and are sold in less commercialized settings, helping to reduce energy and waste.

While shopping locally may not directly benefit your finances, it can benefit you indirectly by bolstering your local economy. Indeed, independent local businesses return more than three times as much money per dollar of sales to their local economy than their big-box competitors, according to an analysis by the American Independent Business Alliance.

#3: Start a Vegetable Garden

Growing your own produce can significantly decrease the amount you spend on groceries. For a small upfront investment in seeds, soil, and a few tools, you can cultivate a variety of vegetables and herbs that can be expensive to buy fresh.

Home-grown food reduces the need for long supply chains, which helps lower emissions and decrease the packaging waste associated with retail produce. Planting a variety of crops can also benefit the environment by attracting beneficial insects and promoting a healthier ecosystem in your own backyard.

#4: Use Public Transportation or Bike

Choosing to bike or use public transportation can benefit your wallet, the environment, and possibly even your health. According to data from the American Public Transportation Association, a household can save more than $13,000 annually by using public transit instead of driving.

These alternatives to driving help create more sustainable cities and offer a practical solution to the problems of urban congestion and pollution. In fact, studies show that communities that invest in public transit lower the country’s carbon emissions by 63 million metric tons per year.

#5: Embrace Sustainable Fashion This Earth Day

Choosing sustainable fashion can be a fun and powerful way to celebrate Earth Day and positively influence the environment and your personal finances. By opting for clothing from sustainable brands, shopping second-hand, and participating in clothing swaps, you can significantly reduce waste, lower pollution levels, and enhance your wardrobe without breaking the bank.

According to data collected by TheRoundup.org, the fashion industry is the second most polluting industry in the world, producing 2.1 billion tonnes of carbon emissions each year. Switching to sustainable fashion has the potential to reduce the carbon emissions from textile production by 33%.

#6: Upgrade to Energy-Efficient Appliances

Switching to energy-efficient appliances is a straightforward and impactful way to reduce household expenses and minimize your environmental impact. Modern appliances that are designed to be more efficient in their use of electricity and water can lead to substantial long-term savings and benefits.

While upgrading to energy-efficient appliances can be a significant upfront cost, doing so can save you money over the long term by reducing your monthly utility expenses. Plus, by making energy-efficient improvements to your home, you might be eligible to claim the Energy Efficient Home Improvement Credit, which can be worth up to $3,200 in tax savings.

#7: Consider Investing in an Electric Vehicle (EV)

Switching to an electric vehicle (EV) represents a significant shift toward sustainable transportation. While the upfront costs of EVs can be higher compared to conventional gasoline vehicles, the long-term savings on operational expenses and the environmental advantages often make them a compelling choice.

EVs produce zero tailpipe emissions, which greatly reduces their environmental impact compared to combustion engines. Even when accounting for the electricity generation to charge the batteries, EVs generally have a smaller carbon footprint, particularly in regions where renewable energy sources are prevalent.

From a financial perspective, a 2020 Consumer Reports study found that drivers of EVs typically spend about 60% less per year on fuel costs compared to drivers of gas-powered cars. Moreover, buyers of new electric vehicles can potentially benefit from a federal tax credit up to $7,500, with additional state incentives varying by location.

#8: Install Solar Panels

The decision to install solar panels is an investment that can offer substantial financial benefits and promote environmental sustainability. While the initial cost can be significant, the long-term savings on energy bills and the potential increase in property value can make solar panels an attractive option for some homeowners.

Solar panels generate electricity from sunlight, which can significantly reduce or even eliminate your monthly electricity bills. In many cases, solar panels generate more electricity than the home uses during daylight hours, and this surplus can often be sold back to the grid through net metering, further reducing energy costs.

In addition, you may be able to claim the Residential Clean Energy Credit, which allows you to deduct 30% of the cost of installing a solar energy system in your home. Meanwhile, your home value can increase by as much as $20 for every dollar you save on energy bills, according to the National Renewable Energy Laboratory.

Make an Impact This Earth Day While Improving Your Financial Well-Being

Adopting sustainable practices isn’t just about making environmentally conscious decisions; it’s about integrating habits that make a positive impact on the health of our planet while potentially enhancing your own financial well-being. By embracing these practices, you can actively participate in a global movement toward sustainability while paving the way for long-term financial security.

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S5E7: 6 Pro Tips for Women Buying Cars on Their Own

Buying a New Car

Buying a new car on your own? Here's how to prepare.

In this episode, we’re tackling a topic that’s close to many of our hearts and wallets: buying a new car. Now, this might seem like a straightforward task. But if you’re a single woman or simply buying a car on your own, it can feel like stepping into a time machine.

For instance, did you know in the United States, women buy 62% of all new cars and influence 85% of car purchases? Yet, despite these numbers, many car dealers still seem to be playing by old rules.

In fact, I recently came across a Yale study that’s quite revealing. It found that on average, women are offered higher list prices for cars than men – to the tune of about $200 or more.

So, why is this happening? Indeed, there are probably many reasons for this price gap. However, the bottom line is when it comes to buying a new car, being prepared is key.

On a personal note, I must admit my husband is the car guy in our household. He takes the lead on all our car purchases. Even though I know my way around finances, cars are just not my thing.

But I haven’t forgotten my solo car buying days either. And let me tell you, it wasn’t always a smooth ride.

I’m sharing this because I’ve been there, and I want to make sure you’re equipped with the right tools and knowledge the next time you’re in the market for a new vehicle. So, let’s shift gears and dive into some smart strategies for your next car purchase.

Episode Highlights

  • [02:28] The importance of doing your homework.
  • [04:21] What you can and can’t negotiate when buying a new car.
  • [06:21] How to find out what your trade-in is worth.
  • [07:58] Understanding your financing costs.
  • [09:46] How to avoid common negotiation pitfalls.
  • [11:36] Why you should always be prepared to walk away when buying a new car on your own.

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Maximizing Your Savings: A Guide to Smart Cash Management in the Current Financial Landscape

Cash Savings

In today’s financial climate, understanding where to keep your hard-earned cash can make a notable difference in your wealth-building journey. While stockpiling cash reserves in traditional checking and savings accounts has been the norm, currently elevated interest rates invite us to consider alternative savings options.

The State of Checking Accounts

According to the FDIC, the national average interest rate for checking accounts is a mere 0.07%. However, low rates on checking accounts aren’t unusual.

Rates have remained relatively low over the years, irrespective of fluctuations in the broader economic environment. That’s because banks traditionally profit from the differential between the low interest they pay on deposits and the higher rates they charge on loans.

Besides profit margins, factors like operational costs, cash reserve requirements, and the low-risk nature and accessibility of checking accounts contribute to their lower interest rates. Fortunately, there are other places to store your cash.

The Appeal of High-Yield Savings Accounts

Unlike traditional checking accounts, High-Yield Savings Accounts (HYSAs) at online banks are currently offering more generous yields—on average, between 4.35% and 5.15%. The absence of traditional brick-and-mortar expenses allows these institutions to offer higher rates, providing a more lucrative home for your cash savings.

Money Market Mutual Funds: A Closer Look

Money Market Mutual Funds (MMMFs) offer a blend of accessibility and enhanced interest rates, currently between 5% and 5.30%. However, while MMMFs allow for the swift movement of funds, it’s crucial to remember that they aren’t FDIC insured.

Rather, these accounts are often protected by SIPC coverage up to $500,000, including a $250,000 limit for cash, within a SIPC-member brokerage firm. Yet, it’s important to note that this protection doesn’t cover market losses, underscoring the need to consider the inherent risks of market-based investments.

For tax-sensitive savers, municipal MMMFs can provide a route to tax-exempt income, depending on where you reside.

Certificates of Deposit: Locking in Rates

Certificates of Deposit (CDs) present an opportunity to secure a fixed interest rate, with 1-year CDs currently offering between 4.76% and 5.67%. While CDs lack the liquidity of HYSAs and MMMFs, they shield against declining rates, ensuring a steady return for the deposit term.

Making Your Cash Savings Work for You

Let’s put this into perspective. Suppose you have $20,000 in a checking account, earning 0.07%, or $140 annually. Moving this to a savings account yielding 5% would make your potential earnings $1,000 a year.

After taxes, assuming a 24% tax bracket, that’s $760 net compared to $106.40 from the checking account. The difference is clear.

To maximize your earnings on cash, staying current with the most competitive rates is key. Trusted financial websites like Bankrate.com, NerdWallet.com, and Investopedia.com offer valuable comparisons and insights. In addition, checking the FDIC or SIPC status of the institution where you plan to deposit funds is essential.

Remember, your cash doesn’t have to sit idle. By being proactive and informed, you can make strategic choices that align with your financial goals and comfort level with risk.

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S5E5: Mastering Medicare with Boomer Benefits Co-Founder Danielle Roberts

Danielle Roberts Medicare

Medicare Expert Danielle Roberts Shares Her Expertise

My guest today is Danielle Roberts, founding partner at Boomer Benefits and author of the best-selling book 10 Costly Medicare Mistakes You Can’t Afford to Make. Danielle is a well-known professional in the Medicare insurance industry, having personally helped thousands of beneficiaries with their plan decisions. She has also specialized in Medicare-related insurance products for over 15 years and is a member of the prestigious Forbes Finance Council.

As a Medicare Supplement Accredited Adviser, Danielle is well versed in all issues currently affecting Medicare. She is also a regular contributor to several industry publications and has written extensively about Medicare and Medigap plans.

In this episode, we talk about all things Medicare, including the common mistakes beneficiaries often make and how to avoid them. Whether you’re new to Medicare or simply want to learn more about it so you can make an informed decision this open enrollment season, this episode is packed with useful information and unique insights.

With that, I hope you enjoy this episode of Financial Finesse with Danielle Roberts.

Episode Highlights

  • [00:05:14] Cathy and Danielle discuss the Medicare premiums marriage penalty.
  • [00:07:23] Why it’s essential to start planning for Medicare well before your 65th birthday.
  • [00:12:58] The challenges self-employed people, especially those who work past age 65, may face when enrolling in Medicare.
  • [00:16:26] Danielle explains what Medicare Part C is, how it differs from Original Medicare and Medigap, and the advantages and disadvantages of each option.
  • [00:28:28] Switching from Medicare Advantage to Medigap.
  • [00:38:10] How someone with a history of disease or illness should approach Medicare.
  • [00:46:55] How to think about the Medicare decision if you’re a frequent traveler.
  • [00:50:24] The risks associated with not reviewing your Medicare plan each year.
  • [00:53:08] The mistakes Danielle Roberts sees Medicare beneficiaries make most often.

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Single Women and Longevity Risk Part 3: Planning for Expenses in Retirement

Planning for Expenses in Retirement

In Part 2 of this three-part blog series on single women and longevity risk, we discussed the importance of investing to supplement your income in retirement and minimize the risk of outliving your financial resources. In Part 3, we’ll explore why planning for expenses in retirement—both expected and unexpected—is essential when it comes to managing longevity risk.  

Estimating Your Expenses in Retirement

Failing to consider and plan for the various costs you’re likely to incur in retirement can lead to a savings shortfall, increasing the risk that you’ll outlive your assets. Thus, creating a retirement budget is necessary to ensure you’re saving enough and investing appropriately.

Of course, there are always uncertainties when it comes to planning for the future. Nevertheless, with the right guidance, it’s possible to project your retirement expenses with a reasonable degree of accuracy.

For example, basic living expenses like food, housing, utilities, and clothing tend to remain relatively steady in retirement and are therefore easier to anticipate. Yet other items like healthcare, travel, and entertainment often rise significantly once you stop working.

In fact, a recent report by the Center for Retirement Research at Boston College found that in 2018, 12% of the median retiree’s total retirement income went toward medical expenses. Moreover, since 2000, the price of medical care has increased at a faster rate than the overall inflation rate.

Meanwhile, with more free time on your hands, you may wish to travel more and take longer, more expensive trips in retirement. Plus, you’re more likely to spend money on other types of entertainment once work no longer demands so much of your time.

No matter your retirement plans, it’s important to consider how your lifestyle goals will impact your budget and plan accordingly. This can help you determine what size nest egg you’ll need to retire successfully and mitigate longevity risk.  

Planning for Unexpected Expenses in Retirement

In addition to the expenses we can reasonably project, others can crop up as we age and our homes, children, and spouses age along with us. Unfortunately, unexpected expenses can mess with the best-laid plans when you’re living off savings and fixed sources of income like Social Security.

Therefore, it’s best to expect the unexpected and prepare for these expenses as best you can. Here’s a list of unexpected expenses you may face in retirement:

Home Repairs & Maintenance Costs

Many Americans own their homes when they reach retirement age. (When I say “own,” I mean they own their homes outright or are still paying down their mortgage as opposed to renting.)

It’s easy to overlook or postpone home maintenance, especially if everything looks fine on the surface. But homes age just like we do, and putting off necessary repairs can become a significant financial expense down the road.

A recent personal experience drove this point home when a routine paint job turned into a major dry rot mitigation project costing tens of thousands of dollars!

When it comes to planning for unexpected expenses in retirement, here’s a best practice to prevent a surprise cost like mine: hire a professional to inspect your home for hidden problems such as dry rot, termites, mold, foundation issues, leaks, and outdated plumbing and electrical systems. Then, develop a multi-year plan to fix the problems and schedule ongoing routine maintenance.

Remodeling Expenses

In addition to the unglamorous fixes a home occasionally needs, it’s not unusual to grow tired of your home decor over time. You may decide to buy new furniture or appliances or update the exterior of your home in retirement, all of which can be costly.

In some cases, you may simply want your home to maintain its value if you plan to eventually sell it. For example, kitchen and bathroom styles tend to change every 10-20 years, prompting homeowners to make major updates.

Or you may need to alter your home so you can age in place comfortably and safely. While no one likes to think about the possibility of losing mobility, it’s one of the realities many of us must face as our bodies age.

Regardless of the impetuous, remodeling costs are common in retirement and can be substantial. Thus, it’s best to expect them and manage your finances accordingly.  

Unexpected HealthCare Costs

The first time many retirees realize Medicare isn’t as cheap as they thought it would be is when they receive a notice from the Social Security Administration about IRMAA. IRMAA, which stands for Income-Related Monthly Adjustment Amount, is an extra charge added to your Medicare Part B and Part D premiums if your income exceeds a certain threshold.

When on Medicare, you pay monthly premiums for Part B, which covers doctor services, outpatient care, and preventive services, and Part D, which covers prescription drugs. But if you’re a high-income earner according to your tax return from two years ago, the government says, “Hey, you can afford to contribute a little more.”

So, they add an extra charge (IRMAA) to your monthly premiums. And the more you earn, the higher your IRMAA charge will be.

Also, Medicare doesn’t cover all healthcare-related expenses in retirement. You’ll still be responsible for co-pays, deductibles, and coinsurance, as well as long-term care, dental, hearing, and eye care. These out-of-pocket costs can add up quickly if you have a significant health issue or need extensive care.

Again, proper planning is essential to mitigate these costs. To avoid IRMAA, you can work with a financial planner to develop a retirement income plan that keeps your taxable income below the threshold.

In addition, you may want to consider buying a Medigap or Medicare Advantage policy to defray the healthcare costs Medicare doesn’t cover.

Medigap policies fill in the gaps in original Medicare coverage, including medical care when traveling outside the U.S. Just keep in mind you’ll still need a separate prescription drug plan (Medicare Part D).

Alternatively, Medicare Advantage (Part C) offers an “all-in-one” alternative to original Medicare. However, these plans are generally in HMOs or PPOs, which may limit your access to certain healthcare professionals or facilities.

Long-Term Care

Another common misconception is that Medicare covers long-term care costs. It doesn’t. This can be problematic, since most older adults will likely need long-term care during their lifetimes.

In fact, the U.S. Department of Health and Human Services estimates that 70% of those turning 65 this year will eventually need long-term care. Meanwhile, women are more likely to need long-term care than men and for a longer duration, according to data from Morningstar.

These services can be costly—typically thousands of dollars a month in expenses. Unfortunately, long-term care insurance is also expensive, and the rigorous eligibility requirements put it out of reach for many.

If you qualify for long-term care insurance and can afford it, you may want to consider your available options, including hybrid policies that include a life insurance component. Otherwise, self-funding long-term care by saving and investing enough money during your working years is likely your best option.

Family Obligations

It’s not uncommon for adult children or other relatives to need financial help occasionally. These requests can be tough to negotiate, especially if your loved ones don’t understand the strain an unexpected loan or gift can have on your finances in retirement.

Although discussing money is taboo in many families, it’s wise to be transparent about your financial circumstances and create boundaries around financial requests. If this isn’t a viable option, be sure to include potential loans and gifts when planning for expenses in retirement.

Losing a Spouse

Morningstar estimates that 90% of women will manage assets on their own at some point during their lifetimes. Many women experience this for the first time in retirement due to the death of a spouse.

Losing a spouse can be emotionally devastating, no matter your stage of life. Yet failing to prepare financially for this possibility can make an already challenging situation even worse.

If you depend on your partner financially, there are steps you can take now to safeguard your financial independence if you unexpectedly lose them. For example:

  • Consider purchasing a life insurance policy to replace lost income or cover funeral costs and other outstanding expenses.
  • If your spouse has a pension, explore your survivorship options before retirement to ensure continued payments.
  • Understand Social Security survivors benefits, especially if your spouse has the higher earnings record.
  • Consult an estate-planning attorney to ensure your estate plan is current and organized for a seamless transition of assets.

With Proper Planning, Single Women Can Minimize Longevity Risk and Thrive Financially in Retirement

Planning for expected and unexpected expenses in retirement is crucial for maintaining financial stability and peace of mind. Yet minimizing longevity risk requires more than managing your expenses. Meeting your savings targets and investing for your long-term goals is also essential.

Remember, the earlier you start preparing financially for retirement, the better off you’ll be long-term. Moreover, you don’t have to go it alone. A fiduciary financial planner like Curtis Financial Planning can provide expert guidance and help you implement the right strategies to secure your financial future. To learn more, please explore our services and free financial planning resources.

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Single Women and Longevity Risk Part 2: The Importance of Investing

Single Women and Investing

Saving and investing are both crucial for financial health. Yet investing is particularly important when it comes to mitigating longevity risk.  In Part 2 of this three-part series about single women and longevity risk, we’ll delve into the significance of investing and explore how understanding risk and reward can empower women to become better investors.

Differentiating Saving and Investing

When it comes to personal finance, many conflate saving and investing. While both are crucial for financial stability, they serve different purposes.

Saving entails setting aside a portion of your income for near-term expenses or potential emergencies. In other words, your savings should be a safety net that’s liquid and risk-free.

Investing, however, implies allocating money to stocks, bonds, and other assets in anticipation of a potential return in the future. Despite the inherent risks, investing is an essential strategy for single women to increase wealth over time, so you don’t outlive your financial resources.  

Understanding the Risk-Reward Relationship

While investing offers the potential for a higher return on your money, it’s also inherently riskier than saving. That’s why many women hold too much cash relative to their financial goals.

If you tend to be risk averse, you’re not alone. In fact, one Northwestern Mutual study found that in general, U.S. adults prefer to play it safe with their money than take risks.

However, understanding the risk-reward relationship is crucial for overcoming the confidence gap that many women experience as investors. Each investment carries a different level of risk, and effectively managing these risks is essential to achieve your financial goals.

Typically, investments with the potential for higher returns carry a higher degree of risk (although high risk doesn’t guarantee high returns). For example, higher-risk investments like individual stocks and equity funds generally offer the potential for higher returns over time. Conversely, lower-risk assets like savings accounts and short-term Treasury bonds tend to yield more modest returns.

Navigating the Risk vs. Reward Dilemma

Many women face the dilemma of whether to keep their money safe in a bank account or invest it for potential growth. Indeed, research suggests that men are generally more willing to take risks with their finances than women.

However, studies also indicate that as women gain confidence through education and experience, they become better investors. Moreover, women investors are more likely to exhibit traits such as reduced trading, increased patience, openness to advice, more diversified portfolios, and a healthy skepticism towards “hot” investments.

Ultimately, your financial goals determine the level of returns you need from your investments. Saving for a house down payment in the next few years, for example, might require safer investments with less risk. In contrast, saving for retirement that’s several decades away allows for higher-risk investments with the potential for more significant returns.

But you also need to weigh your return objectives against your comfort level with taking on risk. In this case, risk generally refers to the possibility of losing your money. Taking on more risk than you can tolerate can lead you to make rash investment decisions that impede your progress toward your financial goals.

Single Women and Investing: Mitigating Longevity Risk

To mitigate the risk of running out of money prematurely, women must embrace some investment risk. By profiling four different investors, we can illustrate the outcomes along the risk spectrum.

Assume the following savers/investors invest $50,000 for ten years and reinvest all interest and dividends.

  • Investor #1 places her $50,000 in a savings account earning an average annual return of 1.5%. Her account grows to $57.815 in 10 years.
  • Investor #2 places her $50,000 into a certificate of deposit (CD) with an annual yield of 3%. Her account grows to $67,196 in 10 years.
  • Investor #3 places her $50,000 into a diversified portfolio* of 60% stocks and 40% bonds earning a 6% average annualized return. As a result, her account grows to $89,542 in 10 years.
  • Investor #4 places her $50,000 into a diversified portfolio* of 100% stocks, and it earns a 9% average annualized return. As a result, her account grows to $129,687 in 10 years.

A Note on Volatility

While the 100% stock portfolio generates the highest outcome, it also experiences substantial fluctuations over the 10-year period. Meanwhile, the 60% stock/40% bond portfolio exhibits less volatility due to the lower risk associated with bonds. 

Consider the following hypothetical annual return patterns for these two portfolios:

The graphs above illustrate how Investor #4 experiences larger swings in performance over the 10-year period by investing exclusively in stocks than Investor #3. In other words, the price of higher returns is generally increased volatility.

Thus, investors who are unable to weather the ups and downs of the stock market may need to sacrifice return potential to stay the course over time.  

*Diversified portfolio returns were generated using Vanguard Total Market Funds, both U.S. and international.

Striking the Right Balance to Reach Your Financial Goals

The challenge for many independent women investors is understanding their risk tolerance in relation to their need for return.

For example, if Investor #1 doesn’t invest in stocks, will she reach her financial goals and manage longevity risk, or will she run out of money before the end of her life? On the other hand, does Investor #4 need to take quite so much risk, or can she beat longevity risk by investing in a less volatile portfolio?

These are the answers I seek when working with my female clients. Ultimately, my aim is to keep my clients invested for the long term to experience the magic of compounding returns and reach their financial goals.

In the third and final article in this blog series, we’ll look at the other side of the equation: minimizing longevity risk by managing your expenses in retirement.

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S5E2: Here’s What Savvy Donors Need to Know About Strategic Charitable Giving

Strategic Charitable Giving Tips for Savvy Donors

Strategic Charitable Giving Ideas to Maximize Your Tax Savings

Cathy shares her strategic charitable giving tips, from deciding how much to give to maximizing your tax savings.

A lot of my clients are charitably inclined and want to include giving in their financial plan. 

Of course, I thoroughly understand my client’s personal finances. Thus, I can provide specific guidance as to how they should think about giving and how to incorporate it into their financial plan.

However, if you’re listening to this podcast episode because you’re also looking for answers to these questions, I can still offer some nuggets of wisdom without knowing the details of your financial life.

In this episode, we’re going to talk about:

  • How much to give to charity
  • Which charities to support with your donations
  • Strategic charitable giving methods to maximize your tax savings.

Naturally, everyone’s goals and personal finances are unique. Therefore, it’s best to consult a financial professional if you have specific questions on this topic.

Nevertheless, I hope this episode gives you a framework for how to think about giving, so you can continue to make an impact while also reaping the associated financial benefits.

Episode Highlights

  • [01:36] How much should you give to charity?

  • [03:17] Which charitable organizations should you support with your donations?

  • [06:52] Who can reap the tax benefits of donating to charity?

  • [07:51] How to use “bunching” to increase your tax savings from charitable giving.

  • [10:06] How donor-advised funds (DAFs) can support your strategic charitable giving goals.

  • [13:04] Why donors who have reached RMD age may want to consider making qualified charitable distributions (QCDs).

  • [15:44] The potential advantages and drawbacks of a charitable gift annuity.  

  • [16:46] Why you may want to consider a charitable remainder trust (CRT).

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S5E1: Overspending? Here’s How to Get Your Spending Habit Under Control This Year

Spending Habit

Take Control of Your Spending Habit Once and For All

In this episode, Cathy shares her tips and strategies for getting your spending habit under control once and for all this year.

Welcome to Episode 1 of the 5th season of the Financial Finesse podcast!

Today I’m going to talk about spending—specifically, how to get your spending under control. Many of my clients told me that one of their goals for 2023 is to get their spending on discretionary items under control. (In other words, the things you really don’t have to have.)

And they may not have a spending problem per se. But they know their spending is probably one of the things that’s keeping them from reaching their longer-term financial goals, and/or it’s just making them uncomfortable. They don’t feel right about their spending habits.

I have to admit, I can relate to this because I have a little bit of a clothing infatuation. I love anything new, and I love clothing and accessories. So, I’m going to be right there with you in working on getting my own spending habit under control this year.

Episode Highlights

  • [02:11] What do habits have to do with spending?
  • [03:23] Identifying your biggest spending weakness or weaknesses.
  • [06:05] What are your spending triggers?
  • [08:45] Setting your new budget for the year ahead.
  • [10:32] How to find ways to support yourself in reaching your goal.
  • [16:23] Determining your values and aligning your spending accordingly.
  • [17:33] Download our free e-book, How to Take Control of Your Spending This Year.

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How to Take Control of Your Spending This Year, Part 2: Identifying Your Spending Weakness

Identifying Your Spending Weakness

This article is part two of a four-part series to help you reduce your spending this year. In part one, I shared a simple hack to help you create healthier spending habits. This week, I’ll take you through an exercise to help you identify your spending weakness.

It’s common wisdom that the way to complete a big task is to break it down into smaller parts and then tackle each task one at a time. Otherwise, overwhelm can set in, and nothing gets done. I’ll suggest a similar approach to tackling the “big task” of overspending.

What Is Discretionary Spending?

We all spend money on a lot of things, necessary and discretionary. For this exercise, we’ll define discretionary spending as spending on items you could survive without if you wanted to.

Examples may include an extensive collection of clothing, art, household knick-knacks, jewelry, shoes, accessories, make-up, books, or electronics. Alternatively, you may overspend on discretionary experiences such as excessive travel, entertainment, or dining out.

First, Identify Your Biggest Spending Weakness

Your first task in cutting discretionary spending is to identify your biggest spending weakness. For example, if you feel shame (or at least discomfort) about the amount of money you spend on something, it’s likely your spending weakness.

Most of you know your spending weakness, so choosing will not be difficult. However, for those who need more clarification, analyzing your past expenses can help you find your answer.

I encourage you to choose only one spending category at a time to keep things simple. (Breaking down a big task into smaller tasks helps get things done, remember?) That way, you are more likely to make progress. Of course, if you want to, you can add more categories or items and follow the next steps for each.

Next, Calculate How Much You Spent Over the Last 12 Months

After identifying your spending weakness, the next step is to write down how much you spent over the last 12 months on this item. While you can estimate this dollar amount, it’s better to look at your credit card and checking account statements to determine your actual spending. Otherwise, it’s easy to rationalize and make excuses when you’re guessing.

Got your number? Congratulations. I know that confronting money issues is hard, especially if it brings up uncomfortable feelings like regret, remorse, or shame. So let the feelings happen, but then let them go. Thank yourself instead for starting this journey to get back on track.

Continuing Your Journey

In the next article, we’ll go through an exercise to help you discover what triggers your overspending.

In the meantime, I invite you to check out these free resources to help you better understand and take control of your personal finances.

Download my FREE E-BOOK: How to Take Control of Your Spending This Year

Love this blog series? Download my free e-book, How to Take Control of Your Spending This Year, for tips and strategies you can quickly put into action to get your spending habit under control.

If you found this information interesting, please share it with a friend!

How to Take Control of Your Spending This Year, Part 2: Identifying Your Spending Weakness Read More »

How to Take Control of Your Spending This Year, Part 1: Reduce Your Spending by Creating Healthy Habits

Reduce Your Spending by Creating Healthy Habits

This article is the first in a four-part series to help you reduce your spending this year. I’ll be sharing the knowledge and experience I’ve gained over the last 20 years creating financial plans and guiding women to take control of their finances to help you develop healthier spending habits.

I know many people scoff at the idea of New Year’s resolutions. But I don’t. I believe it’s an opportunity to try and jump-start new habits.

Yes, you can start a new behavior in March or September, but something about a new year motivates me—and maybe you, too. Plus, it helps if the habit you’re trying to change causes you distress, so you’re motivated to work on it throughout the year.

For example, many people want to reduce their discretionary spending. They intuitively know that their spending is getting in the way of achieving their financial goals, but they don’t know what to do about it.

In part one of this series, I’m sharing the simple mindset shift that can help you reduce your spending once and for all.

January is an excellent month to begin a new spending plan.

You may have noticed that I’ve been using the word “habit” a lot. But what do habits have to do with spending?

Many of our behaviors become habits. Overspending or unconsciously spending is a habit, which is actually good news if you’re trying to reduce your spending.  

Many experts—for example, James Clear, who wrote the book Atomic Habits—have shared their wisdom and strategies for breaking bad habits and replacing them with new ones.  We’ll be leveraging the wealth of information available on this topic, as well as my own experience as a financial planner, to help you get control of your spending in 2023.

What does it take to develop new habits?

If you want to change your habits and reduce your spending this year, living in denial isn’t the answer. Your brain won’t like that. It will fight back too hard.

Instead, you’ll need to make thoughtful decisions about where to allocate your resources moving forward. Eventually, cutting back on spending will be something you want to do because you know it will get you to a better place.

Ready to reduce your spending? Let’s get started.

Each blog post in this series will focus on getting you to think and then take action. You will be writing, so get a pen and paper out, or boot up your laptop. By week four, you’ll have a new attitude and plan in place to help you reduce your spending and get back on track towards your financial goals.

Are you ready to get started? Great. In the next article, we’ll work on identifying your spending weaknesses.

In the meantime, I invite you to check out these free resources to help you better understand and take control of your personal finances.

Download my FREE E-BOOK: How to Take Control of Your Spending This Year

Love this blog series? Download my free e-book, How to Take Control of Your Spending This Year, for tips and strategies you can quickly put into action to get your spending habit under control.

If you found this information interesting, please share it with a friend!

How to Take Control of Your Spending This Year, Part 1: Reduce Your Spending by Creating Healthy Habits Read More »

Curtis Financial Planning