Posts Tagged ‘financial coach’

Financial Goals for the Real World

October 26, 2010


It’s in all the advertisements for financial service providers: “Let us help you achieve your goals!” “Your life. Anything is possible.” “Take charge of your financial future.” “What’s your dream?” “Together we’ll go far.” And the commercials with attractive silver-haired Baby Boomers sailing the ocean blue or chuckling over the Wall Street Journal while sipping coffee… does anyone really aspire to that?



But the point is, without a bit of a dream behind them, financial goals can be as wishy-washy as a weight loss goal without a fitness and nutrition plan. You need motivation and some guidelines to stick with it or like a diet, the first chocolate cake you encounter will have you off the wagon and giving up.

But what does it really mean to set financial goals? What are your goals? Wait, you haven’t really thought about it? Many people don’t because they don’t think they are in a place to do so. They say things like, “I don’t have time or money for any new goals in my life.” Or, “Just getting the kids to and from school and putting food on the table while growing my career is enough of a goal for me!” Sound familiar?

So let me re-frame the question: If money wasn’t an issue, what would you do differently? Move to a different neighborhood? Go back to school? Go on a safari? Pay off your credit cards? Or even just hire a housekeeper? These are financial goals.

So go ahead, list them out. Then try to put a price on each goal. For example, a move to a different neighborhood could be as simple as the cost of moving: $2,000 for movers, $1,500 for a security deposit, $500 for those miscellaneous things that you always seem to need when you move like new wastebaskets and perhaps a small furniture piece.

For others it might require accumulating a down payment and getting your current home ready for sale. That’s going to require a bigger budget.

Not sure how much your goal will cost? Start doing some research. Call your community college to inquire about the average cost of a Master’s degree. Google “house cleaning” to find out what cleaning services in your area charge. Just doing the research and finding out a bit more about your “someday” dream will make it a touch more real and set you up to being closer to making it “today.”

And just like that, you’ve set some financial goals! With that out of the way, it makes it much easier to figure out how to achieve them. And trust me, it’s really not that difficult. I’ll be covering those steps in a future post, so stay tuned!


Financial Advice for the Ages

October 12, 2010

There are some personal finance rules of thumb that are set in stone across the board, no matter who you are, how much money you have or what your financial goals are. For example, whether you make $1,000 per month or are worth $10 million, you should have an emergency fund that equals a minimum of three months expenses.

But then there are also rules and suggestions that change as you age and (hopefully) earn more money. Depending on your situation, here are a few age-based tips to maximize your financial well-being.

At this age you’re probably still single, no kids, making pretty decent money, traveling a bit, pretty career-focused and not thinking too much about retirement. What essential steps should you be taking?

  1. Get debt-free and stay that way. Pay off your credit cards, student loans and car loan to get your credit score in tip-top shape for when you will inevitably want to qualify for the best mortgage rates.
  2. Take advantage of your employer’s 401k benefit. If you’re offered a match, put at LEAST the amount in there to maximize the match. Aim to defer at least 6% of your salary, 10% if you can afford it.
  3. Get your emergency fund in place ASAP. Start with only $25 per paycheck if you have to, but make it automatic, and once the money is in there it stays. You’ll be glad you have it if you lose your job or have an accident.

If you’re a typical American, by this time you own a home, have 2.3 kids and are settled into a career that provides a solid income. You probably spend a lot of time at your kids’ events and have a couple of nice cars in the garage. Make sure you’re staying financial healthy by also doing the following:

  1. Keep socking that money into your 401k. Do NOT sacrifice retirement savings to pay for your kids’ education. They don’t give retirement scholarships or loans.
  2. But you should be saving for college if you can. Decide how much you do want to help (some people want their kids to pay for some to make sure they value the opportunity) then open a 529 account for each child with monthly automatic contributions. Also, make sure you’re matching any expensive extracurricular activity costs with college savings. If you can’t afford to save for college AND pay for select soccer or elite gymnastics, reconsider the high-end program. Chances are your child won’t be making a career out of it and while it might be a tough pill to swallow to drop down to a more affordable league, it will be a lesson in sacrifices and choices that won’t be forgotten.
  3. Make sure your emergency fund balance has been adjusted to cover increases in your expenses over time. Once you’ve reached the goal, keep up with the automatic monthly savings into a Roth IRA or money market savings account.

You survived toddlers and are now enjoying the final teen years with your kids, who are hopefully college-bound overachievers. You may be considering a second act career or wondering what the heck you’re going to do with your time once the last of your brood flies the nest. What else should you be thinking about?

  1. It’s probably time to really think about what retirement means to you, then putting that story into numbers. Most people these days aren’t really planning to live out their days on a golf course, but would like the flexibility to hit the links when they like while also staying engaged and active. Think about how the cost of your lifestyle will change and make sure you can weather that.
  2. Take a look at how your 401k (you’re still contributing, right?) is allocated. At this point you should only have about 50% of your funds in stocks, so make any updates to put the other 50% in solid bond funds or other fixed income instruments.
  3. Try to get your house paid off sooner rather than later. Your goal should be to retire completely debt-free.

As with all personal finance tips, these are simply general ideas based on what the “average” American deals with through life. Of course your situation is going to be different and you’ll make adjustments as needed according to what’s important to you. Above all, remember that the purpose of all of this is to simply allow you to enjoy life without having money as a barrier to pursuing your calling.

How’s Your Attitude?

September 9, 2010

Do you ever have one of those days when everything just seems to click? Like the stars have aligned perfectly and everything you touch is golden? For example, you’re on your way home from running morning errands when you notice a parking meter open right in front of the coffee shop. Perfect!

You decide to take your chances by not paying and run in to grab a quick cup. When you swipe your loyalty card you learn you’ve earned a free coffee so you don’t owe a dime, and you glimpse the meter maid approaching just as you pull away…a close call! Lucky day! Suddenly it seems you only have green lights and no traffic and you don’t forget anything at the grocery store and you wonder what else you can accomplish on this great day!

The thing is, you probably still sat at a couple red lights. And you might not have forgotten anything, but Trader Joe’s doesn’t sell frozen garlic bread or your special brand of soymilk, so you’re still going to have to go to the “normal” grocery store later. But these things don’t bother you like they might because you have the attitude that, “This is MY day.” Other days you might grump about having to shop at two stores, or notice how many pedestrians walk into traffic without looking, or become annoyed when your coffee drips on the seat of your car. But not today. Hakuna matata!

Sound familiar? Ever have those days? Did you ever examine it just a little more closely and realize that there wasn’t that much special about that day, it was really that you just happened to notice the good stuff? It turns out my mom was right. It really is all about your perspective or your ATTITUDE. It reminds me of the paragraph that hangs on the wall in her office by Charles R. Swindoll:

“The longer I live, the more I realize the impact of attitude on life. Attitude, to me, is more important than facts. It is more important than the past, the education, the money, than circumstances, than failure, than successes, than what other people think or say or do. It is more important than appearance, giftedness or skill. It will make or break a company… a church… a home. The remarkable thing is we have a choice everyday regarding the attitude we will embrace for that day. We cannot change our past… we cannot change the fact that people will act in a certain way. We cannot change the inevitable. The only thing we can do is play on the one string we have, and that is our attitude. I am convinced that life is 10% what happens to me and 90% of how I react to it. And so it is with you… we are in charge of our Attitudes.”

So how’s your attitude today? I know I’m keeping mine on cue to notice the good stuff and try not to dwell on the bad stuff.

It All Adds Up!

August 31, 2010

Today I had the chance to engage in one of my favorite activities. It was coin-rolling day – the day my piggy bank won’t allow me to put another penny in, and I break out the paper coin rolls then head to the bank for a nice little bonus deposit to my checking account.

Ready to roll!

Ready to roll!

Call me a nerd, but I love coin-rolling day. Sorting quarters and dimes into neat little piles satisfies my organizational tendencies and rewards me with extra money I didn’t even miss. And it only takes 15 minutes – I kept track! You can sort your change while watching TV, listening to a podcast, or make it a family affair by getting the kids involved.

I had lots of help

I had lots of help

Back in the day when Suze Orman first hit the airwaves as a guest of the Oprah Show, she wisely suggested that one way to save money without even trying is by saving your change. OK, so maybe she wasn’t the first to think of it, but I remember seeing it and have been saving my change ever since. Do you? If not, I suggest you try.

What’s that? You don’t really spend that much cash? Well, I didn’t think I did either but even the little dollars here and there I use to buy coffee have produced enough change to add up. In fact, this little pile totaled $26 and I had several dollars left over that went back in the piggy bank since they weren’t complete coin rolls.

I know that doesn’t seem like much, but if it’s money you didn’t miss anyway, it adds up over time. Twenty-six bucks per month equals annual savings of $312, which is enough for cross-country airfare from most major airports! Think of it as a bonus vacation fund.

For complete disclosure, I have to share that when I arrived at the bank, the teller simply dumped all my neat little coin rolls into the electronic change counter. It turns out the banking centers in Chicago are a little more technologically advanced than those in Cincinnati! At least at my bank… I have to say, I’m a little bummed to learn this, as I actually like rolling my change. (Some banks charge for this service, so don’t toss those paper rolls yet!)

Regardless, my point remains: the next time you use cash for a purchase, use only dollars and pocket the change. You’ll be surprised how much money you “find!”

Note: No animals were harmed in the production of this blog post.

Estate Planning Really IS For Everyone

July 5, 2010

A couple high profile stories have been published recently regarding the disposition of multi-million dollar estates, demonstrating the dire importance of having an updated last will in place. Most notable was a case involving the dispute of Sammy Davis, Jr.’s widow’s estate, in which Mrs. Davis’s assets (including rights to Sammy’s artistic property), were in danger of passing into the wrong hands. Luckily the LA County court decided in favor of Manny Davis, the survivor of Sammy and Altovise Davis because there was sufficient evidence supporting her self-drafted will.

Sammy Davis, Jr.
The more interesting case involves the relatively unknown drama behind the estate of Stieg Larsson, author of the wildly popular Millennium trilogy that began with “The Girl With the Dragon Tattoo.” Larsson passed away unexpectedly in 2004 at age 50 without a will, leaving his long time live-in girlfriend, Eva Gabrielsson with nothing. He had written the trilogy as a means to provide retirement income to himself and Gabrielsson but died before the books became a sensation. Control of his literary legacy went to his estranged father and brother by Swedish law, who are reaping the benefits of the delayed success of the books.

Dragon Tattoo
As these cases demonstrate, the signing of a will can make all the difference in ensuring your wishes are carried out should you die unexpectedly. And while these stories involve extraordinary wealth and pop culture influence, they also demonstrate why it is necessary to take care of this important step in your family’s well being. Not having a will in place leaves control of the disposition of your assets and possibly your children to the state in which you reside. It also makes a sad and difficult time for your survivors even more painful, as your wishes may not be realized.

Most people put off drafting a will for a couple reasons. First, they think it is wildly expensive and time consuming, so they procrastinate in favor of when they have more time and money to deal with it. While the process can be lengthy depending on the complications of your situation (second marriage, step-kids or a small business to name a few), most estate planning attorneys these days offer a “package” price, where you know what it will cost before you get started.

If you still think that can be a drag, try Legal Zoom, which offers a fill-in-the-blanks will starting at just $69. As the Sammy Davis, Jr. case demonstrates, these wills contain the necessary legalese to stand in court. But again, if you have a more complicated estate I suggest engaging a qualified attorney who can help you address issues you may not be aware of.

The other reason I find people avoid the process is that they just don’t want to consider their own mortality. They figure they don’t really need a will until they start collecting Social Security. I get this. I cried while typing out my burial wishes to be included with my will. The last thing I want to contemplate is where I want my ashes spread. But someday it’s going to be done, and avoiding painful thoughts of what will most certainly be is not a valid excuse to leave your kids at risk of becoming wards of the state.

If you don’t have a will, do you know what would happen to your family if you were to die unexpectedly? Depending on the state you live in, your estate may not pass 100% to your surviving spouse (or your parents if you are single). And even if it did, dying “intestate,” which literally means “not making a will,” is a much more burdensome and expensive process than if you had a will stating your intentions. And if you’re not married but have kids or a significant other, the result can be even more devastating for your loved ones.

As Benjamin Franklin so famously said, “… in this world, nothing can be said to be certain, except death and taxes.”

Wedding Bells Without the Money Blues

March 1, 2010

When planning your dream wedding it is easy to ring up an event costing more than $30,000 — that’s more than the price of a decent new car! As each little thing adds up, it is important to save money in areas where it won’t really affect the overall day. Try one or all of these ideas to save some coin without sacrificing the ultimate intent: exchanging vows with your beloved!

Minimize the Menu If you’re hosting a large reception (over 150 guests), the cost of food can exceed $10,000 if you choose a premium main course. In my opinion, you don’t need to serve a gourmet meal — chicken and veggies are just fine.

Most wedding guests aren’t coming to your reception for the food anyway. In general they will expect a decent meal, but won’t be disappointed if they are not served a filet or lobster. And if you hire a fun deejay, (one area where you can get a lot of bang for your buck) most people won’t even pay attention to what they’re eating because they’ll be so anxious to get out on the dance floor.

Save money on the food and spend it on great meals on the honeymoon that you will savor and remember.

Lower the Bar Bill Don’t let your party animal friends talk you into hosting a top shelf open bar. While some wedding guests may prefer a mixed drink before dinner, most will be fine with choosing beer or wine as their drink of choice for the night. Trim a dollar or two off the cost of EACH GUEST by choosing to serve only beer and wine at your bar and you’ll save hundreds of dollars on the reception. If you’d still like to make mixed drinks available, guests will understand if you choose to have a cash bar for those options.

You may also choose to offer an open bar for the first three hours of the event, turning it into a cash bar later in the night to discourage guests from overindulging. This is safe for your budget and your guests’ health.

Have Your Cake It is worth the money to have a professional bake your wedding cake. Ask any caterer and he or she will have a story of an amateur wedding cake gone awry. To have a beautiful cake without breaking the budget, ask your baker to make your decorated cake smaller, then bring a couple extra sheet cakes or “kitchen cakes” to keep in the back to give you enough to serve all your guests.

Event center staff are used to this arrangement, and your guests will still enjoy a tasty cake while never knowing that the piece they savor didn’t come from the actual cake you cut.

Above all, don’t lose sight of why you are planning such a celebration. A wedding is one of life’s great milestones for many and loads of fun to plan and execute. Just remember that at the end of the day, the only purpose is to unite your life and your heart with that of your soul mate’s. As long as you make that happen, none of the other details will really matter in the long run.

These tips are just a sampling of the many I have collected over the years. My newsletter, Weekly Wedding Wisdom, offers several other money-friendly ideas related to getting married. If you’d like more, please Email me to be added to the list. Your email address will not be used for any other purpose.

A version of this post was published in the Cincy Chic column “Cents & Sensibility” on March 1, 2010.

What? You’re Embarking on Another Career Change?!?

June 22, 2009

Yes friends, that is correct. In just 9 short years since graduating with my degree in Accountancy, I’ve added a 5th employer to my resume – ME!!! While the salary isn’t exactly what it’s always been and benefits are expensive and relatively non-existent at this point, I’m pretty certain that I’m going to love my new boss and that the “priceless” factor about all of it will far outweigh any measurable compensation.

But since it has been less than a year since my last career switch, and being that I really am not a flake who doesn’t know what she wants to do with her life, I thought it worthwhile to detail the past year’s events that have led me to this recent change.

My decision to leave PNC Bank in the summer of 2008 and join Morgan Stanley was not one I made lightly. In fact, almost a year passed between the first time I was introduced to my would-be business partner and when I actually started my training. The opportunity seemed to fit my desire to be more entrepreneurial while also being in a position to more completely serve my clients’ needs. I thrived on the human connections I made through my role as a trust officer at the bank, but was constantly frustrated by factors out of my control that are inherent to the position: tons of repetitive (and seemingly useless) paperwork, rigid corporate structures, face-time expectations and ultimately an inability to work with my clients the way that I thought would be most beneficial. And while the turn to Morgan Stanley ended up being more of a detour than a main route, it has once again proven my favorite adage, “Everything happens for a reason.”

As I struggled to identify prospective clients for Morgan Stanley, I was naturally drawn to the types of people I knew and enjoyed meeting – people that inspired me and challenged me that I had worked well with in the past: small business owners and busy professionals who put all their energy into running their businesses/careers while still taking time for family, leaving little time to think of, learn about, or pay attention to saving, investing or planning. I positively adore working with these types of clients, as we understand each other, they are trusting and trustworthy, and appreciate the value of caring and outstanding service. These are the people that I want to help by establishing peace of mind, ease of saving, and confidence that their families are secure should an unexpected disaster befall the family.

The trouble ended up being that the role I need and want to play has very little to do with actual investment management. And I was being paid by Morgan Stanley to identify and sign up clients who needed investment management. Sure, planning is a big piece of this, but the people I was meeting do not have a large cache’ of cash sitting around to invest – their savings are going to start small and the advice they need is more applicable to cash flow analyses, cost/benefit analyses when considering expanding their business, expense tracking and reduction, etc. In order to provide the type of advice I wanted to share while still fulfilling the requirements of Morgan Stanley, I would have had to manage a book of over 500 clients! This is not realistic nor would it give me the opportunity to serve ANY of my clients the way they deserve.

What finally occurred to me is that my knowledge, experience, talent and passion lie not in picking appropriate mutual funds, stocks, bonds or other investment vehicles, but in all the other aspects of a solid financial foundation. All the steps leading up to having the need to pick investment vehicles are what I do best: evaluating a client’s goals and values, then counseling them to a proper course of action to get there. Collecting the necessary information regarding their current situation and helping them get it organized for optimal results going forward. I wanted to be a consultant, paid for my knowledge and time, not paid for portfolio management advice and performance. From there the idea of being a Financial Coach was born, and here I am doing it!

So if I hadn’t taken the risk of leaving my bank job and joining Morgan Stanley, I never would have had the courage, creativity or connections necessary to take this next step of creating my own business. Three cheers to kismet, serendipity, divine intervention, whatever you call it! So all’s well that ends well, and I am grateful for the resources I picked up in my year with the firm. I am excited, nervous, inspired and motivated to make the best of my talents and skills in order to help others make the best of their talents and skills.

And now, my boss is calling – gotta get back to work!