Posts Tagged ‘financial planning’

Tax Time = Tuneup Time

March 28, 2011

This recent article by NY Times writer Ron Lieber is a great reminder that tax time is a great time to check in with your complete financial picture and make some tweaks to keep you on track. It’s also a great time to organize your filing and get rid of financial clutter!

In short, the article suggests the following steps as long as you’re digging into your financial records. I’ve added my own tips to the steps as well as the author’s advice.

1. 401k checkup: First, rebalance your funds. As mutual fund values change, so does the allocation of your 401k account. It’s important to go in at LEAST annually (I recommend twice a year and help clients do the same) to reset to your target allocation.

While you’re in there, liquidate any company stock that you have accumulated. Many employers give their match in company stock, but it is risky to hang onto this. If things go south with your company, you could be out of a job AND see your 401k value go in the tanker. Diversify away from having all your eggs in that basket.

What about those old 401k accounts from former employers? If they’re still sitting in the company’s plan, this is a good time to consolidate those accounts into a rollover IRA, where your options will be greater and you’ll save on administrative fees. Not sure how to do this? Guess what else I help my clients do…

2. Saving for the Medium Term: We’ve all heard the rhetoric about saving for retirement and the benefit of saving early, and who hasn’t heard of the absolutely-necessary emergency fund? But what about the other things in the medium term, like vacations, large purchases, home maintenance or other big-money items that probably don’t fit into your day-to-day budget but that you’d like to eventually buy? Get started today by setting up a separate savings account for each goal, then make your savings automatic. Fifty bucks out of each paycheck probably won’t be missed, but it can add up quickly toward that week in Nantucket or new tires on your car. ING Direct lets you set up subaccounts and they offer great rates, compared to what you might get down the street at your bank branch.

3. Automatic Donations: If you’re charitably minded but often put off writing those checks till the end of the year, consider dividing your donation by 12 and setting up automatic monthly donations to ease the burden on your end-of-year budget. And no matter when you are giving money to charity, make sure you’re either writing a check or using a debit or credit card to provide an accurate record of the donation for your tax return. The IRS no longer allows the “I put ten bucks in the offering plate at church,” deduction. You gotta prove it.

If you’re an American Express cardholder, Lieber recommends their Members Give program, which lets you set up automatic donations or you can even use Member Rewards to make your gifts. I’m all about credit card rewards as long as they’re not incurred by debt you’re going to carry from month-to-month!

Taking these little steps should only take about an extra hour as long as you have all your financial information out, and it can make a tremendous difference in your financial health going forward, so just do it! You’ll be glad you did when you begin to reap the rewards of sound financial management.

Kelley C. Long, CPA is a Chicago-based financial coach who believes you shouldn’t have to have a million bucks to receive personalized financial advice. Check her out at www.kelleyclong.com.

Grocery Shopping Tips

January 18, 2011

One of the changes I am working to make permanent in 2011 is to plan ahead with meals and increase my cooking at home, both to prevent mindless nibbling as well as save us a little bit of money on the food budget. I’m also hoping this helps me shed a few of the fifteen pounds I managed to pack on through 2010!

Tuna casserole for grown-ups!


Inspired by my new Jessica Seinfeld cookbook (thanks, Mom!), I’ve done pretty well so far. And Sweet Pea has even expanded his pallet a little to try some new things! But when I look at how the grocery bill has ballooned, I have to think twice about how I’m going about my weekly food shopping.

To that end, I’d like to share some food savings tips from the August, 2010 issue of O Magazine . I hope they help you too with your financial resolutions today and throughout the year!

Fish and seafood: Frozen fish is a great way to save, as much of the “fresh” fish at the grocery has already been frozen (the label will tell you this). If you want to splurge, wild Alaskan salmon is worth the money and is certified as sustainable by the Marine Stewardship Council.

Baking ingredients: Skip the name-brand sugar — you can’t tell the difference between the much less expensive store-brand. But when it comes to vanilla extract, experts say it is worth the extra money to buy the real deal.

Cookware: Cookie sheets and stock pots don’t require any fancy materials or coatings, so go ahead and buy the cheapest on the shelf. But don’t scrimp on a good skillet that you’ll use for things like searing or sautéing. You’ll appreciate the even distribution of heat offered by a high quality pan.

Liquor: I know this one from personal experience: if you’re going to mix vodka with anything (even olive juice, like my favorite cocktail), no need to buy the good stuff. Vodka is like tofu — it adopts whatever flavor you add to it. Save your money for a delicious bottle of single malt scotch!

Spices and herbs: Most name brand spices don’t offer anything different than generic brands, so go ahead and cheap out there. And when it comes to buying fresh versus dried, Alejandra Ramos advices that the only time you REALLY need to use fresh is when the recipe calls for basil and parsley.

Organics: The rule of thumb for buying organic produce is that if it’s sweet, go organic. But if it is a fruit or veggie with a thicker skin like onions, bananas or avocados, you’re safe from pesticides anyway.

Olive oil: If you’re going to cook with it, regular olive oil will do just fine. And if you’re making a dressing, you can mix two-thirds cheapie with one-third fancy and still enjoy great flavor. If you’re drizzling over food though, go for the good stuff.

Fruits and veggies: If a vegetable is out of season, buy frozen without losing a lot of the nutrients. Not sure what’s in season? Check out Eat the Seasons, a website updated weekly with what IS in season. Brussels sprouts, anyone?

Cheese: I saved the best for last, one of my diet staples. The only time you ever really need to go high-end on cheese is when you’re doing a cheese plate or fondue. Otherwise, go economy when serving with crackers, in meals, salads or even when grating over food.

I hope you’ve found some information to help with your next trip to the local market. Anything I missed? What grocery store tidbits can you offer? Anyone care to disagree with any of the above?

Kelley C. Long is a Chicago-based financial coach who believes you shouldn’t have to have a million bucks to receive personalized financial advice. Check her out at www.kelleyclong.com.

It’s Not Rocket Science – Achieving Goals

December 7, 2010

As we prepare to wrap up another year, many people will once again be setting goals for the year ahead – count me among those people. If financial goals are among your resolutions, then the next logical question is, “How do you get there?” Read on for the answer.

First of all, don’t forget to be realistic when actually setting financial goals. You don’t have to shoot for the moon to make a difference in your finances. And remember that your goal doesn’t have to be about amassing large amounts of money. It can be as simple as putting a little cushion in place for splurge purchases.

Once you’ve set your goal, the first thing you want to do is write it down and post it where you’ll see it frequently. Is your goal to pay off your credit cards? How about a sticky note that says, “Debt-free = stress-free,” stuck to your credit card. The next time you are tempted to stray, you’ll have a solid reminder to make you think twice. If your goal is saving for something great like a tropical vacation, get out that beautiful photo of the beach and tape it to your computer monitor for motivation.

But beyond setting the goal, how do you get there? Once you’ve established a dollar-amount, break it down into time increments. Let’s continue with the credit card debt example.

Say your balance is $2,000 (which is closer to what the everyday American carries than the scary $8,000+ average often cited) and you’d like it gone in a year. Divided by 12, that’s about $167 per month needed to reach your goal. (I know this calculation doesn’t take interest into account, but I’m trying to keep it simple)

So how do you find an extra $170 or so in your monthly budget? There are some great tips in this blog post by my friend Andy, or you could try the standard ideas like packing your lunch, scaling back from a latte to a drip coffee with lots of milk, or cutting back on entertainment spending by ordering the drink special when out with friends instead of your expensive favorite cocktail.

Most important to achieving any financial goal is to make it automatic. Your credit card minimum payment may only be $75, but in your head, it must become $170 until the balance is $0.

If your goal is to save some money, set up an automatic transfer to your savings account each time you get paid. Just like you don’t miss a mortgage payment because it’s automatically withdrawn each month, you’ll find it much easier to save when it happens without your having to click a button each month.

Setting and achieving financial goals is not rocket science, and even the most strapped of us can make them happen. Keep it simple, be gentle with yourself if you get off track and celebrate the little victories.

Now it’s your turn: What are your goals for 2011? Mine include saving some splurge money for our tropical vacation in March and investing in continuing education to keep me sharp on personal finance topics. Please share your goals and any additional tips you have for getting there below in the comments.

Kelley C. Long is a Chicago-based financial coach who believes you shouldn’t have to have a million bucks to receive personalized financial advice. Check her out at www.kelleyclong.com.

November is the Best Time to Buy

November 9, 2010

When it comes to saving money and shopping for bargains, it’s a no-brainer that there are certain times of year that are better than others to shop for seasonal items. For example, you’re probably not going to score a smokin’ deal on a pair of winter boots in November. Best wait until after Christmas, when prices are slashed to make room for spring fashions.

Winter boots
Looking for a deluxe gas grill for your summer barbecues? You’ll pay top dollar in May. Waiting til August may limit the selection, but you could save up to half off the retail price and still celebrate Labor Day with deliciously grilled delights!

But did you know that there are better times of year to shop for non-seasonal items as well? I was delighted to learn this, and with a little advance planning or postponement of projects, it’s possible to save a bundle by being aware of the calendar.

November, it turns out, is the best time of year to buy kitchen appliances and power tools. So if you’re planning to while away the cold winter months with a home improvement project, prepare ahead of time and take advantage of the deals on sanders, power saws and even those stainless steel appliances you’ve been coveting.

See you at Home Depot!


Kelley C. Long is a Chicago-based financial coach who believes you shouldn’t have to have a million bucks to receive personal financial advice. Check her out at www.kelleyclong.com.

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.

Mid-twenties
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.

Mid-thirties
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.

Mid-fifties
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.

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.”

Myth-busters: No such things as “healthy” debt

June 21, 2010

Clients often ask me to recommend a “healthy” credit card balance that they should carry in order to boost their credit score. Contrary to popular belief (a belief created out of confusion and no doubt encouraged by the credit card industry), the answer is $0. You do not need to carry a credit card balance in order to demonstrate good credit history.

That’s not to say that you shouldn’t have credit cards or that you shouldn’t use them. Having them and using them responsibly are what helps keep your credit score high, and while carrying a low balance doesn’t always hurt your score, it doesn’t help it either. In fact carrying a balance that is too close to your limit can hurt and with high interest rates and fees it is certainly not the best way to maintain financial health. Let me explain.

When a lender, like a mortgage company or auto finance department, looks at your credit report, they are looking for the likelihood that you will pay them back if they give you a loan. Other parties also use them to protect against making a bad deal, like landlords who use them to judge whether you will pay rent or cell phone companies that want to determine whether you will actually pay for the airtime you use.

Even employers will sometimes request your credit history for insight into whether you are a responsible person. For example, if you consistently pay your electric bill late or have a history of running over your credit limit, chances are you may also be chronically late for work or distracted by personal financial issues on the job.

The reason that it is important to have a couple credit cards (two cards issued by major financial institutions like VISA or American Express will suffice) and to use them occasionally is to demonstrate what credit examiners are seeking: that you can be trusted with credit and that you will pay it back on time. Just make sure you pay your balance off each month and you will enjoy life debt-free!

Another way to ensure that you maintain the best credit score possible is to review your credit report at least annually, which you can do for free. Go to www.annualcreditreport.com to print your credit report from all three credit-reporting agencies and review each agency’s report for accuracy. If you find any errors, take the proper steps to correct them. Each agency tells you how to do this on their respective websites.

Things that could bring your score down include credit card accounts that are at or near their credit limit, unpaid bills from your past or too many examinations into your history in the recent future. If you have these items on your report and they are legitimate, you should take action to fix them. Pay down the high-balance cards (and stop using them until they are paid off), pay off any overdue bills and stop applying for credit at every opportunity. It will take time (up to seven years for some items), but eventually your score will improve.

Budget: NOT a 4-letter word

April 26, 2010

What does the word “budget” mean to you? Do you cringe when you hear it, thinking of an end to spontaneous dinners at your favorite restaurants and a new habit of packing your lunch? No more cute shoes and Starbucks runs? If so, then you are like most people! But to me and in my financial coaching practice, budget means nothing more than an on-paper look at where your money is going.

Most of my clients come to me with needs including debt-reduction advice and help with saving more money. They’ve done the basic budgeting in their head and know there is extra money somewhere to put away, but they struggle to find it. The thing is, when they add up all the “fixed” stuff like rent/mortgage, utilities, car payment, other loans, childcare, etc, and compare that number with the amount of money coming in, a lot of people are sad and discouraged to see what “should” be leftover.

More often than not, the process usually stalls out there with feelings of poor willpower and negative self-talk. It is at this point that I remind clients they aren’t counting the other little things that are also needs in our everyday lifestyle. Haircuts, oil changes, personal care items, house cleaning, gas money, and yes, food. Most people do have an amount of money each month that they could put toward debt reduction or savings without really feeling a pinch to their accustomed lifestyle, but it isn’t as much as it initially appears.

So once you have all the predictable bills down that won’t go away without major changes, take a look at the other things you’re spending on. You will probably be pleasantly surprised to learn that even when you factor in such indulgences as date night at Nada or your daily stop at Coffee Emporium, you will still be able to find that little bit of extra money.

And even if it is only $50 per month, if you make saving it automatic through payroll deduction or auto-transfer from your bank, you will be surprised at how quickly you will see a difference. Then as you acquire little windfalls like tax refunds, a raise at work or some other bonus, you will be more inclined to put some of that money toward your goal, getting you there even quicker. So enjoy your gastronomic pleasures, knowing that you can still stick to a budget and achieve your financial goals.

A version of this article was published in Cincy Chic on April 26, 2010

Go Green, Save Green

April 12, 2010

As an avid environmentalist, (I go to ridiculous lengths to divert trash to recycling, just ask my boyfriend!) I am thrilled that going green has become the latest trend. However as with any trend, creative capitalists are finding ways to make a pretty penny with expensive green upgrades like fancy in-home composting systems or shiny new hybrid SUVs that garner gas mileage equal to a standard transmission coupe. The pressure is on to buy the latest green gadgets in order to be cool.

But it doesn’t have to cost you a dime to join the trend and reduce your carbon footprint. No one said you have to spend money in order to become environmentally friendly. To get started, choose eco-friendly projects that are also wallet friendly.


The first step to saving green by going green is kind of a no-brainer. As your mother used to remind you, turn off the lights! Make it a habit to flip off the lights every time you leave a room, even if just for a few minutes. And while it is nice to come home to a brightly lit kitchen, trade leaving the overhead lights on for a low-energy night light that can guide you to the closest switch when walking in the door. Don’t forget to check outdoor and basement lights!

If you don’t mind spending a few bucks that will go a long way in saving you money, change your light bulbs to compact fluorescent light bulbs (CFLs). They cost more than regular light bulbs, but last about ten times longer. According to energystar.gov, if every American home replaced just one light with an Energy Star qualified CFL, we would save enough energy to light more than 3 million homes for a year. Try it!

Another great way to save money while saving the earth is to turn off the tap. Leaving the water running while brushing your teeth wastes about 2 gallons of water. Think of the carton for a gallon of milk &emdash; you’re wasting two of those with each brush! Likewise, don’t let the water run while you’re doing dishes, shaving, or bathing your pets.

Another common way we waste water at home is by flushing bugs, hair and tissues down the toilet. Put these things in the garbage can and save the 2 gallons of water that goes with each flush. You should also wait until your dishwasher is full to run it and try to limit hot water washes to your really dirty whites, using cold water for all other laundry.

Finally, reduce your utility bill and your household emissions by adjusting your thermostat a couple degrees. I’m not suggesting you sweat it out at 80 degrees in July, but how about setting the A/C at 74 instead of 70? And flip those numbers for winter, keeping the heat set closer to 68 and just put on a sweater to stay warm.

Other earth-friendly and free ideas include riding your bike for close-to-home errands, forgoing A/C by opening your windows and drinking tap water rather than expensive bottled water.

I know that most of these ideas are elementary, but consider this to be your reminder to practice the easy green habits before you go out and spend a wad of cash on double-pane windows and solar panels. Yay Earth!

A version of this post was published in the Cincy Chic column “Cents & Sensibility” on April 12, 2010.