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Financial Planning For Young Adults
Dot Blum, "Financial Planning For Young Adults" with Jan Dahlin Geiger, CFP, MBA, and author of Get Your Assets in Gear! Smart Money Strategies & Barbara Malm and Diane Rochford, real estate agents with Jenny Pruitt & Associates, Realtors, talk about their humanitarian passions.
Press Releases
Book Launch Silences Critics
For those who have in recent years criticized that “it has been decades since a readable, effective money management book came on the market”, the complaining can now stop. With the launch of “Get Your Assets in Gear! Smart Money Strategies”, Certified Financial Planner™ Jan Dahlin Geiger is offering an easy to follow “recipe” for getting rich. Not quickly, not with any questionable schemes, but with time and solid advice.
Drawing from her mother’s teachings, passed on to her as a child and young woman, from her 29 years in the financial services industry, and the wealth-building practices of her own sons (guess where they learned . . . .!), Geiger has now made a book available that is of particular benefit to young people on a career path, and from which others can profit as well.
“Getting rich is not hard”, the author says. “I did it and everyone else can also. It does take a positive mindset and a set of sound practices; with that, the rest is easy.”
In “Get Your Assets in Gear! Smart Money Strategies”, Geiger provides a step-by-step guideline for success. She addresses such topics as credit card debt, home- and car-buying, making charitable donations, investing wisely and “living in financial harmony with your partner".
“This fast-moving, smart book shows you how to get your entire financial life organized, and achieve financial independence faster than you ever thought possible”, says self-development author and motivational speaker Brian Tracy.
“Get Your Assets in Gear! Smart Money Strategies” is available from www.amazon.com or www.barnesandnoble.com. Jan Dahlin Geiger is available for speaking engagements. She may be contacted via her publicist, Lya Sorano, at 770-826-4294 or lyasorano@bellsouth.net.
The book’s launch will be celebrated at the author’s office in Atlanta on July 26, where she will be available for brief media interviews from 11 AM to 7 PM.
The Oliver/Sorano Group, Inc. . . . . . boldly providing opportunities that add value to people’s lives.
Atlanta, Georgia, June 29, 2007
Contact: Lya Sorano
Tel 770-826-4294
E-mail lyasorano@bellsouth.netIn the News
Outskirts Press
Money Management Tactics
"Get Your Assets in Gear" provides a formula for financial planning. Well known author, speaker, and Certified Financial Planner practitioner, Jan Dahlin Geiger has packed her book with guidelines, techniques, tactics, questionnaires, tables, and illustrations that help the reader with guidelines for financial freedom.
Attitude changes for, handling debt, budgeting, auto purchases, and buying a home are all included. Important insights are given on the significance of financial harmony in the home. Rewards of tithing, saving, investing, and improving your credit score take on a new importance as the reader prioritizes their spending and saving on the way to getting their assets in gear.
I found Jan's action step suggestions and the format used in highlighting important reminders through the use of insets within the text. I wish I had read and applied these strategies earlier in my formative years. I am taking steps now to consistently apply these exercises, affirmations, and action steps in putting my financial future in order. I am studying my asset allocation, the diversity of my investments, and mutual funds, as well as the consistency and reliability of my financial advisor. I want to initiate a workable budget to assure that my purchasing is in line with maintaining my financial independence. The helpful resources at the end of the book provide an important internet listing for additional material for further study and future reading. Invaluable!
The smart money strategies found in "Get Your Assets in Gear!" are especially important to readers who find themselves swallowed up in credit card debt, those wanting to unlearn childhood misconceptions imitated from misguided parents, or for newly married couples seeking harmony in their financial planning. The book is an excellent resource, a guidebook for attaining financial independence and peace of mind.
Book Review: Get Your Assets in Gear
Posted by Janine Bolon
Monday, July 2, 2007
When I put this book down I looked up and shouted, "YEEEESSSSS!" Finally, I have a book on investing and asset allocation that I can recommend to my clients. I enjoyed laughing with Jan Geiger as she described her passion to become wealthy along with the many stories she told you about her journey. The fact that she assists others now as her vocation is a brilliant attribute to the data in her book.
I always prefer to have an author tell me about their personal journey to wealth and Jan does this in a very easy to read format without the jargon the financial industry uses that confuses me. This is book that is a must read, but also implement what Jan tells you. Don't just read the book and put it down. This is a book you've got to put into daily practice.
Jan has great tips scattered throughout the book along with boxes that highlight major points so you can skim easily through chapters to get the information you want. I liked the fact that she ends each chapter with action steps and then recaps them at the end of her book. For those who wish to become financially independent, this is a must read book. If you are older and just now starting to look at your personal finances, Jan has help for you, too! Get and stay as healthy as you can!!!
You can order Jan's book through Amazon or visit her website, www.getyourassetsingear.com. More comments later on this great book!Posted by The Money Muse at 5:51 AM
http://themoneymuse.blogspot.com/2007/07/book-review-get-your-assets-in-gear.htm
Money Management Tactics
Richard R. Blake, Christian Education Consultant, Book Store Owner"Get Your Assets in Gear" provides a formula for financial planning. Well known author, speaker, and Certified Financial Planner practitioner, Jan Dahlin Geiger has packed her book with guidelines, techniques, tactics, questionnaires, tables, and illustrations that help the reader with guidelines for financial freedom.
Attitude changes for, handling debt, budgeting, auto purchases, and buying a home are all included. Important insights are given on the significance of financial harmony in the home. Rewards of tithing, saving, investing, and improving your credit score take on a new importance as the reader prioritizes their spending and saving on the way to getting their assets in gear.
I found Jan's action step suggestions and the format used in highlighting important reminders through the use of insets within the text. I wish I had read and applied these strategies earlier in my formative years. I am taking steps now to consistently apply these exercises, affirmations, and action steps in putting my financial future in order. I am studying my asset allocation, the diversity of my investments, and mutual funds, as well as the consistency and reliability of my financial advisor. I want to initiate a workable budget to assure that my purchasing is in line with maintaining my financial independence. The helpful resources at the end of the book provide an important internet listing for additional material for further study and future reading. Invaluable!
The smart money strategies found in "Get Your Assets in Gear!" are especially important to readers who find themselves swallowed up in credit card debt, those wanting to unlearn childhood misconceptions imitated from misguided parents, or for newly married couples seeking harmony in their financial planning. The book is an excellent resource, a guidebook for attaining financial independence and peace of mind.
Book Review: Get Your Assets in Gear
Monday, October 22, 2007I happen to receive a free copy of this book signed by the author last week.
This book give you the basics for Personal Finance 101. What interest me the most it gives you money rules to live by that can help you win with money.
The authors list her rules of thumb:
- Spend 25% or less of your gross income on housing (rent or mortgage), utilities, upkeep, house taxes, lawn care, etc.
This is the first I heard of this. I always felt that 25% was just for the house payment, not all household expenses. Smart, because when most people look for a house, they tend to concentrate more on the house payment than other little household expenses.
- Spend 10% or less of your income on car expenses, including your loan payment, gas, maintenance, etc.
I have to agree since cars go down in value. Therefore it should not take up a lot of your paycheck.
- Spend 10% or less on food and dining out.
I can agree with this also.
- Spend 10% or more for your financial freedom.
Not sure if this is short term or retirement savings.
Overall she list very details charts and expenses of where and how much should allocated. She gives good examples.
The book helps you get your entire financial life in order, from tithing to investing and understanding the mental aspects of money.
She discusses being on a spending plan and smart money strategies. She covers more on assets (hence the title) than debt. Although she does speaks about debt in the book, she speaks very little. She mainly concentrates on organizing financial practices and keeping it simple.
So if you are unorganized and need to get your finances in order. This books gives you simple practices for staying on track with your money.
This book is a very good read.
You can read more about the author Jan Dahlin Geiger here
Get Your Assets in Gear” provides a formula for financial planning. Well known author, speaker, and Certified Financial Planner practitioner, Jan Dahlin Geiger has packed her book with guidelines, techniques, tactics, questionnaires, tables, and illustrations that help the reader with guidelines for financial freedom. Attitude changes for, handling debt, budgeting, auto purchases, and buying a home are all included. Important insights are given on the significance of financial harmony in the home.
Jan Quoted in the Media
I hate to think how much money is going to be wasted at the mall this weekend.
The typical American family of four will spend about $6,200 this holiday season, says the National Retail Federation.
Since I turned 18, I doubt if one-fifth of the gifts I've received have really represented good value for money. Maybe it's one in 10.
How about you? Thrilled with those "Italian Stallion" golf balls Uncle Bernie gave you last year? What about that patterned sweater from Aunt Sue?
I thought so.
People work hard for their money, and then they throw it away like this. And it adds up. In total, holiday spending this year will add up to about $475 billion. I hate to think how much is just pointless.Our national savings rate is pitiful. Most people, including many high earners, are woefully unprepared for any kind of retirement. Or even for putting their kids through college.
Before I get inundated with hate mail, I'm not opposed to spending money. I'm just opposed to wasting it. And the problem isn't so much the presents for the children. It's the presents for the adults.
Please don't call me the Grinch. After all, he was the one who thought you could steal Christmas by taking away the presents. It was the residents of Whoville who knew better.So before you go crazy at the mall this weekend, here are some things to think about.
Do you know how much each item is really costing you?
Hint: It's not the number on the price tag.
It's how much you'd have if you saved the money instead.
Invested over 20 years, each dollar is likely to grow to at least $3. That's assuming a pretty reasonable rate of return, of 5.5% a year after inflation.
If you're not making the maximum contribution to your 401(k) plan each year, the number skyrockets. You could have saved that money tax-deferred -- and maybe picked up an employer contribution too.
For high earners who aren't saving, each dollar wasted today could cost them as much as $6 -- in some cases, even more -- down the road.
OK, maybe that "novelty" item for your brother-in-law looks tempting at $50. But how about $300?
Can you declare a truce among the adults?
Sure you can.
"I'm at the point where in my family none of the adults exchange presents anymore," says Jan Geiger, a financial planner in Atlanta, Georgia and author of Get Your Assets In Gear. "We've all basically decided that most of what you get is a waste of money."
Someone "has to take leadership" in calling a truce, she adds.
Failing that, just buy token presents: A book, a box of chocolates, a bottle of wine. Or a gift voucher.
At least buy presents that are going to grow in value.
If you do end up spending a lot on presents, at least don't buy things that will quickly become worthless.
If you think the latest gadget really is worth $300, try an experiment. Go on eBay and find out how much the "must have" gadgets from one or two Christmases ago are selling for now -- even those that are still unused.
It isn't pretty.
There are alternatives. Rare coins, stamps, first editions, original prints, and a few other collectibles make presents that don't completely waste money. (They will also make you look unbelievably classy as a gift-giver on Christmas Day). Obviously, you should do your homework to get the right items.
When it comes to investing in collectibles, the basic rules are: Only buy items that are rare, well-known, and in mint condition. David Lilburne, who runs Antipodean Books in Garrison, N.Y., and is the president of the Antiquarian Booksellers Association of America, advises: "If you are buying a book as an investment, you must buy the best. It doesn't have to be expensive, but it must be in pristine condition."
Buy something babies really want.
Babies and young toddlers don't care what you buy them. It's usually a toss-up whether they enjoy playing more with the toy or the packaging.
If you really want to impress the parents, here's a better idea.
Help them out with college.
Thanks to 529 college-savings plans, the money can grow tax free.
And over 20 years, a mere $100 gift will grow to about $300 (in real, after-inflation dollars). No, it's not much. But it's worth more than that silver plated egg cup with the baby's name engraved on the side or those overpriced designer booties that may never be worn.
And remember, you're not alone. There are probably dozens of friends and relatives desperately hunting for something to buy the new baby. Get them all in on the plan instead and you could easily be looking at thousands of dollars in college money. Just from one Christmas.
Hey, there are worse gift ideas. As you will probably discover next week.
By Liz Pulliam Weston
From MSN Money
September 13, 2007People who retire so early often have several traits in common, said Jan Dahlin Geiger, a Certified Financial Planner and author of the book, "Get Your Assets in Gear! Smart Money Strategies."They're: Allergic to debt."Debt is the opposite of savings," Geiger said, "and you don't get to be rich if you don't save."
Acutely aware of the power of time. Early retirees know that the sooner they put money to work for them, the more they'll eventually have. Even small amounts, if diligently saved and invested, can grow to whopping sums over time, thanks to the power of compound interest.
More interested in their goal than what the neighbors think.You may realize that you can't keep up with the Joneses and have any hope of retiring early (or even of retiring at all, depending on how far you take your consumerism). But you may not understand how very different your life might have to be from those around you to retire young.
The first two couples I'll introduce you to illustrate that point vividly. Let's meet them now.
By Kathy ChU
From USA TODAYIf love is the tie that binds couples together, money is often the wrench that pries them apart.
Money conspires to antagonize couples. It sometimes invites divorce. And though finances have always raised tensions for couples, it may be harder than ever these days to avoid conflict.That's because today's range of family complications — moms leaving and re-entering the workforce, late marriages that bring debt and adult children, shrinking pensions and baffling health care choices — are demanding ever-more financial decisions from couples who can't even agree on whether the house is warm or cold.
"Our lives are more complex, and it's made communications around money more complex," says Carol Anderson, president of Money Quotient, which provides tools for financial advisers. "There are more bad emotions around money."
Which financial issues most often cause strife? Spending too much and saving too little, according to couples who responded to a USA TODAY/CNN/Gallup Poll in March. (Many couples don't admit to financial troubles, though. More on that later.)
Making matters worse is that couples don't talk much about money before committing to each other. Nearly two-thirds of married couples who responded to USA TODAY's poll said they talked little or not at all before the wedding about how to combine their finances.
"It's the No. 1 taboo topic," says Syble Solomon, a motivational speaker who created Money Habitudes, playing cards for planners and counselors to use in getting couples talking about money. "People will tell you about their intimate sexual lives before they'll tell you about their money."
Talking is just a start. Couples need help in planning for retirement, saving more and spending less, according to a survey the Financial Planning Association (FPA) conducted of its members in March and April for USA TODAY. (Of the 1,500 planners polled, 189 answered the survey.)There's a big problem, though: The USA is a nation of spenders, not savers. The personal savings rate is negative, meaning Americans spend more than they earn. And the portion of disposable income going toward paying down debt — including mortgage and credit card debt — is near a record high. Households with at least one credit card carried an average of $9,498 in card debt in 2005, nearly twice the level of a decade ago, according to CardWeb.com.
Overspending is damaging
"Overspending is no different than being an alcoholic or drug addict" in its effect on a relationship, says Jan Dahlin Geiger, a financial planner in Atlanta. "What one person is doing could have a huge negative impact on the couple's finances."
In the worst-case scenario, overspending can cause an irreparable rift in a relationship. That's what happened with Ken Miner, 39, of Lenexa, Kan. Miner says his ex-wife's habit of "spending more than I made" helped lead to their divorce over a decade ago.
Part of the problem, he concedes, was the couple's lack of communication about money: "I was pretty enamored with the idea of being in love. At 23, finances weren't that important."
Many couples don't admit to having financial disagreements at all. Most of those polled by USA TODAY said they and their spouse or live-in partner were doing an "excellent" or "good" job with finances; 57% said they and their mates rarely disagree about money.
Yet the evidence suggests otherwise. Research scientist Jay Zagorsky tracked married couples born from 1957 to 1964 and found that money is consistently one of their top three topics for argument. Couples can't agree even on how much debt, income and assets they have, his research shows.
"Perception does not match reality," says Zagorsky, who works at Ohio State University's Center for Human Resource Research. "People don't want to admit they're doing terrible."Money is a home wrecker
In the worst cases, money can be a home wrecker. In fact, two of the five couples USA TODAY originally chose to profile for this series split up a few weeks later. At least one partner within each couple said the breakup was due, in part, to the conflicts that ignited once they began to dig into their finances with the help of a financial planner. (USA TODAY chose two other couples to replace the ones who split up.)
A couple's efforts to gain control of household finances can be perilous work, with each partner tugging and pushing, like two people clinging to opposite sides of a raft. Fear of sinking can paralyze them.
That's why planners urge couples to recognize their specific challenges and tailor a plan to tackle them. This can help move a relationship closer to financial harmony.
Some of the issues that have complicated couples' finances in recent years, for better or worse:
•Marrying later. With later marriages, many people bring more assets and debt into a relationship. A result is "two very strong opinions" about managing money, with each partner having managed his or her own money for years, says Sheryl Garrett, editor of On the Road: Getting Married.
"If you wait until 30 to get married, you've been in a series of jobs, accumulated benefits, maybe 401(k) assets; you might even have a house," Garrett says. "It makes things more complicated."
The modern young couple looks something like Bryan and Marci Harman, who married in October. He was 32; she was 25. Now, they have three houses, four retirement plans and six bank accounts.
Each owned property before marriage. They're now trying to sell his former house and rent hers. Meantime, they've bought another house in Cincinnati, where they moved this year to be near her family and escape the steep cost of living in the Washington, D.C., area."The main concern for us is making sure that we have money every month" for the three mortgages, says Marci, who, by mutual agreement, takes charge of the joint finances. "That's added stress. Other than that, it's just trying to put together money for the future."
•Two-income families. The high number of households with both adults working has created "a vicious cycle of stress," says Bryan Clintsman, a financial planner in Southlake, Texas. "We tend to have a craving for more and more stuff. This creates more spending, which causes people to work harder."
As health care costs escalate and employers cut pensions — shifting the burden of retirement saving onto employees — couples face pressure to work harder and longer.
The tension between work and family life can bedevil two-income couples such as Thuy and Thai Nguyen, of Woodbridge, Va. The Nguyens are considering selling the family's beauty salon so Thuy can focus on their two kids, Dylan, 7, and Sydney, 3. But they're concerned about the consequences of only Thai working full time.
"I'm kind of worried about giving up the income," says Thuy, 36, who works at the salon five days a week, 10 hours a day. "But I want to spend time with the kids while they're young."
The two don't agree on everything. But they talk through financial decisions and agree in this case, because "the kids are the most important things" in our lives, says Thai, 39, a software engineer.
•Balancing financial control. With more women earning paychecks, more of them want joint control over money matters.In 2004, wives earned more than their husbands in about one-fourth of dual-earner families, according to Census data. In 1981, that was true in only about one-sixth of two-income families.
The greater a woman's education level and earning potential, the more bargaining power she tends to have in household decisions — including financial ones — according to research expected to be released this year by economists Jennifer Ward-Batts of Claremont McKenna College in California and Shelly Lundberg of the University of Washington in Seattle.It's still more common to have one person take the lead on finances. In the FPA poll, 75% of planners said men make the majority of the family's investment decisions. About one in five couples make these decisions jointly, the planners' survey showed.
The person who makes the investment decisions — and thus controls the bulk of family assets — tends to manage the couple's long-term financial goals. The other partner may take on short-term tasks, such as paying monthly bills. Nearly 60% of FPA planners say women tend to pay the bills.
In general, women know less about investing but make fewer mistakes, such as holding a stock for too long, when they do invest, according to 2004 research by Merrill Lynch Investment Managers. Men tend to enjoy investing more but are also more likely to invest without research.When both spouses help make financial decisions, they're more likely to reach their goals, says Carrie Schwab Pomerantz, chief strategist for consumer education at Charles Schwab.
The couple may be able to attain better investment returns as well, according to Pomerantz, if one spouse is conservative with investments while the other takes risks, because, "You balance each other out."
•Non-traditional relationships. More unmarried couples, including same-sex partners, are setting up house. The number of unmarried couples living together shot up 72% from 1990 to 2000, to about 5.5 million, according to Census figures. Roughly one in nine of these households are unmarried same-sex partners. This has raised thorny issues about how to combine assets and divide them if the pair ever split up.
In most states, being part of an unwed couple gives you no specific right to inherit property from your partner. Nor do partners have a say in each other's medical care and financial affairs unless those wishes are spelled out in advance.
Mary Ware, 60, and Mary Frances Stuck, 56, addressed some of those issues through a domestic partnership agreement and wills. They also crafted medical powers of attorney — giving each other the power to make medical decisions if one of them falls seriously ill.
They can't legally marry in their state, New York, though they've been together for 28 years.
"When you do planning, it really does frustrate you," says Ware, an associate dean at the State University of New York College at Cortland. "You find a way around most everything; there's just one more step."•Divorce and remarriage. Couples who married in recent years have a 40% to 50% chance of divorcing or separating during their lifetime, according to the National Marriage Project, a research organization at Rutgers, the State University of New Jersey.
How often is money an issue in divorces? Nearly 40% of financial planners who have worked with divorcing couples say it's frequently a "key factor" in couples' decisions to split up, according to the FPA's survey.
"(Divorcing) couples can't agree on spending styles, earning capacities and what to spend money on," says Susan Pease Gadoua, a divorce therapist in San Rafael, Calif.Most people who divorce end up marrying a second and sometimes a third time. Those couples bring assets from former relationships. And that complicates the issue of which assets are his, hers and theirs.
Couples who have been married before tend to be "more suspicious" of each other and are increasingly doing "marital due diligence" before the wedding, says Thea Glazer, a financial planner in San Diego. "They conduct background checks on each other to make sure there are no outstanding liens" that could hurt them financially later on.
Those who remarry are more likely to draft prenuptial agreements, spelling out who gets what in case of divorce. And planners say those couples tend to make financial compatibility a higher priority the second time around.
Both Ken Miner, whose first marriage ended in divorce, and his fiancée, Kris Prueter, 42, are savers. He says they have "complementary" financial habits — she plans to handle the daily financial tasks, while he will take charge of investments — and have discussed money extensively during their five-year courtship.
The couple plan to live together with two kids from her first marriage and one from his.
"Coming out of a marriage that was unsuccessful, it provided me with an opportunity to educate myself as to what I was looking for in a long-term partnership," Miner says. "Fiscal compatibility and financial responsibility were in the top five.
By Laura T. Coffey
From MSNBC
Oct 15, 2007Do you consistently feel as though you’re barely scraping by even though your family’s income level looks pretty good on paper? If so, you’re not alone.
Thousands of middle-class families across the country are experiencing the sense of being squeezed, despite the fact that their annual incomes are far above the U.S. median household income of $48,201. Even families making double that amount may struggle at times to cover their expenses, let alone save anything after all their bills are paid.
How can this be? In their book “The Two-Income Trap: Why Middle-Class Mothers and Fathers Are Going Broke,” Elizabeth Warren and Amelia Warren Tyagi report that the average two-income family “earns far more today than did the single-breadwinner family of a generation ago. And yet, once they have paid the mortgage, the car payments, the taxes, the health insurance, and the day-care bills, today’s dual-income families have less discretionary income — and less money to put away for a rainy day — than the single-income family of a generation ago.”
That’s right, folks — you’re not imagining it. Your parents had an easier time making ends meet than you are. Especially if you live in an expensive area of the country, and even more especially if you have children, it can be shockingly easy to watch your discretionary income evaporate before you even know what happened to it.
Can you do anything to combat this punishing trend? Yes, you can. The following tips may not resolve all your money worries, but hopefully they will give you some practical ideas for lightening your load.
1. Recognize when you’re in the danger zone. If you’re part of a two-income household, how strapped are you? To be more specific: If anything at all were to go wrong — say, a job loss, a divorce or an illness that prevented one of you from working for a time — could all of your bills be covered by just one income instead of two? If your answer to this question is no, it’s time to start reflecting on how much money you have in savings. Most of us know that we should have an emergency fund stashed away that could cover six months of living expenses — and most of us haven’t gotten around to doing that. The psychological benefits of having this cushion cannot be overstated, however. The easiest way to start building such an emergency fund is to view the amount you stash away as another monthly bill. Could you realistically handle one more $50 bill? How about a $150 bill? Immediately start squirreling away a regular chunk of change for yourself.
2. Think about your housing costs. Have you and your partner stretched yourself to buy a house that you only could afford by becoming “house poor” and dedicating big chunks of both incomes to the cause? This can be a very dangerous practice. (Review tip No. 1 to understand why.) Many people get themselves into this pickle, though, because they want to live in a neighborhood in a good public school district. Parents are often willing to do almost anything to help their children get a good start in life education-wise. That said, you won’t be doing your kids any favors if you spread yourself too thin with this crucial investment. Heck, you actually could lose the roof over your heads if a single thing goes wrong in your lives, even temporarily. So what should you do? You could rent for another year or two or three in that same neighborhood with the good schools before buying a home. Or, as inconvenient as this may be, you could buy a home that’s much smaller than the home you want. The main objective is to make sure that your house or rent payment can easily be covered by just one income. If you’ve already taken on the monster mortgage and you feel yourselves sinking, consider simplifying your lives by downsizing if you possibly can.
3. Reflect on your wheels. It can be easy to ridicule Americans who drive around in gleaming, large vehicles and saddle themselves with whopping car payments in the process. Frankly, it’s risky to do this, especially if you’re already feeling squeezed — but families with children often take on this added expense for reasons that are anything but frivolous. Newer vehicles tend to have the highest safety ratings — and who doesn’t want to keep their kids safe? Also, depending on how many children you have, you may opt for a larger vehicle so you have enough room for those legally mandated car seats and booster seats. All of that said, here are some ideas to help you save money in this area:
- Have just one car payment instead of two. One of your cars could be the family vehicle, and the other one could be a much-less-expensive-but-dependable used car that doesn’t require a car payment and hopefully relies on much less gasoline. Keep driving the used car as long as you can, even if it’s held together with duct tape.
- Own just one car instead of two. It goes without saying that a car isn’t a luxury in many pedestrian-unfriendly parts of the country — and if you both work, it’s easy to see why you each may need your own car. But is it remotely possible for one of you to commute to work in a different way? Walking, riding a bike, taking public transportation, carpooling or tapping into a car-sharing program could help you save thousands of dollars a year.
- Qualify for independent financing for that family vehicle. It’s a common mistake to think that the dealership needs to arrange your car loan for you. Be aware that such financing is a key source of profits for car dealerships, and it’s quite likely that you could find a loan with a better interest rate elsewhere.
4. Increase your deductibles. Deductibles are the sums of money you have to fork over before your insurance policies come to the rescue. You could save a bundle by contacting all of your insurers — for your home, automobiles and health and disability plans — and bumping your deductibles up by a few hundred dollars apiece. Rick Brooks, a financial planner from Solana Beach, Calif., pointed out why this approach often makes sense. “Few people will file a claim with an insurance company for a $500 repair because of the effect it will have on (their) insurance rates,” Brooks said. “Yet many policy deductibles are set at just that amount. I suggest that people think about what they would be willing to pay out of pocket. If that’s $1,000, then set the deductible at $1,000. This can have a huge impact on the cost of insurance for a family.”
5. Treat credit-card debt like the plague that it is. Unfortunately, many families and individuals grappling with excessive money worries have gotten themselves into a bind with credit cards. Credit cards can be your friends — but only if you’re scrupulous about paying your balances off in full and on time each month. If you’re already weighed down with debt, though, try this: Transfer your credit-card balances to a card with a lower interest rate right away. You’ll save $730 if you transfer a $2,000 balance from an 18-percent card to an 8.25-percent card and then pay off your balance at a rate of $50 a month. Even better, transfer balances to cards with rates of 0, 1 or 2 percent if you can and concentrate on paying them off entirely while those low rates last. Here are some additional insights from Edward Gjertsen II, a financial planner in Glenview, Ill.: “I created the ‘Seven-Day Cash Challenge’ that has clients put away the credit card and use cash — (not a debit card, but cash) — to pay for most everything for seven days. This helps them quickly realize how much flows out in everyday expenditures. … From this we build upon the premise (that) it’s not what you save that is critical to wealth-building, it’s realizing what you spend.”
6. No matter how strapped you are, don’t skimp on your retirement savings. Saving for retirement may seem like a low priority when you’re feeling squeezed. But in many cases, you can view your contributions to a 401(k) or 403(b) tax-deferred retirement plan as an instant raise. That’s because many employers will match your contributions up to a certain point. Don’t let such free money slip away! Even if you don’t get a match from your employer, get in the habit of regularly socking away at least some money for retirement. You’ll be glad you did so at tax time — and in your later years as well. As William Keen, a financial planner from Norcross, Ga., put it: “Remember that kids can borrow for education, but you can’t borrow for retirement.”
7. Play the percentages game. Jan Dahlin Geiger, author of the book “Get Your Assets in Gear! Smart Money Strategies,” recommended that people should decide up front how to allocate their spending by percentages and then work out the details afterward. She provided this example:
- Total income: 100 percent.
- Long-term savings: 10 percent. (This is savings for financial independence.)
- Short-term savings: 5 percent. (This is for an emergency fund, repairs and unexpected expenses.)
- Taxes: 25 percent.
- Housing expenses: 25 percent. (This includes mortgage/rent, utilities, repairs, upkeep, landscaping.)
- Car expenses: 10 percent. (This includes car payments/savings, insurance, gas, repairs.)
- Everything else: 25 percent. (This includes food, clothes, vacations, gifts, expenses for children, restaurants, entertainment and the million other things that pop up.)
“Most people who take time to do this exercise realize they are spending far more than 25 percent on housing and far more than 10 percent on cars,” said Dahlin Geiger, a financial planner in Atlanta. “The big ‘aha’ finally hits and they realize why they can’t save anything. … Until you look at the big picture like this, most people are just throwing Band-Aids at their situation.”
8. Pay careful attention to your tax bracket. Yet another reason many two-income families feel pressured financially is that they often make just enough money to stop qualifying for valuable tax credits, such as the child tax credit. “I do a lot of tax work, and middle-class families are the ones that get whacked,” said Daniel Wishnatsky, a financial planner in Phoenix. Wishnatsky recommends working with a tax professional, not simply a tax preparer, to find ways to minimize taxes. “This is a huge issue,” he said. “If nothing else, folks need to realize that a nice raise … requires prudent planning.”
9. Find a reputable financial planner. You can attain real peace of mind by getting control of your money matters and putting a smart financial plan in place for the years to come. You can accomplish this by hiring a fee-only financial planner through the National Association of Personal Financial Advisors, the Financial Planning Association or the Garrett Planning Network. (Fee-only planners do not make commissions by selling you certain financial products.) You may end up paying an hourly rate of about $150 to $250 to get the help you need – not dirt cheap, but potentially worth it if you can get your house in order for the next five to 10 years in the span of a few hours. When contacting the organizations referenced here, specify that you’re looking for a fee-only financial planner. Depending on your needs, you could spell out that you’re looking for a fee-only planner who also is an experienced tax professional.
10. Understand your money personalities. This last tip is a special one just for couples. In order to apply any of the tips suggested here successfully, you’re both going to need to be on the same page together. This can be difficult if you have wildly different money personalities. To find out whether you do, take this quick quiz at Moneyharmony.com. Compare your answers and results carefully, and use this as a springboard for a frank — yet non-judgmental — conversation about your approaches to money. Remember to stay calm and take lots of deep breaths!
By Cynthia Dermody
From Reader's Digest
September 2006If you're eligible, yes. And you probably are. It used to be that you needed a certain employer to join. Now, just living in a specific area might be all you need to cash in on higher interest rates for deposit accounts and lower rates on loans.
Recently, the average interest rate on a credit union (CU) money market account was 0.75 of a point higher than the bank average; the typical CU credit-card interest rate was nearly 3 points lower than a bank-issued card.
"In the long run, that can really add up to savings," says Jan Dahlin Geiger of the Financial Planning Association, who has been a CU member for 35 years. At CUs, which are nonprofit, earnings are returned to the members in the form of lower loan rates or services such as free checking. The one thing you won't save any money on: 30-year mortgage rates. CUs and banks tend to have similar rates.
Not sure where to find a CU? Visit www.creditunion.coop or call 800-358-5710. And you may still want to keep a bank account for easier ATM access.
By ByBrett Arends, Mutual Funds Columnist
From: TheStreet.com
July 23, 2007
On the surface, so-called target-date mutual funds sound like a great idea. You name the date you plan to retire and select the appropriate fund.That, in theory, is your only decision. Just invest regularly in that one fund, and it does all the rest -- magically rebalancing itself until retirement day.
So much for theory.In practice, these retirement funds aren't always what they seem. You may believe you're getting a "one-decision" fund. But because no two funds are alike, it's hard to know what's been decided. Fund companies have been rolling out a greater number of target-date mutual funds lately, with many of them ending up in 401(k) plans.
Imagine two people who work at adjacent desks, and both plan to retire in 2030. Three years ago, one of them put $10,000 into the T. Rowe Price 2030 Retirement fund (TRRCX). Today, she's pretty happy. That money has already grown to nearly $15,000. The T. Rowe Price fund is a top performer in that period, earning 14.36% a year.
Her colleague also put $10,000 into a 2030 retirement fund three years ago, but she chose the 2030 NestEgg fund (NEHPX) run by American Independence funds. Today, she's got just $13,000 -- almost $2,000 less.
This isn't an isolated case. Look at the performance data tracked by Lipper, and something surprising jumps out. Target-date funds are all over the place. So far this year alone, some year-2030 funds are up 10.3% while others are up a paltry 4.7%.
Even more surprising: This holds true even for the fundholders who are retiring soon. You would expect all "2010" funds to be playing it safe. The reality? The T. Rowe Price 2010 fund (TRRAX) is up 37% over the past three years. The one from Wells Fargo (WFOCX) is up less than half as much: just 16%.
What's going on?
In fact, these are fairly different funds trying to do different things. Both Wells Fargo and American Independence defended their funds' performance, pointing out that these are meant to be very conservative investment vehicles. That means fewer stocks, more bonds. It also means, depending on the firm, little or no exposure to riskier asset classes such as international equities, emerging markets and high-yield bonds.
As a result, you would expect these funds to fall behind their competitors when markets are rising, as they have for the past few years, but to prove much safer investments if things turn volatile. (Wells Fargo also pointed out their funds were "relaunched" a year ago. American Independence says it will be making some changes next month.)
Eric Rubin, president of American Independence funds, said his NestEgg funds are designed to be an appropriate "default option" in a company's 401(k) plan. Right now, he notes, the default option is often a money-market fund. That means low returns and virtually no risk. Rubin argues his funds offer much better long-term returns for minimal extra risk.
Fair enough. And if the aim is to coax unsophisticated long-term investors away from cash, he's doing them a big favor. Cash is a terrible long-term investment.
But that makes his funds a very different vehicle from those offered by companies such as Fidelity and T. Rowe Price, which are much more heavily weighted toward equities and other asset classes. These are seeking to offer greater long-term returns in exchange for greater volatility. They have, inevitably, done best over the past few years.
Jan Dahlin Geiger, a certified financial planner in Atlanta, says most target-date funds are too conservative anyway. "Most of them basically have you dying 10 or 15 years after you retire," she says. As a result, they move too much money into bonds too early. Most people, she says, should plan to live to be 90 or 100 years old, and that means keeping more stocks in their portfolio for longer.
Geiger believes there are better options than a target-date fund. But she says you should add 10 or 20 years to the target date if you do invest in one.
By Eileen Ambrose
From Baltimore Sun
September 9, 2007If you're like many 20-somethings, you're shouldering thousands of dollars in student loans, carry a balance on a credit card and try to make ends meet on an entry-level salary.
So the notion of saving and investing - especially for retirement - may seem impossible or something to push off.
But you may be in a better position than you know. Twenty-somethings have an asset that can be more valuable than cash: time. Money invested today - even small amounts - can grow into big sums over decades.
The important point is to get started, so you can take advantage of these years.
"The power of that compounding over time is incredible," says Lance Alston, a Dallas financial planner.
Consider this math from Alston: Let's say you're 25 and save $400 a month for 10 years and then stop saving. Your investments earn 10 percent a year. By the time you're 60, the $48,000 you contributed has grown to $911,736.
But if you wait to start saving until 35, you would have to put away $1,037 for 10 years - a total of $124,440 - to come out with $911,299 at 60. And you would have to set aside much, much more if you don't start until your 40s and 50s.
Muskee Books, who recently turned 24, is sold on saving and investing. He just wants to know how to get started.
"Most people I know have a minimum of $30,000 and $50,000 in debt," says Books, a physical education teacher at a Howard County elementary school. "I was lucky enough to get through college with my parents helping me out."
Books has other advantages besides being debt-free: He earns $42,500 as a teacher and about another $9,000 as a personal trainer. That's a good income for someone his age. As a teacher, he will receive a traditional pension that will pay him a monthly paycheck for life when he retires. Many employers either don't offer pensions or are doing away with them.
But even those with pensions need to save for retirement.
Pensions typically replace 30 percent to 50 percent of your income during your last year of work, which won't be enough to maintain your lifestyle, says Indianapolis financial planner Grace M. Worley. And pensions usually don't keep up with inflation.
Also, to qualify for a full pension, you need to spend decades with an employer. Many teachers leave the profession within five years. So if Books were to switch careers, any pension benefits he would have earned would be small. Books initially should save like his peers who don't have a pension, says Jan Dahlin Geiger, an Atlanta financial planner.
So for Books, and others in their 20s, here are tips to getting started:
Make retirement a priority: Sure, it's decades away and you may have other debt to pay off, but retirement will be your biggest financial goal in life. Assume Social Security will be around when you retire, despite all the doomsday predictions. It won't be as generous as today.
"If you want to have a comfortable retirement, the number to save is the first 10 percent of whatever you make," Geiger says.
If 10 percent is a stretch now, start with 3 percent or 5 percent. Then increase your savings each year by at least 1 percentage point when you get a raise. The important thing is to get in the habit of saving.
Where to save? Begin with your employer's 401(k), if available. It makes saving easy because money comes directly out of your paycheck and into the investment account. You can set aside up to $15,500 a year. Many employers match workers' contributions. That's free money.
You won't pay taxes on the money upfront, but you will do so when it is withdrawn in retirement. Cash out before age 59 1/2 and you'll owe taxes and typically a penalty.
Books, like others working for nonprofits, has a 403(b) instead of a 401(k). The plans are similar, although he doesn't get an employer match.
If your employer doesn't offer a retirement plan - or doesn't match your contributions - consider a Roth individual retirement account. Money goes into a Roth IRA after taxes have been paid, so you don't get a tax break upfront. But after that, you never will have to pay taxes on this money - even the earnings - when you pull it out in retirement.
"For someone in their mid-20s, that is 40 years of tax-free growth. That's huge," Worley says.
You can open a Roth with an investment company and set it up so contributions are made directly from your paycheck or bank account. The most you can set aside this year is $4,000.
Roth contributions can't be made once income reaches $114,000 for singles and $166,000 for married couples filing a joint tax return. That's another reason to invest in a Roth now. Your income later may be too high to take advantage of a Roth.
Choosing investments: Within a 401(k), 403(b) and Roth, you will have a variety of investment options. When starting off, simplicity is best. And there's nothing simpler than a target-date retirement fund.
You choose the fund that bears the date closest to the year you expect to retire. Someone in their 20s might select a 2045 or 2050 fund. The fund does all the work for you. It will choose other funds to invest in and gradually adjust the portfolio to be more conservative as retirement nears.
Being in your 20s, you can afford to be more aggressive with money that won't be needed for decades. That means your portfolio initially should be heavily weighted in stocks, which entail some risk but yield the biggest returns over the long haul. The typical 2045 and 2050 target-date retirement funds, for instance, will hold 90 percent or more of their assets in stock funds.
If this option is not available to you, Worley suggests starting with a global stock mutual fund that will hold shares in foreign and U.S. companies. "Start with one and build on that for several years," she says. "It's a good anchor fund."
Later, when you get more comfortable with investing, you can always switch your investments if you want.
Other goals: Your biggest debt may be student loans, but that is not the debt you need to tackle first.
"Don't pay off student loans any faster than you have to. The interest rate is probably low and [the interest] is probably tax-deductible," says Stuart L. Ritter, a financial planner with T. Rowe Price Associates. "There are better places to put your money."
One of them is to pay down credit-card debt. Start by not racking up any more charges and always pay more than the minimum payment.
At the same time, slowly build a cash reserve. This will be the money you can use for emergencies rather than credit cards. Start with a goal of setting aside one month's worth of expenses. Later, try to build that to three.
Because you will need to use this stash at any moment, you can't risk putting it in the stock market. Put it in a savings account - not a certificate of deposit - in the bank. Shop at www.bankrate.com for FDIC-insured online banks that pay a higher interest rate than conventional banks.
These online accounts are also a good place to park money if, like Books, you're saving for a down payment on a house in a few years.
All this might sound like all saving and no fun, but it will put you in a far better situation years from now than many in your parents' generation find themselves today
By Eileen Ambrose
From Chicago Tribune
September 9, 2007Many twentysomethings are shouldering thousands of dollars in student loans, carrying a balance on a credit card and trying to make ends meet on an entry-level salary.
So the notion of saving and investing - especially for retirement - may seem impossible or something to put off.
But they may be in a better position than they know. Twentysomethings have an asset that can be more valuable than cash: time. Money invested today, even small amounts, can grow into big sums over decades.
The important point is to get started, to take advantage of these years.
"The power of that compounding over time is incredible," said Lance Alston, a Dallas financial planner.
Consider this math from Alston: Let's say you're 25 and save $400 a month for 10 years and then stop saving. Your investments earn 10 percent a year. By the time you're 60, the $48,000 you contributed has grown to $911,736.
But if you wait to start saving until 35, you would have to put away $1,037 for 10 years - a total of $124,440 - to come out with $911,299 at 60. And you would have to set aside much, much more if you don't start until your 40s and 50s.
Even those who stand to receive pensions need to save for retirement.
Pensions typically replace 30 percent to 50 percent of income during the last year of work, which won't be enough to maintain your lifestyle, says Indianapolis financial planner Grace Worley. And pensions usually don't keep up with inflation.
Also, to qualify for a full pension, workers need to spend decades with an employer.
So here are tips on saving:
- Make retirement a priority. Sure, it's decades away and you may have other debt to pay off, but retirement will be your biggest financial goal in life. Assume Social Security will be around when at retirement, despite all the doomsday predictions. But it won't be as generous as today.
"If you want to have a comfortable retirement the number to save is the first 10 percent of whatever you make," Atlanta financial planner Jan Dahlin Geiger said.
If 10 percent is a stretch now, start with 3 percent or 5 percent. Then increase savings each year by at least 1 percentage point when a raise is awarded. The important thing is to get in the habit of saving.
Where to save? Begin with an employer's 401(k), if one is available. It makes saving easy because money comes directly out of your paycheck and into the investment account. You can set aside up to $15,500 a year. Many employers match at least a portion of workers' contributions. That's free money.
You won't pay taxes on the money upfront, but you will do so when it is withdrawn in retirement. Cash out before age 59½ and you'll owe taxes and typically a penalty.
If your employer doesn't offer a retirement plan or doesn't match your contributions, consider a Roth individual retirement account. Money goes into a Roth IRA after taxes have been paid, so you don't get a tax break upfront. But after that you won't have to pay taxes on this money - even the earnings - when you pull it out in retirement.
"For someone in their mid-20s, that is 40 years of tax-free growth. That's huge," Worley said.
You can open a Roth with an investment company and set it up so contributions are made directly from your paycheck or bank account. The most you can set aside this year is $4,000.
Roth contributions can't be made once income reaches $114,000 for singles and $166,000 for married couples filing a joint tax return. That's another reason to invest in a Roth now - your income later may be too high.
- Choosing investments. Within a 401(k) and Roth you will have a variety of investment options. When starting off, simplicity is best. And there's nothing simpler than a target-date retirement fund.
You choose the fund that bears the date closest to the year you expect to retire. Someone in their 20s might select a 2045 or 2050 fund. The fund does all the work for you. It will choose other funds to invest in and gradually adjust the portfolio to be more conservative as retirement nears.
Those in their 20s can afford to be more aggressive with money that won't be needed for decades. That means a portfolio initially should be heavily weighted in stocks, which entail some risk but tend to yield the biggest returns over the long haul. The typical 2045 and 2050 target-date retirement funds, for instance, will hold 90 percent or more of their assets in stock funds.
If this option is not available Worley suggests starting with a global stock mutual fund that will hold shares in foreign and U.S. companies. "Start with one and build on that for several years," she said. "It's a good anchor fund."
Later, when you get more comfortable with investing, you can always switch your investments if you want.
- Other goals. Your biggest debt may be student loans, but that is not the debt you need to tackle first.
"Don't pay off student loans any faster than you have to. The interest rate is probably low and [the interest] is probably tax-deductible," said Stuart Ritter, a financial planner with T. Rowe Price Associates. "There are better places to put your money."
One is to pay down credit card debt. Start by not racking up any more charges and always make more than the minimum payment.
At the same time, slowly build a cash reserve. This will be the money available for emergencies, rather than resorting to credit cards. Start with a goal of setting aside one month's worth of expenses. Later, try to build that to three.
Because you will need to use this stash at any moment, you can't risk putting it in the stock market. Put it in a savings account - not a certificate of deposit - in the bank. Shop at www.bankrate.com for FDIC-insured online banks that pay a higher interest rate than conventional banks.
These online accounts are also a good place to park money if you're saving for a down payment on a house in a few years.
All this might sound like all saving and no fun, but it will put you in a far better situation years from now than many in your parents' generation find themselves today.
By Tamara E. Holmes
From Bankrate.com
November 21, 207With holiday sales expected to reach $474.5 billion this year, retailers will be pulling out all the stops to get you to spend more money than you initially planned.
It's easy to get carried away with the spirit of the season and to overspend when shopping for gifts. Here are seven ways you can bust your budget without even trying.
Blow your budgetWith Black Friday and Cyber Monday suddenly upon us, retailers will be pulling out all the stops to get you to spend more money than you initially planned. Here's what not to do.
Top 7 budget busters:1. Don't make a list
2. Act like Santa Claus
3. Go overboard with gift cards
4. Grab the first thing you see
5. Wait until the spirit moves you
6. Put it on plastic
7. Buy now, pay later1. Don't make a list
And don't check it twice. If you don't know who you're shopping for or how much you're going to spend, you're basically playing Russian roulette with your finances -- maybe you'll have enough to cover your costs and maybe you won't."The easiest way to avoid overspending is to sit down and make a list of everyone you are going to buy a gift for," says Jan Dahlin Geiger, author of "Get Your Assets in Gear! Smart Money Strategies." "Decide first how much money you are willing to spend overall, then make an allocation by person."
Of course, you've got to stick to the list for it to work. If you find a great deal and can buy the perfect gift while spending less than your allotted amount on the person, don't rush to spend the money you saved -- consider yourself ahead of the game.
