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Money Management

May 16
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3 Financial Tips for Recent Young Widows

By Insurance, Money Management No Comments

I recently did a radio interview where I was asked to give a young man who is a recent widow money tips. He is now a single father to three young boys and had concerns about how to deal with his new financial situation. Here is what I shared with him and the radio listeners.

Losing a loved one like a spouse, that is so significant to the family, is devastating. Adding to the responsibilities of the spouse that has past can add to the stress and fear of the new young widow. While there is so much that needs to be done to keep the family structure in place, here are 3 things to do for the household finances.

#1. Create a New Household Budget

There is either a decrease in the household income, an increase in household expenses or both. Most of the time the surviving spouse not only lose their loving partner, they may also lose the associated income that contributed to the household’s financial stability. If the late spouse was a stay at home mom or dad, new expenses like daycare or after-school care may be added to the household expenses. If this is the case, a new household budget is necessary.

Writing out all of the existing and new household expenses will help the surviving spouse make important financial decisions, like whether to downsize living expenses, cut out or reduce certain activities, or necessity of adding to their income stream.

Knowing the financial position of the family is just as important as creating and working towards financial goals.

#2. List and Prioritize New Financial Goals

The devastation of losing a spouse may pause or change your financial goals.

Once your new household budget is established and stabilized, new or modified financial goals must be executed. Financial goals, like paying off debt, saving for retirement, saving for children’s education, or that family vacation, can still happen. However, with potentially limited or reduced income, they may need to be prioritized. It’s harder to catch multiple balls thrown in the air for one person, so focus on which financial balls to catch (financial goals to work) on first, second, third, etc.

Just never stop working towards accomplishing those financial goals.

#3. Update Beneficiaries, Wills and Life Insurance

Update Beneficiaries

This is a tough one to do, especially if the loss of a spouse is recent. However, it is the best time to get it done so it won’t have to be dealt with it later or forgotten about.

Update beneficiary information on all financial, medical and employment documents.  If the child(ren) are under the age of eighteen, designate a trusted family member or friend that will carry out the wishes to financially take care of them. Or, establish a Trust and make the Trust the beneficiary. With a Trust, the Executor will legally carry out the disbursement wishes for each of the beneficiaries.

Update or Create a Will

Update the Will, as necessary, and designate a family member or friend to be the estate executor. If a will is not in place and an estate executor is not designated, it is called dying “intestate.” Which means …

“The intestacy laws of the state where you reside will determine how your property is distributed upon your death. This includes any bank accounts, securities, real estate, and other assets you own at the time of death.”

Having a Will is especially important to have if there are children so that a trusted guardian is designated to take care of them.

Click here to read “10 Easy Steps to Writing a Will.”

Update or Get Life Insurance

Life insurance can be a financial blessing by covering final expenses, paying off debt, replacing the late spouse’s income, establishing or adding to an emergency fund, retirement account or educational fund for the child(ren). However, not having life insurance can cause major financial chaos to the surviving family.

This is the time to re-evaluate existing policy(ies) to make sure it is enough for the family or to obtain life insurance to protect the family from financial hardship.

If the late spouse had life insurance, after the final expenses are handled, consider using it to fund one or a few financial goals, like debt elimination, retirement savings or children’s college fund.  Avoid spending it on lots of nice things or places that will not be beneficial to the family’s financial future.

If the late spouse did not have life insurance, follow steps one and two, then speak with a Licensed Life Insurance Agent to discuss options. Just remember that one size does not fit all when it comes to Life Insurance and the most important question that needs to be asked before shopping for life insurance is:

“What do I want the Life Insurance to do for my family and while I’m alive.”

Keep in mind that Life Insurance does not have to be death insurance. Life insurance can be a financial tool and investment to assist in reaching financial goals as well as take care of your family when you pass.

The new normal of living without the spouse is emotionally, physically, spiritually and financially draining and overwhelming. Just remember to take it one at a time and ASK FOR HELP! Your family loves and needs YOU!

Apr 01
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5 Foolish Money Mistakes to Avoid

By Credit, Money Management, Saving, Shopping No Comments

It’s April Fools Day, full of pranks and jokes all for fun. However, there is nothing fun about being foolish with money.

So, here the top 5 Foolish Money Mistakes to Avoid.

Avoid impulse shopping.

Make shopping a planned activity with a list or a budgeted amount.  Unplanned or impulse shopping will sabotage your spending plan / budget.  If you really want to purchase the item, give yourself 24 to 48 hours to shop for a better deal, figure out if you really want it and can afford it. You’ll be glad you waited.

Avoid retail therapy.

When you are emotionally down or distraught, avoid shopping or making any large purchases.  We are less financially objective when our emotions cloud our judgment.  Do something that doesn’t cost anything or very little, like go for a walk, spend time with family or friends, etc.

Avoid overdraft protection.

Overdraft or “Courtesy Pay” will allow you to you overspend and charge you a fee for letting the debit card transaction go through. A fee of $27 up to $35 will be charged for every overdraft, even if the bill runs just $1 or $5 over the amount you have in your account. Some banks charge the fee if you’re a penny over. Essentially, you’re getting very short-term credit at effective interest rates that reach the high triple digits. Now was that cup of coffee really worth $40?

Avoid savings tampering.

If you have to tap into your savings to make a purchase, you may not be able to afford the purchase.  Establish a savings account that is not easily accessible with a certain amount directly deposited every pay period. Savings accounts are supposed to grow, not be chiseled away.

Avoid financial promiscuity.

Financial Promiscuity is when we use unsecured revolving credit (credit cards) for small purchases when cash should be used.  Avoid using credit to purchase that “value meal” or anything less than $50.  This will ensure that we do not slowly acquire Financial STDs (Substantially Tremendous Debt).

So, enjoy the day and play an innocent joke or prank on someone you love and keep the foolishness away from your money!

Mar 16
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3 Traits to Avoid to Be a Successful Business Owner

By Business, Money Management, Women's Wealth 2 Comments

 

There are so many glorified stories of business ownership that many people have a misinterpretation of the real and respected life of a business owner. Millions of people are making their decision to start their business and become their own BOSS, and many will succeed! Will it be you?

Well, to be a profitable and successful Business Owner, here are 3 traits to AVOID …

Being a Cheapskate

Unfortunately, I believed the “Bootstrap” banter! To bootstrap is to start a business with little capital and I thought that I could get everything I needed for little to no investment. What I learned is that getting the information and services that I needed to be a successful business owner would cost me. If I was not willing to invest my money to get what I needed faster, I would have to invest my time to figure out how to get it slower. Although I learned a great deal along the way, I wasted valuable time, money and potential revenue by being a cheapskate.

I had the misnomer that I would be giving my money away if I hired a coach. This mis-education of money helped me to lose over $50,000 in a year. If I had invested a few hundred dollars in a coach to help me do it right, I would have gotten a return on my investment through building my business the right way with income coming in faster.

TIP: Successful business owners take risks and understand the value of investing in themselves and their business by getting experienced coaches and talent to help them propel their business to stratospheric success. Don’t be afraid to invest in what you need to be successful. You are worth it. [tweet this]

Being a Know-It-All

I was able to run a financial institution; surely I could certainly run my own business. Right? WRONG! It turns out that there is much more to running your own business than there is to running a business that someone else built. Unfortunately, I was a know it all. I did not think that anyone could tell me something that I did not already know. This cost me big. What will it cost you?

It reminds me of when I was a teenager. I dismissed everything my parents said because I knew so much more than them. Of course, when I grew up and became a parent I finally understood what my parents were trying to tell me. And yes, they were right.

Oftentimes new business owners have the same mindset that their idea has never been thought of and that it will work regardless of the experience of other business owners. Take it from me: don’t dismiss the knowledge of an experienced business owners.  It is not always that someone is trying to tear down your dream of being the next Bill Gates. The experienced business owner that you trust just may be sharing some of the requirements and possible obstacles that you may face so that you will be prepared.

TIP: Connect with trusted experienced business owners. Listen to their wisdom as you would a great-great-grandparent. [tweet this] If you think you know it all, you actually may not know what you do not know, and that is the most expensive ignorance there is.

Being a Scaredy Cat

I wanted to be a successful business owner, but I was scared! Scared of what? You name it, and I was scared of it. I was scared to Fail, scared to Succeed, scared of people’s perceptions, scared that no one would like, want or buy my products and services… the list could go on. I was so scared of everything that this fear paralyzed me. Some call it self-sabotage, but sometimes I was paralyzed. The real scary thing about it was that I did not know why I was so scared?

I missed so many opportunities by being scared and allowing that fear to keep me from doing what I wanted to do. For example, I knew I needed to do videos to increase my brand exposure. All of my competitors were utilizing video and they were experiencing major success. However, instead of doing what I knew I needed to do to be more successful, I would say, “I hate doing videos,” or “I have nothing to say for a video.” I was just qualifying my fear and justifying why I should not do what I needed to do for my business.

I learned that fear is not a bad thing or a bad word. Fear is a signal that goes off when we venture outside of our comfort zone. And, guess who controls our comfort zone? We do! As we expand our comfort zone, the fear signal goes off less and less.

TIP: Expand your comfort zone by doing what causes you the most fear with your business. [tweet this] If video scares you, do a video and post it on YouTube, or do a Periscope or Facebook Live. After you do it a few times, you will notice that your fear signal will get quieter. The best way to shut Fear up is to expand your Comfort Zone.

Can you related to any of these or know someone who fits any one or all of those categories? Share you comments below.

CLICK HERE to get your copy of the best selling eBook “10 Traits to Avoid To Be A Successful Business Owner“ via Kindle along with more tips on how to get ready fast!

Mar 15
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3 Ways to Save for College

By College, Money Management, Saving No Comments

By guest contributor Sallie Mae®

As you start to save for college, consider three of the most popular ways to set up a college fund: 529 College Savings Plans, UGMA/UTMAs, and Education Savings Accounts (ESAs).

Each one offers different features and benefits. Other methods include high-yield savings accounts, life insurance, and mutual funds. A financial advisor can help you choose the best one for your needs.

529 College Savings Plan

State-sponsored 529 plans are one of the most popular ways to save for college. You can invest in any state’s 529 plan regardless of your residence, but check with your own state’s plan first. Most offer special tax advantages for residents. 529 plans give you additional benefits such as:

  • The account owner has full control over the account, so you can be sure the money is used for college.
  • Your assets can be used for any qualified higher education expense, including tuition, fees, and certain room and board costs.
  • Earnings grow tax deferred and are free from federal income tax when used for qualified higher education expenses.1
  • Most plans offer gifting programs, which allow friends and family to celebrate milestones by making contributions directly into your account.

UGMA/UTMA

An UGMA/UTMA (which stands for The Uniform Gift to Minors Act/Uniform Transfers to Minors Act) is a custodial account usually set up at a bank. The assets in the account are designated for the child, but do not have to be used solely on education. Benefits include:

1 Earnings on non-qualified withdrawals are subject to federal income tax and may be subject to a 10% federal penalty tax, as well as state and local income taxes. The availability of tax or other benefits may be contingent on meeting other requirements.

Originally posted on March 19, 2015.

Mar 14
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More than 3 Million Scholarship Opportunities for Students through Sallie Mae® Scholarship Search

By College, Money Management, Saving No Comments
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Scholarships and grants are used for 31% of college costs, according to How America Pays for College 2014.  Yet, in the rush of coursework and other activities, students may overlook this valuable source of free money for higher education.

SMSM_MKT10139A_ScholarshipGraphic_280x158A valuable source of money for higher education

Students may believe that scholarships are all geared toward academic excellence or athletic prowess.  While some are, there are millions of opportunities for every kind of talent, background, and experience.  Students should broaden their searches to include place of origin, ethnicity, family professions, and political persuasions.  Another myth of scholarships is that scholarships are only for high school seniors.  Students in all years of their college journey can be eligible for free money.

3 milion scholarship opportunities through Scholarship Search by Sallie Mae® 

Scholarship Search by Sallie Mae®  has a free service that automatically searches through a database of more than 3 million scholarships, worth up to $18 billion, based on a wide range of activities, interests, and affiliations entered by the student.  Email alerts are sent when new matches are posted.  Plus, by registering, students can easily enter a monthly sweepstakes for a chance to win $1,000.

Free college planning resources

While 98 percent of parents believe that college is a worthwhile investment, only 38% have a plan in place to pay for all years.  To help students and parents create planning and saving strategies, there is a suite of free tools, calculators, and resources at SallieMae.com/CollegePlanningToolbox.  Students can estimate their expected monthly loan payments after graduation, analyze award letters, and create a step-by-step financial plan using a combination of scholarships, grants, and loans.

Learn more about Scholarship Search at SallieMae.com/ScholarshipSearch.

 

Originally posted March 9, 2015.