Category Archives: Be Prepared

Intimidating: Opting In

Personal finance is intimidating for many people. While we all love to seek out media which is scary, from movies, books, TV, to live theater and other works of art, those are things we generally opt into. Personal finances are a complicated part of modern life and sometimes we feel as if we don’t have the tools to deal with the situations we find ourselves in.  Can you opt out? Sometimes not. 

I meet people who tell me that their own finances scare them. They find it daunting to sit down and confront their balance sheet, regardless of how many digits are to the left of the decimal point. Professionals bandy about words and phrases like tax burden, cash flow, budget and the scariest phrases of all,

“Where do you spend your money?”

“If you have an unexpected bill of between $400-$2,000, how will you pay for it?”

“Have you begun to save for your retirement?”

and in Seattle, “Do you want to buy a house?”

This can be enough to send you screaming from the scene, while nervously looking over your shoulder, while thinking “I never want to see THAT again!”

I read this article in The Atlantic this week, about how people live paycheck to paycheck, even as they live a middle-class life. The online comments were mean and full of blame. To be sure, there is shared and personal responsibility to be had. No, maybe the author shouldn’t have drained a 401 (k) to pay for a wedding; no, he shouldn’t have missed a writing deadline and had to pay back the advance, but let the person out who has never missed a deadline in her life cast that stone. I don’t qualify.

Financial advisors are here to help and support people to make good decisions about their cash, their future and their piece of mind. We also want to help you move forward from bad decisions you own, or which were forced upon you. I believe my job is to meet you where you are, and help chart the path forward. For you do need a path, a vision, or some goals; otherwise you are just looking at your feet, not where you need to travel.

IMG_1731

This path leads to a well-defended castle. Photo by Dana Twight

Opt out of the intimidation, and opt in to a new path for your finances. Collaboration might reduce the fear factor and even generate some satisfaction.

Zombies and Zinfandel: Handling Your Financial Monsters is tonight!

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Filed under Be Prepared, Financial Wellness, Self Awareness, Shame and Blame

Handling Your Financial Monsters

Join me behind the reinforced walls of Office Nomads for
a glass-in-hand look at financial monsters and how to OUTSMART them.

We all know that tackling our finances can take lots of preparation, and sometimes, a little wine to grease the wheels. So does the Zombie Apocalypse. That’s why I’m hosting a tax-season recovery event to turn you into a Financial Apocalypse Prepper – Zombies and Zinfandel.

Zombies and Zinfandel is Thursday, April 21, 2016

TFE.ZZ.Michael.Adrada.70391(1)

Come at 6:45 to mingle with other Zombie Fighters. Art courtesy of Michael Adrada

Together, we’ll talk about survival through planning (for your tax refund), creating strong safety nets (like managing credit), and the allies you’ll need (just as much as those fences) to preserve your resources.

Although this is a fun excuse to hop on the zombie zeitgeist bandwagon, it also strikes at the heart of my mission at Twight Financial Education – to empower clients to break through money taboos and meet your financial goals on your own terms. This is the third class in my wine series, after Mutual Funds and Merlot and Riesling and Retirement. Please pre-register here through Brown Paper Tickets.

Don’t like zinfandel? No problem – there will be some alternative beverages on hand.

This just in! Office Nomads is now accessible via light rail. The entrance to the Capitol Hill Station is 3-4 blocks from Office Nomads. Additional parking details at the event site.  Reserve your spot in the shelter before it’s too late!

Shoutouts

Thank you to my main collaborators Christopher Mathias, Andrea Carey, along with Casey Middaugh.  Seattle artist Michael Andrada designed the really cool poster you can see here.  Also to Chateau Diana (creator of Zombie Zin), who gave us some giveaways.

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Filed under Be Prepared, Events, Just for Fun

Old Habits and New Resolutions

January 1-31 is traditionally a time of making [and breaking] New Year’s Resolutions. Is it  crowded at your gym? Apps and online tools abound. Books and blogs on decluttering, tidying and organizing can easily be found in your inbox. It is said by some that a habit takes at least 6 weeks to create and people such as Gretchen Rubin and Beth Dargis have multi-day programs on offer. Behavioral economist Dan Ariely created  a short program in this  blog post.     To see the results of his research, visit this link from WYNC.

PowerofHabit.book-cover

by Charles Duhigg

Often the calendar can help create structure for you. Bills get paid after payday; retirement plan contributions occur on paydays, etc. If you can itemize on your taxes, you may have dropped off bags in the last week of December at your local thrift store. In my home town, Macklemore helped us out one year. Parents of college bound students have a date with the revised FAFSA; and by the end of January, you’ll have some thoughts about your 2015 tax return. For a quick set of tax facts and limits from Morningstar, check here.

As mentioned in a previous post, Fidelity and others generate helpful suggestions for our annual resolutions. One study indicates that financial resolutions are easier to keep than those about food or exercise.

So let’s begin with the one geared for success! Financial tasks and affirmative statements. What do you want to improve in 2016?

Where to begin:

Meta Topics: There are meta topics, like what you learned from your family of origin about money, and if money represents the same thing to you and your partner (freedom or security for example).

Or

Nitty-Gritty Topics: There are also the nitty-gritty topics such as how to cut spending on meals out or groceries, am I saving enough for retirement,  and the ever popular  “am I spending too much on fill-in-the-blank ?”(e.g. coffee, furniture, clothing, wedding stuff, organic food, books).

This will be a series on how make the incremental changes which can be permanent, instead of the ‘cold turkey’, ‘all or nothing’ ‘you should do this’ framing which is [mostly] guaranteed to fail. Think of financial wellness, and small successes. Avoid binary thinking, see your progress on a continuum, and remember that like the stock market, it is time, not timing, which makes the difference. Ready, set…

wikimedia-16_1_go-sign

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Filed under Be Prepared, Financial Wellness, Habits, January Financial Tasks, Uncategorized

Tax Planning

The Chinese economy is beyond our control but you can look ahead to your own tax season. Here is a great tax planning sheet from Morningstar to review now or set aside until March (if that is your routine). Remember that you can still send in estimated taxes-even if you missed doing so on January 15th (the day for 4th quarter 2015 estimated payments).

The Bait

Which method  gets you to work on your taxes – a carrot or a stick?

Small Business Links

Small steps to success will be a big theme for this blog in 2016. What can you do right now to be better prepared to do your taxes for 2015?

cropped-new-dollar-bill-by-reuben-ingber.jpg

It’s that time of year again!

Visit the IRS Small Business & Self Employed Division or the Small Business Administration (SBA) for tools to estimate your taxes.

Have you heard of SCORE? It’s a national organization dedicated to help for small business owners, whether you are just thinking about a business or have had one for several years. They have low cost classes, free webinars and centers all across the country. More information on their tax programs is available here.

 

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Filed under Be Prepared, January Financial Tasks

After Mutual Funds & Merlot

German wine humor postcard

German wine humor!

Mutual Funds and Merlot was so much fun last Friday. We drank a great Merlot from Columbia Crest (Grand Estates). Topics included your objectives for your investment funds and how those should match up to your mutual fund choices. We looked over the Vanguard portfolio allocation charts (seen here) from 1926-2014 to learn how asset allocation adds to or decreases average return.
One question asked,”what would it look like if the Depression (1930’s) years were left out”? Those years have the largest declines. Declines were pretty dramatic in 2008, a popular Standard and Poor’s 500 fund from Vanguard (VFINX) was down 37.02 that year. When looking at mutual funds returns now, be sure to check the ten year as well as the five year returns; as the 2008-2009 numbers have dropped out of the five year averages.

We also reviewed fees and terminology (no-load, load etc.) and I shared that when I began in this business (mid 1980’s) the highest front end mutual fund charges were 7.75%!

We did not cover all of the types of mutual funds; only open-ended mutual funds and index funds (a subset of open-ended funds). I also reviewed a decision tree of sorts:

  • Money to Invest (how long)
  • Tax Treatment (Taxable or non-taxable)
  • Diversification (individual issues or pool of securities e.g. mutual fund)
  • Objectives for your funds (growth, income, combination)

My next class will be Riesling and Retirement

(February 3, 2016)

2015-06-06.Winegrapes.blossoms.

German wine grapes in June 2015 by DCT

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Filed under Be Prepared, January Financial Tasks, Just for Fun

#NotBuyingIt: Anti-Black Friday

During this season of Black Friday, and holiday sales, I’d like to offer some thoughts on an alternative-Not Buying It. Ways to change your behavior so that you can take a step back from consumer culture. This topic has interested me for years and authors and bloggers keep coming up with new ways to…buy nothing. Most recently in 2015, outdoor retailer REI decided to close on Black Friday, pay their employees for the day, and encourage all of us to #OptOutside .

Remember Amy Dacyczyn and The Tightwad Gazette from the 1990’s? In 2009, she was interviewed by New Hampshire Public Television. (5 minute video)

2001 After 9-11, President Bush is rumored to have said just go shopping-he really didn’t say it that way; his statement was more highfalutin’-he suggested ‘continued participation and confidence in our economy.’ It was Mayor Giuliani who actually said go to restaurants and go shopping-on Sept 12th. Then the American public was practicing patriotism at the mall, and the ball games….and then the bubble happened…

2006 was when a funny piece in the Atlantic  by the writer and actress Sandra Tsing Loh, was published.  It was called Cheap Thrills: American Women in Financial Jeopardy. It was about women and money, Individual Retirement Accounts  (IRA’s) and shopping. Tsing Loh wrote about her friend Carolyn, who wanted to lose weight and proceeded to lose 12.5 pounds in three months. She also lost a lot from her wallet. Fees and food from Jenny Craig, some nice running shoes-only $100, a new haircut, a gym membership at $40/month etc. And last but not least, the new $300 distressed jeans in two sizes down-only $300.

It cost her $196.50 per pound.

I can distress anyone’s jeans for less than $300, just sayin’.  By the way, by her own admission, Tsing Loh comes from a very cheap immigrant family-her sister once gave her a library book for Christmas with a time limit on it for return.

2006 Judith Levine in her book,  Not Buying It: My Year Without Shopping, links her shopping memories to Sept 11th as well-“Buy that big screen TV or the terrorists will have won!”

Not Buying It Judith Levine

Not Buying It Judith Levine (Photo credit: Gauravonomics)

2008: Remember September 15th 2008 when Senator McCain was feeling Presidential and said “the fundamentals of our economy are basically fine, despite tremendous turmoil…just before Lehman Brothers declared bankruptcy. Recession and many people have struggled with their finances-fair, fowl or fun money. Still are-According to Al Lewis’s Emporium WSJ column, the people wrote in to say two words: We’re broke.

“We want to maintain our financial strength, not transfer it to the mass market retailers.”

— “I already own 50 neckties, three cars, four TVs, etc. Why should I blow money on Chinese junk at Target and Wal-Mart when I can save money for retirement?”

2008-2010 For many of us, the Great Recession changed our buying habits, albeit involuntarily.  However, there have been many enlightening stories written in the last 15 years about people’s voluntary changes in their relationship with consumer culture, stuff and even patriotism. Before that it was Voluntary Simplicity, a movement pioneered by authors Cecile Andrews , Janet Luhrs, and Duane Elgin, among others.

In summary, whether you  reduce your things down to 100 for a year, (2012 link to TedX video from author Dave Bruno) or some other number, go cold turkey like Judith Levine and her husband did for one year, stop spending $200/pound to lose weight or some other self-improvement scheme, try something new this holiday season. Maybe you have gotten very good at substitutions (library for bookstore) (brand declines-Nordstrom to Macy’s to Marshall’s to thrifting)  You can observe Buy Nothing Day on Black Friday – and on Thanksgiving.

You and your family could even introduce these ideas around the Thanksgiving table for some lively conversations. I’d love to hear how that works!

What to talk about, besides football and turkey?

What to talk about, besides football and turkey?

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Filed under Be Prepared, First World Problems, Habits

5 Reasons Your Credit Report Matters

5 Reasons Your Credit Report Matters More Than You Think

Think of your credit report as giant file cabinet and the score as a point in time.

Your credit history here!

Your credit history here!

The report summarizes a lifetime of using credit and your score is a snapshot of your current situation plus your accumulated use of credit experience.

  1. The contents could be inaccurate (did you really live in Minnesota?)
  1. Not all creditors report to all three credit bureaus

What if you have something that is affecting your score, but you don’t know what it is. Pull reports from all three bureaus once a year to see how they are the same and what shows up on only one report.

  1. Is it really your credit report?

Two situations I’ve seen recently:

  • a dad and son with the same first and last names ended up with [unintentionally] shared debt on credit reports
  • a mom and daughter are co-signers – what if one person’s credit goes south?
  1. Inaccuracies/errors and outright falsehoods need to be fixed

Your report has contact information for creditors and the place to make a consumer statement about certain aspects of the report.

  1. Only looking at your scores, (available through Credit Karma, Discover, USAA to name a few) doesn’t help you improve them as fast. Without pulling the reports, you may not know the reasons your score is depressed, or the reasons your score is excellent. 65% of your score is derived from paying on time, every time and your credit utilization ratio (how much of your available credit are you using).

For example, one client I knew had an item from another state on her credit report, so she ignored it, as she had never visited that state. Turned out it was the billing headquarters for an old medical bill incurred in her home state. She needed to contact that creditor to resolve that item.  Another example, you and your spouse agreed to split debt payoffs in your divorce, but one of you has not lived up to that bargain. Make a consumer statement to that effect on your credit report.

Pulling your report is free if you use the legislatively created www.annualcreditreport.com.  For the last month I’ve been able to pull credit reports for service members and their families via http://www.saveandinvest.org. These reports include free scores from all three credit bureaus. FINRA  established this site which also includes calculators and how to check out a financial advisor.

Home

Bonus: New version of FICO  [9] will be treating old medical debt differently http://bit.ly/YH9cMJ

Related Link: Getting and Changing Your Credit Report from Debt Slapped Grad: http://bit.ly/1JfbLtb

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Filed under Be Prepared, Everyday Financial Tasks, Military, New to the Work Force

How Do I Love Thee (Post Valentines Day Edition)

How Do I Love Thee? On Paper, Online and On Time

In life and in death, let me count the ways that I love thee.  Let’s review the beneficiaries, the online accounts, and the papers.

Rosemary is for Remembrance

Rosemary is for Remembrance. Wikimedia

To paraphrase Meghan Trainor, modern philosopher:

It’s all about that signature

It’s all about survivorship

It’s all about that heir, no trouble.

When you love someone, you are told you should have “your affairs in order”.

This is much harder to do than say. What affairs, what is order?

When you have a family, you want to look ahead into a future where you may not be in the picture.

“Yikes, this means I have to pretend I am dead; that makes me uncomfortable and I’ll just hope nothing happens.”

It’s going to happen, trust me. Photo credit: http://www.pdpics.com 4211

This is a common reaction, due to your present, your past or reluctance to look too far into that uncertain future. I have met many people who think that they don’t need to consider these things, because “they don’t have any assets”, “they don’t have any children”, or all they have are the photos on their Facebook and Instagram pages. But you do, you do! You have your organs, your online life and photos, and your entire financial life to care for and secure.

You may have missed the opportunity to send roses or a sentimental card this past weekend, but here are several steps to take in this next week, to say “I love you” to those special people in your life. I’d like to help you move into action!

On paper: Check your retirement plan beneficiaries at work and for your personal retirement accounts. Do the beneficiaries match up with your current sweetie and family? Just sayin’. By the way, for those of you with older pension plans (could be frozen, or discontinued), check those too and keep a copy of the beneficiary page.) You can keep a paper copy, scan or photograph, then store in your cloud somewhere.

Real life story: This just happened to a friend-her husband hadn’t updated his old pension plan documents when he got married. When he passed away suddenly in 2014, his cousins were still his beneficiaries, not his wife. These cousins were sympathetic, but not all relatives would be as thoughtful.

It is important to create, review, or update important documents (will, power of attorney, health care directives) before any major life transitions. This probably also applies to people who take part in extreme sports, marathons, and those races in the mud. If you are in the military, they will place you in a workshop with your significant other to cover many things like this before deployment.

Online: However, online access may still be a problem. In real life, (IRL) your loved ones do not have the access to your emails, online accounts and photos that spammers or identity thieves do. In the Terms and Conditions of our online accounts, there is usually a line or two which explains this privacy policy. Google has tried to fix this with their Inactive Account Manager, and just last week Facebook offered the opportunity to set up a Legacy Contact after your death is proven. Yahoo Japan launched a service to manage your digital profile after you die. https://ending.yahoo.co.jp/ See if you want to set up one of these contacts.

Real life story: http://cnet.co/1Mn3RPO Yahoo denies family access to dead Marine’s email.

 On Time: This has to do with matching your documents and decisions to your actions. Wedding coming up? Do you need to alter your current will and property distribution? Would the laws of your state (and your family) allow your loved one to make medical decisions for you and visit you in the hospital?

Real life story: a relative with a terminal illness lived into the last month of his car loan, so his wife didn’t have to  worry about that last payment. This relative also hadn’t changed two pieces of property to be jointly owned with his [second] wife, so altering those property deeds occupied some stressful hours of his last days.

Love in a box, or a document, or in your will...

Love in a box, or a document, or in your will…

PS For those readers who may have several kinds of pensions (military, Social Security, employer plans), it is important to check the pension payouts with your spouse. For example, will you choose a single life or joint and survivor payout? A single life payout goes for one person’s (the retired employee) life. A joint and survivor payout is calculated over the joint life expectancies of the couple. It is usually less than the single life payout, but it provides a lifetime income for the survivor. See definition of joint life payout from Investopedia here.

If this post inspires you to take action, from creating new documents to reviewing existing ones, you will feel better afterwards. It might feel uncomfortable at first, but the relief generated upon accomplishment will feel wonderful. Plus, your family members will thank you for remembering them.  Get from To-Do to To-Done! (Shout out to https://transmutable.com for my first To-Done experience.)

Related links

http://organdonor.gov/index.html 

http://www.usa.gov/topics/money/personal-finance/wills.shtml

http://www.nlm.nih.gov/medlineplus/advancedirectives.html

http://www.investopedia.com/terms/p/powerofattorney.asp

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Filed under Be Prepared, Everyday Financial Tasks, Life and Death

Do Your Taxes (FAFSA Edition)

This tax post is for FAFSA filers old and new; includes parents of this year’s college seniors and parents of students in college now.

It’s a good day to…”Do Your Taxes”. Or at least generate a decent estimate.

Tax Forms 1040

Who should do an estimate by January 1st?

1. Parents of high school seniors off to college next year
2. Parents of current college students
3. Self employed people
4. Taxpayers with a change in income, plus or minus 20%+ over last year.

This post focuses on FAFSA filers…
Experienced FAFSA (Free Application for Federal Student Aid) filers know the joy of spending a part of the upcoming holiday weekend on personal finance and disclosing your finances to another government agency. I invite you to include your high school senior/college student for part of this exercise so that they understand that they aren’t the only ones who have to fill out forms so that they can go to a post-secondary educational opportunity. Some reasons to do so:

Funding college can feel like this!

Funding college can feel like this!

  1. If the family won’t be eligible for college aid due to the family income or assets, they need to see why.
  2. If the only way they can go to college is due to a lack of resources, they need to understand the forms and their importance.
  3. This is a good time to remind them to seek scholarship applications-many open up January 1st of each year.
  4. Review your in-house rules for having “skin-in-the-game”. For instance, We expect you to earn/contribute $5000/yr towards this cost. Or you need to apply for X number of scholarships.

Note 1: The FAFSA asks for many pieces of financial information and despite the requests for early completion, most people have not even thought about their tax filings on New Year’s Day of any year. For divorced parents, it is good to communicate in advance about the required information.

Note 2: It is always recommended to complete the FAFSA, even if you think your family will not be eligible for any aid. In the coming year, there might be some program that requires the FAFSA, despite no financial aid award now.

Deadlines

Complete the FAFSA as soon as possible-your place in line matters for aid awards. This applies to federal and private sources of funding. A list of deadlines are here.

You can order a PIN to sign the FAFSA now at https://pin.ed.gov/PINWebApp/pinindex.jsp .

Print some tax forms. (for notes and listmaking) Choose an online tax calculator such as http://www.ownersmanualdownload.net/moneychimp-tax-calculator-2014 or http://www.bankrate.com/calculators/tax-planning/1040-form-tax-calculator.aspx. Please note, these are for illustrative purposes only. The idea is to choose one that is easy for you to work with. Please use your favorite search engine to select one for yourself.

 

Get 'er Done!

Get ‘er done!

 

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Filed under Back To School, Be Prepared, Family Lessons About Money

12 Days of Christmas: First 4 Days

My first four days of suggestions for your holiday learning and enjoyment are below.
Our brains love experiences more than stuff, (#1) but some of us (1 in 4) also have a gene which may stimulate the wrong impulses (#2). It feels good to give, so help a friend or family member find missing money (#3). Learning about personal finance, our brains on money and planning ahead isn’t boring; and can be done in less than an hour (#4).
Great program to watch with the family, including the middle schoolers with allowances or the college kids home for the break.

#1 For more anticipation and satisfaction Buy Experiences Not Things. http://theatln.tc/1xJSKtw

Baseball on the road-2013

Phillies Baseball-2013

 

 

 

 

 

#2 Better Living Through Chemicals? Why Buyagra might be impacting your shopping style…http://ti.me/1HCMGqZ

#3 Help someone else with an unexpected gift (or return of their own long lost money)  this season. Seek unclaimed funds in any US state here. I’ve known people who located $75 to $134; and $4,000-$6,000 on one of these sites. Search on behalf of a nomadic relative, old friend, or even yourself. Utility deposits, last paychecks or uncashed dividend checks…http://bit.ly/YDCwkw . Also, this link will take you to a page where you can hunt for uncashed savings bonds (issued after 1974). http://www.treasuryhunt.gov/

All electronic now, but they used to look like this!

All electronic now, but they used to look like this!

 

 

#4 Put this one on the calendar http://youtu.be/Sv0cyyhAc7k This two-minute trailer for the new documentary Thinking Money will air on KCTS (Western Washington) on Sunday, December 28th, at 2pm.

Seattle's Original Victrola Coffee 2012

Seattle’s Original Victrola Coffee 2012 by DCT

Related blog post: https://nodollarleftbehind.wordpress.com/2012/12/03/bright-shiny-objects-2-holiday-traditions-or-shoulds/

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Filed under 12 Days of Christmas, Be Prepared, Family Lessons About Money