Category Archives: Family Lessons About Money

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!

 

Advertisements

Leave a comment

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

Your True Balance Sheet

Most times I work with a client, we make a balance sheet to show their net worth. This shows what you own, what you owe and shows the difference between them. Some years in life (with mortgages, business, car or education loans) it may be negative; other years it will be positive (with a good trend line).


But these numbers do not not capture your life’s true balance sheet.

  • Some elements of that here:
    Your dreams-what dreams of yours have come true? What dreams so you still have?’
  • Your relationships-family and friends, your business community, receiving a smile from a random person as you walk down the street, seeing a beautiful image, created or from nature; other moments of artistic bliss.
  • Your education and that of others-not your formal education, but the education from being a lifelong learner and seeing lessons shared with loved ones bear fruit in their lives. Being able to continue to grow.
  • Your capacity for love, empathy and compassion for others.

Those cannot be measured by mere numbers, but in the delight, joy and compassion you receive [or give] in your life.

All the best to you and your families, with best wishes for a joyous, abundant year to come.

Seattle's  Victrola Coffee 2012. Photo Credit Dana Twight

Seattle’s Victrola Coffee 2012. Photo Credit Dana Twight

 

Related Link: Share your values with your children; either in late night/early morning chats, stealthy emails or by writing an ethical will. Ethical wills have been used for 3,500 years. http://nyti.ms/1JS0tLv

1 Comment

Filed under 12 Days of Christmas, Family Lessons About Money, Self Awareness

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/

Leave a comment

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

Is a Layoff in Your Future? 5 Steps to Take With Your Family

Gather the family around the campfire and prepare for the conversation of your life. Now is the time to let go of any family taboos around discussing money.  This is especially true if you have children living at home. You can adjust your talking points, depending on the ages of your children, but you need to be united on this.

I’ve been answering questions over at www.nerdwallet.com for the last three weeks. This post is from an article by me published in their Advisor Voices section last Friday.

Before we get to the 5 things, two suggestions for framing:

  • Be truthful-mom or dad is going to lose her/his job and we have to prepare for that soon.
  • Be reassuring – mom or dad will be getting a new job after that, and we need your help now to get there.

You could also set up the discussion and introduce some crucial concepts like this:

“In our family, we have needs and we have wants. Our needs include food for everyone (we won’t forget our pets!), a roof over our heads (explain the difference between rent and a mortgage to older kids, be more abstract with younger ones), paying for the heat, lights, phone service, child or after school care that allows parents to go to work outside the home, and transportation to get family members where they need to go. We will keep our health insurance so everyone can stay well and get their teeth cleaned.”

Wants will be different from family to family and be ready to give examples at the campfire. High-speed Internet may be a legitimate need for business purposes, but several ESPN channels are going to be in the want column, unless you’re a sportswriter. Adults and kids can make changes in different ways.

A New family activity-making the dollar go further

New family activity-making the dollar go further together.

As Benjamin Franklin might have said, the following three activities revolve around being healthy, wealthy and wise.  I’m adding two more intangibles: go actively towards the next destination, instead of away from what you’re doing now, and be sure to use your own roadmap.

 

Health: Know what you’re up against!  Is health insurance part of your severance agreement? Do you have severance? Tip: If your last day of work is early in the month, your group coverage usually extends through that month.  So a last day at work of May 1st is better than April 30. Post-layoff choices could include COBRA, a group plan through your professional organization or union, a family policy from your state’s exchange (using the Affordable Care Act) or going without coverage. Going without health coverage could derail your family finances in a hurry if an emergency comes up. If a large layoff is rumored or several months out, immediately catch up on any work-related reimbursements for transportation, child care, parking or flexible spending accounts (FSA).

Tip: Make those routine appointments ASAP.

Wealth: Do you have at least nine months of income or expenses set aside? A year or even 15 months of expenses would be better, or a working spouse who can supply the income and benefits to cover you or your family as you move forward. List all loans, debts and upcoming fees and rank by amount and interest rates. Two schools of thought on retirement deferrals: Keep making the smallest contribution to get the company match—the thought being that it might be awhile before you can resume contributions; or cancel your salary deferral to boost your emergency fund or pay off debt. Paying off debt will need some serious family discussion. What makes you feel more secure—a larger rainy day fund or less debt?  Can you stop adding to any debts, and cut credit card use while you prepare? If so, move forward with that.

Tip: Automate all minimum payments so that your credit history is not harmed.

Wisdom: How well prepared are you to meet the intellectual and emotional challenges of being laid off and seeking new employment? Who will be on your kitchen cabinet, helping to advise you as you move forward? What about that LinkedIn profile? What about certifications, or continuing education? Can you use a tuition reimbursement benefit? Who will be part of your new work community? (Check out local co-working spaces for some ideas).

Tip: Create a family gratitude list, so you can keep in mind the non-material riches you already have.

Embracing the Hunt What are your strengths? Create a list of what your preferences are in a career, (often harder than the deal breakers) to leverage those in the next position. Do you have a side job that is begging to sit at the grown-ups table? A friend of mine is tired of teaching, but she is a talented quilt designer.  Perhaps that is her next career.

Tip: A good career counselor can save you lots of time.

Roadmap Draw your own! I cannot stress this enough. A map made for someone else is seductive.  But your brother-in-law’s map may not work for you.

As George Harrison sang, “If you don’t know where you are going, any road will get you there.”

Your next job has to come from what is best for you, so that when you are stuck at the side of the road, whether in Tacoma, Toronto, or Timbuktu, you have created a map to the best destination for you and your family.

Related Links

Boeing Managers say transfer of engineering jobs damaging talent and morale

 

Leave a comment

Filed under Be Prepared, Debts, Family Lessons About Money

Pass the Turkey and the Financial Planning Please

Mom, please pass the sweet potatoes; pass the turkey; pass the financial planning?

You survived Election Day, Halloween and curriculum night at school. Next up are Thanksgiving, Hanukkah (they won’t overlap for another 80,000 years!) and St. Lucia Day, St. Nicholas Day, Christmas, school pageants and winter school holidays. The Chinese New Year begins at the end of January, on the 31st. Will you be seeing a lot of family in the next 8-10 weeks? I reckon so.

The 1996 Hanukkah USA 32 cents stamp

Sometimes you will see family members once a year; others you see more regularly and its your siblings that ‘pop in’ for a Turkey/Game Hen/ Tofu/Field Roast dinner. Lots can change with your parents or other family elders in a year, even six months.

2006 Christmas stamp, Ukraine, showing St. Nic...

2006 Christmas stamp, Ukraine, showing St. Nicholas and children. (Photo credit: Wikipedia)

Some things to consider:

  1. 1.If your relatives are asking for some help, or ruminating about how they are having trouble “keeping up with the paperwork” this year, pay attention.
  2. Listen carefully to any stories about telephone fundraising for groups you have never heard of. Be patient so you can get the entire story.
  3. Urge relatives to never give quickly to groups they are not familiar with, or who have called them first, or groups that sound like established non-profits (but aren’t).
  4. You can help check groups out here at give.org or at Charity Navigator  or another charity evaluator organization.

My state’s Department of Financial Institutions has an informative PDF called Fighting Fraud 101 that you may wish to read or share this year.

Another turkey dinner topic is a family member’s health, or deaths of other loved ones. This can also be a good opportunity for you to ask some hard questions of your elders. (It is often hard for both parties, but you are doing it because you wish to respect their values as much as possible).

  1. Where is your will located?
  2. Who is your doctor and do you have a current Health Care Directive (they are different for each state-here is the WA one)  or POLST on file?
  3. Do you have a Long Term Care insurance policy and what company is it with?
  4. What are your thoughts on “heroic measures”, “a ventilation tube”, quality of life and palliative care?

While the old saying is sharing is caring, so is listening and observing.

Please take the time to add a financial planning course to your holiday meals and visits this year.

Your mom and dad may thank you and it is time well spent.

1 Comment

Filed under Be Prepared, Family Lessons About Money, Learning About Finance

Mending Your #Safety Net

Edwin Harris - Mending The Nets

Edwin Harris – Mending The Nets (Photo credit: Wikipedia)At the end of the season, it’s a good time to mend your nets.

When we reach the financial adult stage (your chronological age may vary); you may wish to mend or create a safety net.

Safety nets are different from person to person; so feel free to select the pieces that match your own situation.

Security Risk management: often solved with insurance products. Car, renter’s, condo, house, flood, fire and theft, cell phone, jewelry, business continuation etc. Can you afford being without [insert category here]?

Savings (also known as cash these days due to barely visible interest). One person’s emergency fund is $500, another’s is $10,000 and I have met someone whose security needs are met by one year’s income in the bank ($65,000). I like to suggest thinking of this fund in terms of months of income or expenses (whichever is greater). There’s a joke in there, sort of.

Residence  Home is where the heart is (and the bills) and your fridge. (see my earlier post called Clean One Refrigerator Shelf at a Time here)

Friends and Family Shoulders to cry on or celebrate with. Who can help you stay accountable to yourself? Who will understand and support your goals? Which of your friends or other loved ones can give you an assist with tangible or intangible help? Do you need to move into someone’s spare bedroom for three months while you save up for XYZ goal? (Tip: set a deadline for being in-residence-the relationship is something you don’t want to lose).

The Future What does your future hold? What’s on your bucket list?

Tools
Education, knowledge or wisdom (not to be confused with advertising, too many data points, endless supply of new products, Squirrel!),
Wisdom comes from mistakes, mistakes come from experience.  Or,

There is only one thing more painful than learning from experience, and that is not learning from experience.  ~Laurence J. Peter

Emotional IQ  Know yourself. Are you a DIY (do it yourself) person? How resilient are you? Can you reframe an experience and move forward?

How do you like to learn new information? Are you a lifelong learner?

I have always enjoyed the opportunities I have had in my career to ask other people about their questions, or to consider what the important questions are for me when making a decision. Getting help with the right questions can be better than only searching for the answers.

Before You Quit Your Job-Five Factors to Consider

1 Comment

Filed under Be Prepared, Family Lessons About Money

Uncomfortable Conversations: Zero Left in the Food Budget

It’s the end of the month and here is what could be an uncomfortable conversation with your family: Zero money in the food budget-what to do next?

Here’s what happens: creativity, improvisation and community. This post focuses on what happens if you run out of money in the food budget and creative ways to make do. Please add your ideas to the stew in the comments.

The Stew

Did your family do any of these things?

  • Buy groceries on a credit card
  • Scrounge around in the freezer, fridge and cupboards to see if you can make a casserole with what is on hand-even if it is with something unfamiliar
  • Make “stone” soup
  • Throw a potluck with your neighbors
  • Get invited over to someone else’s house
  • Eat instant noodles or peanut butter sandwiches until payday
  • Create one meatless dinner night (or more?)
  • Have “breakfast for dinner”
  • Search for all of your restaurant coupons, eat out, then box up half of dinner for lunch the next day?
  • Skip meals
  • Skip the coffee shop  and buy Folgers instead (number one coffee brand in America)
  • Cruise the local big box grocery at free sample time
  • Join the local grocery online club to get preferred pricing or free items
  • Use a federal or state government program such as SNAP
  • Transfer funds from another account to cover food until payday

Do you have any childhood memories like these? Did your family  make it more of a game? If there was scarcity of some kind, how was it handled by your family?

Please leave your stories in the Comments.

English: A brick of Instant noodles as they ar...

English: A brick of Instant noodles as they are commonly available in Europe. Deutsch: Ein Block Fertignudeln (Photo credit: Wikipedi

Leave a comment

Filed under Everyday Financial Tasks, Family Lessons About Money, Learning About Finance

What Your Mother Said…about Money

I don’t always quote other people’s mothers, but when I do, it’s usually about money.

My last work conversation on a recent day ended like this. Me to former colleague: Are you in the 401(k) plan in your new job?

Him: “I know, I know, I should be, my mother keeps reminding me!”

Me: “Well?”

What else did your mama say to you? She may not have said “a penny saved is a penny earned”, a la Ben Franklin, but I bet she had a few words to say about money over the years.

Taken in Philadelphia, Pennsylvania, in April ...

Taken in Philadelphia, Pennsylvania, in April 2006. Sculpture of Benjamin Franklin at the University of Pennsylvania. (Photo credit: Wikipedia)

Whether Mom gave you advice or not on your retirement savings, she probably would agree that you should not overlook free money. And many people do. If your boss offered you a 3% raise-in addition to anything else, you wouldn’t turn it down, would you?

Here’s the benefit my colleague is currently passing up:

100% match of 401(k) contributions of up to 3% of your gross income

Now this company has some other wonderful benefits, but let’s focus on the extra 3% of compensation that I allude to above.  This is the same number as the predicted average raise in the US for 2013.

Some numbers:

  • 3% of $75,000  = $2250 each year
  • 3% of $50,000  = $1500
  • 3% of $40,000  = $1200

This will become your money quickly. Usually you are fully vested in employer matching contributions in three years. Plans do vary, so ask your 401k administrator:
When do the matching contributions vest (or when will I own these contributions?) 

Money - Black and White Money

Money – Black and White Money (Photo credit: @Doug88888)

Leave a comment

Filed under Corporate Retirement Plans, Everyday Financial Tasks, Family Lessons About Money

Rock, Paper, Scissors (and your finances)

When you handle your finances, are you playing, Rock, Paper, Scissors?

Rock-paper-scissors chart

Rock-paper-scissors chart (Photo credit: Wikipedia)

Let’s recall the game!  “Rock” beats scissors, the “scissors” beat paper and the “paper” beats rock.

Rock: When your money comes in, do you beat it into submission? Do you beat yourself up with guilt or shame? This could include shopping to make yourself feel better, attacking the bills with a vengeance, making a list of needs, wants and savings. In the game rock always wins, but please read on… Continue reading

Leave a comment

Filed under Family Lessons About Money, Just for Fun

Bright Shiny Objects #2 Holiday Traditions or Shoulds?

What are your favorite holiday traditions? Do you go berserk each year trying to decorate or do you gather the family and enjoy a leisurely afternoon installing the decorations of the season? Wherever you land on this continuum, it might be time to check on the “we always do it this way” types of activities. Shoulds are not allowed in Santa’s pack!

Box of glass Christmas ornaments

Box of glass Christmas ornaments (Photo credit: Wikipedia)

From a financial perspective, these traditions are expensive, especially if it turns out nobody is that interested.  One way to tell if a change is needed is if you are the only one getting it all done. When measuring the cost, don’t forget to consider time, talent and treasure (money).

Travel: Do you travel for the holidays? Have you tried some alternative techniques, from taking the train instead of driving to offering to book a nice B and B (or Airbnb) for the visiting family members?

The Tree(s):  How many? Fake or real? Lie down for a nice nap and decorate the rosemary bush instead? Holidaze….

English: Shiny haws in Bulley Lane That remind...

English: Shiny haws in Bulley Lane That reminds me – must start the Christmas shopping. (Photo credit: Wikipedia)

Entertaining: Whether you prefer a bountiful dinner party, an  ‘Open House’ or gathering the clan together after a school concert, make a plan and set a budget in advance.

Gifts: many families organize gift giving around experiences, or gifting locally. Some make things at the do-it-yourself ceramic place, cook together, or offer to take someone else’s  kids out for an afternoon of shopping or the movies. Looking for gifts made just down the street ensures more of the funds stay in your community. Another strategy is to give everyone the same thing, from tickets to the local playhouse to down slippers or cloth napkins you made yourself.

Think about why you do certain things in December, and if they still bring you joy.

Will they bring family and friends together?

Could you have a low-key gathering on Boxing Day instead (12-26)?

Attend the live reading/playing of Handel’s  Messiah at church?

Can it involve recycling such as a ‘white elephant’ exchange or Bill Cosby sweaters?

Donate or do something for others in your community-or make time to do something special for a family, non-profit or school AFTER the New Year has begun.

Whatever your decision, and especially if you have a new household, be intentional about your traditions this year. You will enjoy them more and maybe even save a little ‘green’.

Gift Box

Gift Box (Photo credit: Maeflower72)

1 Comment

Filed under Be Prepared, Family Lessons About Money, History