Posts Tagged ‘saving’

Take Control of Your Life with a Personal Strategic Plan

Friday, August 13th, 2010

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Jane M. Young, CFP,EA

At least once a year we need to step back from our daily routine to look at our lives from a broader perspective. We get so bogged down with daily responsibilities we lose track of where we are, and where we want to go. Take the time to do some personal strategic planning. Start by looking at what you are actually spending and saving. How much do you spend in a typical month, how much is necessary spending and how much is discretionary? How do your expenses compare to your income? How do your expenses and your savings line up with your goals?

Maybe you haven’t thought about your long range goals for awhile. I challenge you to make a list of 30–50 goals that you would like to accomplish over the next five years. I know… that’s a lot! Think of this as a brainstorming exercise. Don’t evaluate the importance of a goal, just write down what comes to mind. If you are having difficulty thinking of 30–50 goals, try thinking of goals in the following categories: friends and family, health, career, social and entertainment, money and finance, spiritual, education, and community. Once you have created your list, prioritize your goals by importance and timeframe. Develop an action plan for your high priority goals.

Now go back and review your expenses. Are your spending and saving habits congruent with your long term goals? Use the information you have pulled together to develop a spending and savings plan that supports your personal strategic plan. Once you have a clear picture of where you are and where you want to go, you can take control of your life.

“The future belongs to those who believe in the beauty of their dreams.”
- Eleanor Roosevelt

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Your Money Bus is Coming to Colorado Springs

Wednesday, July 7th, 2010

Your Money Bus is coming to Colorado Springs.

                               Get free professional advice, no strings attached

It’s never too late to secure your financial future.

Re: Free Non-profit Financial Education Event - Please share with friends, family and business associates.

All of us have family; friends and colleagues who are struggling to save money, eliminate debt and find jobs. Please share with them the opportunity to meet for a free one-on-one with local independent financial advisors when the national Your Money Bus Tour rolls into Colorado Springs on July 8th and 9th. Pinnacle Financial Concepts, Inc. is coordinating the Colorado Springs stop of this non-profit tour, visiting more that 25 cities. We will be volunteering at this event along with several other fee-only financial planning firms in town. The Your Money Bus Tour is sponsored by The National Association of Personal Financial Advisors (NAPFA) Consumer Education Foundation, TD AMERITRADE, Kiplinger’s Personal Finance magazine and FiLife.com.

The Your Money Bus Tour will stop in Colorado Springs at the Penrose Library (downtown) on July 8th from 12:00 - 7:00 and at UCCS, Lot 1 on July 9th from 12:00 - 5:00. At each stop, consumers can sit down with locally-based volunteer financial advisors to ask pressing financial questions. All Money Bus visitors will receive a free financial education kit, including a Kiplinger magazine and a budgetary workbook.

Forty percent of American families spend more than they earn and the average American with a credit file has more than $16,000 in debt, not including mortgages. We encourage people to stop byYour Money Bus to learn how to better save, eliminate debt and develop personal financial sustainability habits that will get them through and beyond these tough times.

The NAPFA Consumer Education Foundation is a 501c (3) organization committed to educating Americans on personal finance. Consumers need easy to understand information without any bias, sales, or conflicts of interest. All volunteer financial advisors are fee-only fiduciaries; nothing is being sold or promoted. This is strictly educational and free information for the public. The public is welcome to just stop by or make an appointment ahead of time.

For more information, visit www.YourMoneyBus.com and for up-to-date schedule information contact Krist Allnutt,krista.allnutt@perceptiononline.com.

Warmest Regards,

Jane M. Young, CFP, EA

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What You Should Be Doing Now!

Thursday, August 13th, 2009

Jane M. Young CFP, EA

1. Start by re-evaluating your monthly expenses to determine how much money you need for necessary expenses. Then determine how much you have remaining after you cover these expenses.

2. During difficult economic times, like the present, most people should maintain an emergency fund of at least 6 months of expenses. If you have an exceptionally secure job you may be able to drop it down to 3 months. Always be sure to sure to maintain an adequate emergency fund.

3. Once your emergency fund is established pay off any high interest credit cards.

4. Put aside money for special one time expenses such as a new roof, a new car or a down payment on a house. If you don’t own your own home give some serious consideration to saving up to buy one. Decide how much you want to save on a monthly basis and start a systematic savings plan.

5. Now you can start investing! Determine how much you can afford to invest on a monthly basis. Most people should start by investing in their company retirement plan up to the level that the company will match. If you can afford to invest beyond the level of your company match, invest up to the maximum allowed in a Roth IRA. This should be done on a monthly basis to take advantage of dollar cost averaging - investing the same amount every month. The 2009 contribution limit for a Roth IRA is $5,000 if you are under 50 and $6000 if you are over 50. There is an income limit on your eligibility to contribute to a Roth IRA based on your adjusted gross income. For 2009, your eligibility to contribute begins to phase-out at $166,000, if you are married filing jointly and $105,000 if you are single.

If you still have money to invest after maximizing your Roth IRA, resume contributing to your company retirement plan up to the maximum amount. The maximum contribution limit for a 401k in 2009 is $16,500 if you are under 50 and $22,000 if you are over 50.

Invest your money in a diversified set of mutual funds. Establish an asset allocation consistent with your timeframe and risk tolerance. For most individuals this will vary from 50% to 80% in stock mutual funds, with the balance in fixed income investments. The market is still priced very low and it is a great time to buy stock mutual funds. However, the market will be very volatile over the next 6 – 9 months. Dollar cost averaging into your retirement plans will help you take advantage of this volatility.

This is very general advice and everyone’s situation is unique. Treat this advice as a general guideline and adapt it to your own situation or consult a Certified Financial Planner for guidance.

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Ten Things You Can Do Now To Save Taxes in 2009

Saturday, May 2nd, 2009

Jane M. Young, CFP, EA

Whew!! The 2008 tax season is finally over and we can relax. Well not exactly; this is a great time to prepare for 2009 taxes. A little effort now can help you save in 2009 and will make the process a whole lot smoother. Below are some ideas to help save taxes in 2009.

1. Create a folder for your 2009 tax documents and receipts. Create a file right now, and keep it somewhere convenient, to keep track of all those expenses and donations as they occur.

2. Start going through your old clothes and junk in the garage and donate it to a charity of your choice, if you itemize this can provide a sizable deduction. Remember, keep a log of everything you donate and get a receipt!

3. If you anticipate a substantial change in your 2009 income or if you owed a lot in 2008, now is the time to adjust your withholdings or your estimated payments. There is nothing worse than owing an unexpected $5000 at the end of the year.

4. Maximize your contribution to tax deferred retirement plans. Limits on the 401k, Simple and SEP have all increased this year. If you turned 50 this year you can now make catch-up contributions to your retirement plans including your IRA (assuming you are otherwise qualified).

5. Do you anticipate a decrease in income this year? You may be eligible to contribute to a Roth IRA or for a conversion from a Roth IRA to a traditional IRA. The recent drop in the stock market has made conversion to a Roth IRA very appealing. You can pay income taxes on your account now, while the balance is low. Then during retirement, when the market has recovered, you can take tax free withdrawals. In 2009 your AGI must be less than $100,000 to be eligible for a conversion.

6. Will you be paying college expenses sometime soon? If you live in Colorado you can invest the money you will be spending on college expenses in a 529 plan and deduct the contribution from your state income tax. If you have a couple kids in college this can be significant. Don’t worry; you can invest the money in something very safe within the 529 if you are worried about market volatility.

7. If you are a first time homeowner you may be eligible for a 10% credit up to $8000 if you buy a home by December 1, 2009. This is really more like an interest free loan because it must be paid back over 15 years. Additionally, it is subject to income limits. The credit begins to phase-out for joint filers with modified adjusted gross income of $150,000 or more.

8. Are you thinking about buying a new car? You may be able to deduct the sales and local tax if you buy the car this year. This is subject to an income phase out if your adjusted gross income exceeds $125,000. I know they take all the good stuff away from middle class wage earners.

9. If you own a business or work as a consultant, be sure to keep accurate and complete records. Don’t forget to track your mileage, the current deduction for business mileage is $.55 per mile. This is frequently overlooked or understated due to poor record keeping. Additionally, if you work in your home and have a dedicated work area you may want to claim a home office deduction.

10. Take advantage of the drop in the stock market to do some tax harvesting. Tax harvesting is taking advantage of a market decline to sell some of the dogs in your investment portfolio while taking a capital loss or reduced capital gain. Prior to the market drop, the sale of a particular security may have been prohibitive due to capital gains. Now you can take advantage of the drop in the market to clean up your portfolio or do some re-balancing of your asset allocation.

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10 Ways to Save Money on Food

Tuesday, April 28th, 2009

Jane M. Young, CFP, EA

1. When grocery shopping, select items from the lower shelves, the more expensive items are usually placed at eye level.

2. Stock up when durable goods that you always need go on sale. Don’t buy something you wouldn’t otherwise buy just because it’s on sale.

3. Reduce impulse purchases at the grocery store – go less frequently, make a list and eat before you go. I know, I know, those strawberry shortcake cookies, with the cream filling and chocolate swirls looked so good. But a few days later …… what was I thinking??

4. When comparing prices check the unit price not the total price. You may pay less but you are probably getting less for your money.

5. Eat smaller portions of meat – you might even lose a little weight. Meat is very expensive, use more vegetables and less meat in you recipes.

6. When eating out, eat half of your meal at the restaurant and take the rest home with you. Most restaurants serve very large portions.

7. When eating out limit yourself to one glass of wine or drink tap water instead of coffee, tea or soda. Beverages can be very expensive relative to the cost your food.

8. If you are having an entrée avoid ordering appetizers or desert at the restaurant. Have drinks and appetizers at home before you leave or coffee and desert at home after dinner.

9. Eat something at home before you go out to meet friends. Limit your order to an appetizer or a side salad to be sociable.

10. Rather than celebrating at a restaurant, organize a potluck or take turns hosting a dinner party.

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Painless Money Saving Ideas

Tuesday, April 21st, 2009

I am starting a new on-going feature that will provide money saving ideas.   My goal is to contribute something on saving money about once a month. In the current economy we need all the help we can get. If you have any money saving ideas please send them to me and I’ll include them in the blog. I’ll start with a few ideas that have worked for me.

• Start shopping for clothing at consignment stores. I love good quality clothing but hate to pay the price. For years I’ve been meaning to stop by this cute little boutique on the west side of town and I finally did. Three hours later and two hundred dollars poorer, I walked out with what would have cost me at least $1000 in a regular retail store.

• Save your change. Do you have loose change all over your house and car? I started putting all my loose change in a jar and I had over a hundred dollars saved up in no time!

• Identify and focus on one or two problem areas. We all have areas in our lives where we spend too much. Mine is spending too much eating out. I am trying to focus on this area by keeping groceries in the house, taking breakfast and lunch to work, going to restaurants when they have special deals, sharing a meal and going to a nice restaurant and eating at the bar (same chef ).

• Lengthen the time between personal care appointments such as hair-cuts and manicures. I used to get my hair cut every 4-5 weeks. I found I could go about 6-8 weeks without any problem. Do some of your own personal care and limit that professional manicure or pedicure to once a month or to special occasions.

• Take the time to really shop around for airline tickets. We recently saved $400 per ticket by shopping around and checking numerous different possibilities. Take advantage of opportunities to get airline miles on your credit card. I have two cards that give me airline miles and I make a point to put all of my large purchases on a credit card to get the mileage credit.

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Finding Peace of Mind in Turbulent Times

Tuesday, March 10th, 2009

 Jane M. Young, CFP, EA

 

                                         

1. Don’t lose sight of your investment timeframe.  You’ve heard it time and time again but stock is a long term investment.  So, don’t let the current drop in the stock market cause you to make drastic changes to money you won’t need for 10, 15 or 20 years.   If you don’t need your money for 5 to 10 years stop worrying about it, the market will recover.   If you are in or approaching retirement, you should have put aside the money you will need in the short term.   Use this for your immediate needs.   Down the road in 5 or 10 years when you need to tap into your stock mutual funds they should be back to reasonable levels.   Don’t lose sleep about the level of your investments 10 years from now.

 

2. Every financial crisis feels like the end of the world while we are in it.  If you were to look at the headlines during any one of the past financial downturns you couldn’t differentiate them from today.   Every time we go through a financial crisis whether it’s the savings and loan crisis in the 80’s or the dot.com crisis the message is the same.  This time it’s different, things will never be the same, the sky is falling and so forth.   Everything isn’t rosy, but we will recover from this.  We need to avoid making decisions based on emotion and fear.  The media is in the business to sell papers or increase viewers.  They are going to sensationalize our economic situation.  Good news does not provide high ratings.    Take a deep breath, hug your kids, walk your dog, live your life and stay the course with your portfolio – this too shall pass.

 

3. Don’t pass up a once in a lifetime opportunity to invest in stock at exceptionally low values.  Sure it has been exceptionally painful to watch the stock portion of our portfolios drop by 40% but what a great opportunity we have.   If you have a long time horizon now is a great time to invest in the stock market.  I encourage you to invest a set amount of money into a diversified set of stock mutual funds every month (dollar cost averaging).   Investing in your company 401k or a Roth IRA is a great way to make systematic investments.   Now is the time to invest, not to sit on the sidelines.  It is always darkest before the dawn.  Remember, the stock market is counterintuitive – you feel like selling when you should be buying and you feel like buying when you should be selling.  Therefore, right now we should be buying!!!   When you feel it is safe to buy again it will be too late.

 

4.  Choose your battles and focus on what you can control.  You can’t control the fluctuations in the stock market or where the market is headed.  However, you can better prepare yourself for a weak economy.  Maybe now is the time to cut your personal spending and build up your emergency fund.  Evaluate how to reduce your expenses and pay off debt. Make sure your skills are current and relevant.  Build and strengthen your network now before you really need it.  If you are approaching retirement, and the market has set you back, evaluate alternatives and contingency plans.   Take advantage of opportunities available to you – buy stock mutual funds at low values,  re-finance your home at a low interest rate, convert your traditional IRA to a Roth and sell those especially weak stocks to harvest tax losses.

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