Archive for the ‘Goals’ Category

Tax Refund? Invest! (one way or another)

January 13th, 2015

182106567If you’re expecting to get a tax refund this year, you may already have plans for what you want to do with it.  I’m not here to change your mind.  But I do have an idea for your consideration: use your refund as an investment.

Am I telling you to put it away for retirement?  Well, that’s certainly one possibility.  When you invest in financial assets that will produce income or grow in value, that pays off in the long run.  If you are 30 years old, and invest $1,000 of your refund in a retirement account that earns an average of 8% annually, you will have nearly $15,000 at age 65, just from that one deposit.  That’s a nice payoff. But financial assets are only one way to get a payoff from your money.

Let’s think of an investment as anything that over time produces value greater than the original cost – that is, anything that can be compared to planting a seed and seeing it grow.

As I see it, some purchases can be investments.  Buying a new or different car?  Maybe.  If you’re buying a car because you don’t like the color of the old one or you want a better sound system, I would not see that as an investment.  It doesn’t provide any long-term payoff.  But if  you’re buying a  car that is necessary so you can commute to a new job, that’s an investment.  It will pay off because it enables you to earn money at the job.

Likewise, a new computer could be an investment if it is going to be used to further your education, but if you’ll mainly use it to surf the web and pay games, then it may just be an expense… no long-term payoff.

If you’re buying experiences, you can also evaluate the payoff.  Some experiences will provide a greater payoff than others.  Some people plan a family outing each year with part of their tax refund.  Most family outings will have some short-term payoff, providing family bonding time and enjoyment.  But some outings provide greater long-term payoff.  If your children have never seen a live play on stage, then taking them to a community theater production might have greater long-term payoff (expanding their cultural awareness) than going to a movie that’s a lot like the other movies they’ve seen.

Paying debts is a common use of tax refund money.  It provides an immediate payoff, and some larger payoff too if it saves money in interest or means you won’t get evicted.  I suggest, though, that you take debt payoff a step farther and invest in financial security by setting up an emergency savings account that will prevent you from being in debt when tax time rolls around next year.

How will you invest part of your tax refund this year?  ~Barb

Goals, Saving ,

Countering Commercialism

December 16th, 2014

excess - smThere is a lot of commercial excess in the world around us, and it’s especially evident at this time of year.  The messages of “Buy, Buy, Buy” and “I want, I want” are SO dominant at holiday time.  On top of that, we may observe our friends and neighbors and feel tempted to “keep up with the Joneses.”

It is a challenge to be a responsible consumer!  How do we remain firmly committed to our own priorities in the midst of messages of excess?

I don’t have a magic answer, of course, and I won’t pretend I never give in to messages that pull me away from my priorities.  But I can point to some key financial principles that can help us.

  1. It’s all about goals.  If we clearly identify our goals, articulate why they’re important to us, and post them where we’ll see them, then we are better able to say “no” to distracting options.
  2. Limits are helpful.  Life is rarely “all or nothing.” Most of us want to spend some money beyond our minimum needs; we just don’t want to spend too much.  To be in control of our money, we can make a plan that includes limits for each type of spending.  Then choose a method for sticking to that limit.  One method is to use cash.  Give yourself so much cash for the week or for the spending category, and when it’s gone, it’s gone.
  3. We always have a choice.  Even though there is excess around us, it only enters our lives when we choose to let it in. When we see an option that wasn’t in our plan, the best thing we can do is to stop and decide: if I spend money here, then what part of my planned spending will I give up in exchange?  We may want to blame the store displays or our friends, but our decisions are ours alone.

How will you focus on your priorities during the holiday season and beyond?


Goals, Smart shopping

What’s Your Number to Start Saving for Retirement?

September 2nd, 2014

6870886851_76c9703cca_z retirement savings

So you just got your first job and you think retirement is a long time from now.  But saving money towards retirement today means you will put in less than if you wait to start your retirement fund.  What?

The chart and explanation below explain how this works.

Annual Savings Rate
Required by middle-income family replacing 70% of pre-retirement income

At age:  
                   % of income to save if starting at age:

                                 age 25                age 35                   age 45

62                              15%                      24%                           44%

65                              10%                      15%                           27%

67                                7%                       12%                           20%

70                                4%                       6%                             10%

                                                                      Source: Boston College Center for Retirement Research

A recent study from Boston College Center for Retirement Research found that 50% of working families won’t have a big enough nest egg to maintain their standard of living in retirement. Two reasons behind the lack of nest egg are low saving rates and lower stock market returns.

Consider a middle income person who wants to retire at age 65.  As the chart shows, he needs to save 15% of his preretirement income annually, starting at age 35. Note: that pace of savings assumes that the retirement account earns 4% a year more than inflation.

There are huge benefits by starting the saving and investing earlier as well as big benefit in delaying retirement:

  • If that middle income person starts at age 25 instead of 10 years later, he can reach his nest egg target size by saving just 10% a year.
  • But someone who does not start until age 45 must sock away a daunting 27% of income to retire at 65 or 20% to stop at age 67.

The data view someone who is 54 to 56 years old to be middle income if he earns $45,500 to $97,500. At ages 30 to 32, that range is $36,500 to $68,500.

By delaying retirement, you give yourself longer to contribute and can put in a smaller amount.  To illustrate, let’s return to that middle income person who starts saving at age 35 and needs to save 15% annually if he retires at age 65.  Delaying retirement will help.  If he wait until 67 to retire, he will need to save 12% a year, according to the Boston College study. If he keeps working until age 70, a 6% yearly savings rate will get the job done.

Iowa State University Extension and Outreach has updated Retirement publications. Retirement: Secure Your Future materials are available at

Happy Saving – Susan

Goals, Retirement, Saving

Use Your Time Wisely

August 7th, 2014

We all have to wait for things – like repairs to your car, waiting to see a doctor, standing in line at the post office, or checkout line at the grocery store.  The last two items usually happen faster than the car repair or waiting for a doctor.  While waiting, do you grumble? read the array of magazines? or do you use your time effectively?

Recently I was waiting for a friend and I had brought a book that I was reading for church and a guidebook for an upcoming trip. Last week,  I waswifi_waiting waiting for my car tune-up; I knew that the waiting area had Wi-Fi so this time I brought my laptop to work on some news releases and answer other communication.  Another person had a book that she was reading.  Another person was using their Smart phone to respond to text messages.  They, like me, had planned ahead for the waiting time.

You might not like to stop and take the time to plan for the times you have to wait – but these situations do happen.  Be prepared.  Use your time wisely and get something accomplished.


Consumer Knowledge, Goals

Community Theater and other Money-Savers

July 15th, 2014

theater-masksI’m involved in local Community Theater.  I’m no actor, but each year I help with music (in the orchestra pit) for the summer musical, and I help with box office and ushering for other shows during the year.  Last weekend was opening weekend for “Guys and Dolls!”  It’s always fun.

When I moved to this small-ish town I was astonished by the quality and quantity of work done by the community theater.  I’d never experienced that before, and was amazed at what could be done by an all-volunteer organization.  In the years since, I’ve discovered that many communities in my area and around the state have active community theaters, as well as community choruses, bands and other arts groups.

This is great news for people concerned with saving money.  For two reasons:

  1. Attending plays and concerts is low-cost local entertainment (sometimes free - I went to a terrific free concert a couple weeks ago)
  2. Being involved in these activities is also free recreation – a fun social activity at absolutely no cost. Participation is the best of both worlds – spending time with other great people while at the same time contributing to your community!

If you’re thinking this doesn’t apply to you because you’re not an actor, artist or musician, think again.  I can tell you that all kinds of skills are valued.  Some people make the printed programs and distribute posters. Others build or paint sets. Some people help keep the place clean and make sure important props are where they need to be.

In my experience, anyone who wants to be involved is welcome to help out.  If you’re looking for free social activities, getting involved in a community group, whether theater or music or some other group, is a great place to start!


Goals, Smart shopping, Spending plans ,

Visit Your Local Library and Explore Money Concepts For You and Your Child

June 12th, 2014

Now that school is out, take a trip to the local library — use a free local resource to find some children’s books that start the conversation on money for your children.  As an adult, you can pick up some money books too.

Need a few suggestions?

For your preschooler here are few books to try:

  • Curious George At The Laundromat – by Margret ReyimagesW3UIRY2R read to child
  • Just Shopping With Mom –by Mercer Mayer
  • Mrs. Pirate by Nick Sharratt
  • My First Job by Julia Allen
  • Paddy’s Pay Day by Alexandra Day
  • The Berenstain Bears & Mama’s New Job by Stan and Jan Berenstain
  • The Berenstain Bears Get the Gimmes by Jan and Stan Berenstain
  • The Berenstain Bears’ Trouble with Money by Jan and Stan Berenstain

For the beginning reader here are a few books:

  • A Bargain For Frances by Russell Hoban
  • A Job For Jenny Archer by Ellen Conford
  • Alexander, Who Used To Be Rich Last Sunday by Judith Viorst
  • Ben Goes Into Business by Marilyn Hirsch
  • Leo and Emily’s Zoo by Franz Brandenberg
  • Not So Fast Songololo by Niki Daly
  • Something Good by Robert Munsch
  • The Giving Tree by Shel Silverstein

For additional books, the University of Nevada Cooperative Extension’s “Money on the Bookshelf” has four pages of books by age level.  In addition to a list of children’s books about money, the site also offers tips for teaching about money.   The site is:



Consumer Knowledge, Goals, Saving, Spending plans, Uncategorized

Wedding Gifts

June 6th, 2014

giftIt’s wedding season again!  This year, I don’t personally have any wedding invitations in store for this summer (that I know of), but it’s on my mind due to an article I saw today which mentioned weddings as teachable moments for financial skills.

Not surprising. We certainly encourage couples and families to use financial skills in planning weddings.  Making a financial plan and staying within limits are invaluable when planning a high-cost event.  Wedding guests can also benefit from financial planning.

But this article went down a path I had never explored:  ways wedding gifts can help couples build strong financial habits!  The author explained that she has adopted the practice of giving a good quality shredder as a wedding gift, sometimes accompanied by some cash and a book of financial tools and worksheets.  A shredder is a brilliant wedding gift, really.  She said it has been very much appreciated by many of the couples who have received it.

So I tried to think of other gifts that would be appreciated or enjoyed by couples and could also encourage good financial habits.  It was tough, actually.  I didn’t come up with many.  But here are a few:

  • Shredder (as mentioned above)
  • File cabinet
  • File container for emergency files (the files you would want to take with you if you needed to evacuate in a hurry).
  • Financial management software
  • Financial books or subscriptions
  • How-To books – how to fix things, how to garden  (which would save them money)
  • Cook books (cooking/eating at home usually saves money and promotes health)

None of these gifts is romantic.  Some of them, however, are actually items that couples might register for – the article mentioned that the author sometimes sees shredders on bridal registries!  Not everyone chooses a “practical” direction for their wedding gifts.  But most couples do appreciate practical gifts, so the items listed may be worth considering.

Can you think of other money-conscious gift ideas?

~ Barb

p.s. the article that prompted this came from Susan Sharkey of the National Endowment for Financial Education.  Their “Smart About Money” website is a fine source of financial information!


Consumer Knowledge, Goals, Smart shopping ,

Spring: Gratitude

April 29th, 2014

goldfinchYesterday I heard an unfamiliar bird song… beautiful.  I don’t really know anything about bird songs, but I’ve sure been enjoying the spring music.  I’ve also been enjoying the tiny spring flowers that have bloomed in my yard, and the lace-like appearance of trees just starting to bud.  I have one hyacinth blooming, with more to come, and it won’t be long till I have daffodils in bloom, too.

I think it’s important that we stop to appreciate the wonderful gifts around us. I find that when I am consciously grateful, I feel less need to acquire more things — I’m more satisfied with what I have.

In the spring, as nature brings  an abundance of beauty and new life, it’s easy to pause and appreciate our surroundings.  But we can take delight from other sources as well – something doesn’t need to be new or even beautiful to prompt a sense of gratitude:  a receptionist who smiles at you, an interesting picture on the wall in an office, a comfortable old chair to relax and read in…

Gratitude doesn’t make our financial concerns disappear, but it puts them in perspective. And that perspective helps us better sort out our priorities and distinguish wants from needs.  Long-term, that means greater satisfaction, less stress, and stronger finances.  Happy Spring!  ~Barb


Do Adults Need An Allowance?

April 10th, 2014

imagesVD4IXD5M allowance

Parents use an allowance as a tool to teach their children about money and responsibility.  Do the adults need one too?

An allowance is a pre-set small sum of money a child receives regularly to spend on toys, clothes, books, games, or whatever.  The parent sets up payments, weekly, bi-weekly or monthly depending on the age of the child.

The concepts of saving and planning for purchases are valuable life skills to be learned by children and also needed by adults.  A survey found that over 40% of American families spend more than they earn and nearly 50% have less than $ 10,000 in retirement savings. Your six year old may be better at saving money than you are.

To balance your spending plan is to do one of two things – spend less or make more.

Unfortunately, when people make more money, they sometimes spend more to maintain or increase their standard of living.  They increase their debts rather than using the extra income to increase their savings/investments. This is not a recipe for financial well-being.

An allowance can be a tool to help you limit your discretionary spending.  Give yourself an allowance (weekly, monthly or per pay period) and keep your spending within that allowance.  You’ll find that it helps you reach your savings goals and build financial security.  Children need limits so they can learn to make choices among a variety of spending options; we adults can also benefit from that same type of limit.


Goals, Saving, Spending plans

When can you buy health insurance outside the open enrollment time?

March 13th, 2014

 pregnant parentsMany people know that under the Affordable Care Act, insurance companies cannot refuse to cover you. This is true, but what many people don’t realize is that this rule only applies during open enrollment. Generally insurance companies are not required to accept applications for coverage outside of open enrollment. People can’t just wait around to get sick, before making the decision to purchase insurance.

If you don’t purchase insurance during open enrollment, you may still be able to purchase insurance before next year’s open enrollment but only if you have a life event that qualifies you for what is called a “special enrollment period”.  Some of those events include:

  • Getting married
  • Having, adopting or placement of a child
  • Permanently moving to a new area that offers different health plan options
  • Losing other health coverage – due to job loss, divorce, loss of eligibility for Medicaid or CHIP, expiration of COBRA coverage, or a health plan)
    • Exceptions – Voluntarily quitting other health coverage or being terminated for not paying your premiums is not loss of coverage.
  • People enrolled in the Marketplace coverage, having a change in income or household status that affects eligibility for tax credits or cost-sharing reductions.

I have two friends who are planning to take advantage of a special enrollment period. They are pregnant and due in June, after open enrollment ends. Because this is a change in their situation, they can add health insurance after the March 31 deadline.  They can enroll in or change their health insurance plan outside the open enrollment period. The special enrollment period is 60 days from the date of the qualifying life event.

Open enrollment for Marketplace coverage ends March 31, 2014. The next proposed open enrollment period is November 15, 2014 – February 15, 2015.


Consumer Knowledge, Goals, Insurance, Smart shopping