Learn Something New Every Day....Welcome 2018!!!

“Learn something new every day.” That was heard around our dinner table by anyone who cared to join us for dinner. Some families talked politics, some sports, or world problems. My Dad was a big believer in learning something new every day. Over dinner, he was sure to ask us what we learned. This was not just book learning or school. He was looking for life learning.   As a graduate of the school of Hard Knocks, he realized life skills for what they were: Invaluable. 

Learning something new often means experimenting and being willing to put yourself out there in a different way. Trying something new does not come easily to any of us. Sure, some of us more than others. But all of us had the knack for trying and failing and trying and succeeding as children. I heard last week that as children we are more willing to try things until about age five, at which time we attend school and are taught about the right way to draw a tree or the true colors of the tree. Before we met a rating system, we learned to walk by trying and failing. And trying and failing. Receiving encouragement, trying again. And then, maybe a step or two before we dropped. Only to get up and try again. No judgment, no ratings. We walked eventually.

As I enter the year, I am going back to learning something new every day, but this time not in answer to my Dad’s questions. He has been gone nine years and I sorely miss his wisdom. I'm not going back to this practice because “conventional” spiritual growth says trying the new is good for personal growth. I am going to learn something new every day because--here it is--It Feels Good! I want to feel good, even when I fail and need to try again.

What inspired this blog post and new attitude?  Simple. A freezing cold weekend in Vermont with low motivation for outside activity. I unwrapped an oil paint kit tucked away in the house.  I have never used oil paints before in my life. I have painted once in my life. And I could not even tell you how long I have had the kit. This is not about my memory failing me but since I had to dust the kit off, I only know it has been years.

I sat on Saturday, December 30th, and thought about what to paint. The thing on my mind was 2018. I sketched lightly as suggested by the guidebook accompanying my paints – I did not know that most visual artists sketch first. Then, I started painting. Fun colors. Designs that appealed to me. I mixed some paints together and made new colors. “This was fun," I thought with a smile on my face.

As I moved on, covering more and more of the surface, I wanted to do another layer of paint and merge some colors on the small canvas. Every time I tried, something blurry and unlike what I wanted appeared. So I stopped. I did not YouTube my question, I did not Google it. I went back to that guidebook – yes, someone is still reading books. The thin paperback book explained I would have to wait to do my next step until the paint was dry to the touch. I figured an hour or two. However, further research revealed that I was going to have to wait 16-24 hours for the oil paint to dry. Hmm! I wanted to be finished. 

Instead, I had to clean up. I knew how to clean brushes but admit to texting a friend on how to clean the artist’s palette. My artwork finished for the day, I had time for reflection. Writing is my typical creative endeavor. Breaking out something new felt freeing and fun. What I did not anticipate is that on December 31st, I still would not be finished with my painting project. After a bit of time with the paints, I realized I needed to add the lightness of yellow to my piece. But again, I had to let the current piece dry. Perhaps I am more patient than I thought. Or, I am learning patience in a creative way.

After the final touches on January 1st, I realized something about myself and my own creative work. I always want to power through my writing and get to the finished product. Something worthy of the reader's attention. So I write, I edit, I review and have someone else read a piece through before I commit to the completed piece. What if instead, I let the “paint dry” on my writing? I did not have to commit to hours and hours each day. Rather, I could work when something comes together in my writing and then let the writing sit for a day or two--knowing I will come back to it with fresh eyes and be ready to put the finishing touches on it. 

Yes, I am on to something. I tried something new. A real creative reach for me. And in the process, I learned a new way to approach my first love of writing. The finished art project? You be the judge…

Charitable Giving: Teach Your Children Well

Children can understand charitable giving and helping others.  No age is too young to start.

With your kids of all ages, get them involved.  Create a change jar for giving to charity.  Each month or so decide as a family where to donate the money.  Then, if you want, roll the change or take it to the bank for counting with your child.  Writing a check is great but taking the money to the charity together is a tangible lesson.  Children learn in all ways including seeing and experiencing the location and people you are helping.

Some families donate time together.  They go and work at homeless shelters providing holiday meals or make it a monthly time to support their favorite charity. Making it age appropriate to your children is a perfect hands-on lesson.

My grandmother you to hand me a dollar to put in the basket at Sunday Mass. Yes, this was a start of a lesson.  However, the more intentional and planned and discussed donating is, the better the long-term outcome. 

Yes, as a parent you have plenty on your plate.  Teaching your child about charitable giving is a two for one accomplishment.  You are teaching your child about your values and helping others.  Plus, the giving circle will continue as they practice in future years the giving that you taught them. 

Remember, the dollar amount does not count as much as the action.  The attitude of gratitude is enhanced with giving.

Charitable Giving and RMD's

For those 70 ½ you can give directly to charity with your required minimum distribution.  Why is this important? 

Those over age 70 ½ need to take Required Minimum Distribution (RMD) from their non-taxable retirement accounts.  This means an annual distribution from the Traditional IRA, 401k, 403b or Thrift Savings account that was contributed to with tax-free contributions and grew tax-free.  The RMD does not affect Roth IRAs.

If this means you will be getting a RMD before the year end, consider this – your RMD from a Traditional IRA can go directly to charity.  This is a tax-free transfer if the money goes directly from your IRA retirement account.  This does not apply to your other retirement accounts unless the 401k or 403b is first rolled over to an IRA.

If you tend to give to charity a similar amount to your expected RMD, this type of planning needs to be in your financial tool box.  Not only will it save taxes because the RMD is not counted as income, your income will be lower than if you took the money and wrote the check to charity.  This is critical in planning cash flow because Medicare Part B premiums are based on your income.  Here in Vermont, property taxes are also based on annual income.  Removing income from your tax filing may help you in other ways. 

The law, which allows tax-free transfers of up to $100,000 from an IRA to a public charity is a great opportunity for 2017. Just remember, you will not be able to use the charitable deduction again if you itemized for your taxes.

Move quickly because though this is a possibility for the tax year ending December 31st, your financial institution is busy this time of year.  You will want the request and paperwork to be in process before December 15th to be sure this happens in a timely manner.

Finally, review with your tax advisor to see if this makes sense for you.

Giving In November With Thanks: Finding A Review on Your Charity

How do you know your charity is doing a good job?

Though we are great shoppers, we often do not research the causes we give to.  We are spending time on-line finding the best price, but many donors give without true knowledge of the charity.  Some charities names may sound good and they asked for money, so we give.  Before you give, investigate. 

There are two websites that analyze the charities for their fiscal responsibility and their true nature of helping the causes they represent.  If an organization is spending 50% of their money on administration costs, for example, they may not be the best place to give your donation.  Check out: Charitynavigator.org and Guidestar.org

 

 

Is Your Credit Report Information Breached? Follow These Steps:

What do we need to know about Equifax?

On September 7, 2017, Equifax, one of the largest credit reporting agencies in the US, announced a massive data breach.  The breach had gone on from May thru July of this year.  Personal information of 143 million persons was stolen from Equifax, including 240,000 Vermonters.

Why does it matter?

The pirated data included names, social security numbers, birth dates, addresses, and, in some cases, driver's license numbers.  This is information that could be used to open accounts or file fraudulent tax returns in victims' names.

What can we do?
Everybody –

Step One   Equifax.com

Check if you are affected   Equifaxat www.Equifax.com

The call center is available at 866-447-7559

For more information and backgroundwww.equifaxsecurity2017.com

Those affected-  Enroll in the free Equifax Identity Theft Protection and Credit File Monitoring Services 

Why Fiduciary Responsibility Matters To You.....

After years of debate and refinement, a Department of Labor ruling was signed last year and ready to go for April 1st.  This ruling was to expand  the “investment advice fiduciary” definition under the Employee Retirement Income Security Act of 1974 (ERISA) – the rules governing all retirement plans and the investment advisors to the plans. On February 3, 2017, President Trump signed a Presidential Memorandum directing the Department of Labor to examine the Fiduciary Duty Rule, delaying the implementation.

The delay is set to be released as of June 9th.  At least that is how it looks today. 

What does the ruling mean to you? This ruling would mean that all retirement advisors would have to act by Impartial Conducts Standards, which is: providing best interests advice, for reasonable compensation, and make no misleading statements. 

I hear you…What do you mean? They are not acting on my behalf now?  Maybe.  Depending who is advising you.  Here is the low-down:

·         Registered investment advisors regulated by the Securities and Exchange Commission or state securities regulators are already held to a fiduciary standard of conduct under which they must act in their clients' best interests.

·         Securities brokers, however, are regulated by the Financial Industry Regulatory Authority under a "suitability" standard. The investments they recommend must be suitable for investors, but they are not required by law to act in their clients' best interests.

·         Certified Financial Planners, CFPtm   have been required to maintain this fiduciary standard since 2007.

So because every advisor follows different rules, depending who you talk to, the regulation is either long-overdue or going to cause all sorts of expenses and problems. Proponents of the fiduciary rule believe it is needed to protect retirement savers from conflicted advice and reign in high commissions and kickbacks in sales of retirement products.  The naysayers say the problems will include more expensive litigation and will limit retirement options.

Knowing who your investment advisor works for and what standards they follow is critical.  And knowing that as the ruling stands, this fiduciary standard requirement will only apply to retirement advising.  Your money outside of retirement may still be advised by the suitability standard.  This leaves you needing to ask lots of questions of your advisor so that you know not only the investment, the fees and the rules they follow.

If you like the small print and want to read here : http://webapps.dol.gov/FederalRegister/PdfDisplay.aspx?DocId=28806

What is the bottom line on Fiduciary Responsibility? Whatever company the professional represents, you want to be sure they have your best interests in mind. If the advisor has fiduciary responsibility legally, there will be no conflict of interest when working with you.

Ask the question.  Maybe even get the answer in writing to protect yourself and your financial interests no matter how many times the ruling gets delayed.  You want to know that the advice you are getting is in the “best interest” for you.

 

Olympic Mania

I Love the Olympics!

The games, the amateur nature of the sporting events, the faces of the athletes who train four years to get there. 

This year’s Olympics in Brazil is a special treat because I get to watch more events; both because my schedule allows and the wonderful television coverage on several stations, thanks to my husband’s insistence that we pay to get his favorite sports stations. 

I have been thrilled to watch sports that typically I would not see on TV; sculling, shooting, archery, sailing.  I have learned that trampoline is an Olympic sport, and why that is so. What a tough task these aerial gymnasts have to face--the twists, the turns and moving surface. It is challenging and tough to watch. 

Are these games so enticing because I am watching with a new interest, or am I watching at such a fever pace because I can flip through the stations, record programs and then speed past the commercials?  Contributing to the intensity, I know that at age 54, I cannot do what these athletes do. I no longer train hard and never did at that level. Nor do I have the athleticism. I realize that there are sports that have older participants – from shooting to archery to equestrian. However, it's doubtful that they took up the sport in their 50’s, as I would have to do. 

I‘ll keep watching to share the athlete’s joy and their tribulations and trials too.  The stories are fabulous... from what they have given up to train, to who their coaches as are. One young crew recently graduated from medical school. Her Dad, who was a former Olympic qualifier, is her coach. She is now an Olympic Silver medalist. Other athletes have family members as coaches or have been with their coaches for decades.

Michelle Carter, the gold medalist in the shot put, has the Olympics in her blood. Her father also medaled in the shotput in 1984.

These stories ignite my interest, and the surprise winners do too   Maya Dirado and her gold ... a woman with a quiet faith, as it turns out, who already is married with a home and fabulous job to go back to after the Olympics. Will her medal change her mind? Will she want to ride her gold to glory, perhaps to the next Olympics, taking advantage of the promoting and marketing potential of her gold status? Her quiet, vibrant ways are in direct contrast to the Great Britain male team of synchronized divers who medaled and proudly said, "We have our faith in God that carried us through the event. It is His plan."

Such a diverse host of stories and people. That is the draw of the Olympics for me -- nations coming together. From seeing a woman from Saudi Arabia in her hijab run the 100-meter dash to watching Estonia's female triplets participating in the marathon. From knowing a 35-year-old got a medal in swimming to the O’Donovan brothers winning a silver in light weight sculling--Ireland’s only medal so far in the games. All these hardworking individuals who not only have talent but work hard to accomplish much, now sharing on the larger stage. 

The Opening ceremonies were beautiful.  Brazil did an incredible job with the event with a far smaller budget than London, demonstrating that creativity does not cost money and the budget of the Olympics is far from the point of the races.

The beauty of the night was highlighted by the standing ovation given to the refugee team.  That is the true nature of the power of the Olympics. There is a space for all athletes, even these ten without a country. The Olympic committee made a statement opening up the competition to these refugees at a time when refugees are marginalized.  These athletes fought to get here beyond what anyone can imagine.

The coming together for greater good and sportsmanship are the point. These events are the focus on the positive that the world needs.  

I am delighted to get the reminder every two years. The Olympics may be an inspiration to train but for now, I am doing my share of experiencing the thrill of the game. My back hurts from sitting, yet I will keep on watching.

Getting Good Value

Last month I wrote my newsletter about cost versus convenience.  There is so much we pay for in the name of making our lives easier in this fast paced world.  Time is money is the often repeated mantra.

Many times we know the added price of purchases we make for convenience.  The already cooked chicken at the grocery store or the take out meal rather than making dinner.  Sometimes the added cost is more subtle - a few dollars extra to fill up at the local gas station or two dollar fee at the nearest ATM.  

Other times we just feel pressured or have no time to do a bit of footwork to find a better price - whether it be a shoe store with our size, the book on-line or the cell phone insurance better covered by our home owners policy.  The fact of the matter is these costs do add up.  For those who are moving fast, the $80 a month in extra costs means close to a thousand dollars less in our pockets at the end of the year. 

The next time you feel the push of time, ask your self:  Can this wait?  Is there another way to pay?  The secret to good financial management is conscious spending.  Slow down and spend wisely.

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College is Coming: How do you help your College Senior?

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Here is a great article on college and how to help your child before they are committed to a school.  Help them understand their financial decisions.

The important thing is to start this conversation early - like freshman year in high school for they are saving and preparing for the responsibilities of college.  In my role as college instructor, I see too many graduating Seniors not ready to take on their financial loans because they do not know even how much they have.  

http://www.reuters.com/article/us-money-education-college-idUSKCN0XM1EZ

 

April 15th is Tax Day...Breathe and Relax...Or Not?

Today is April 15th.  Well known in our country for tax day.  By now, your taxes are done and you are relaxed.  However, if they are not done, this year you have a weekend extension.  Due a Washington DC holiday which falls on Saturday, you have until Monday April 18th to file.  So those procrastinators out there get a couple of extra days.

What if you have filed?  Should you rest and relax?  Not yet!  Studies show that the average tax payer takes 16 hours to gather information before income tax forms can be prepared.  So while the time and energy you used to get organized is still in your mind, set aside two or three hours this weekend.

Then, use this time to review your filing system and checkbook to see where you can simplify for next year.  You may want to start by gathering your tax deductible information from January 1st to March 31st of this year.  Then consider these tips:

Use one checkbook and one credit card for all tax deductible expenses.  These include real estate taxes, medical expenses and charitable deductions.  Then, when time comes to total the numbers from 2016, everything is in one place.

Make all your charitable donations in a designated month, say November.  Gather all solicitations and requests in a folder and review at that time.  No more wondering if you already gave, your donations are recorded and predictable.  Knowing how much you have to give and giving it all at once, assures you have a plan and are more conscious in your giving.

Set up a financial filing system.  You want to do this in hard copy and on your computer to make it easier to access the information when you need it next year.  No need to recreate the wheel each time.  When tax documents show up, you want to have a designated place to put them.  No more digging or calling for copies of documents misplaced.

Time is money.  Take the time now to save money and even more time in the long run.

Happy Spring! 

 

Feeling Overwhelmed with Retirement?

Retirement is a large concept.  Even retiring at 65 means you are probably planning for the next twenty-five years.  This is difficult to do.  Think about the past twenty-five years.  Could you have planned on everything that happened in your life? No one knows the future. 

However, when it comes to retirement, you can put money aside to build up the chances of a very good retirement.  Do not compare yourself to others.  Everyone is different.  Various needs, spending habits and dreams mean different money needs.

Also, do not compare your savings to others.  As you can see by the research, the average person nearing retirement has only $12,000 saved for retirement.  We all need to beat the average to have a retirement that has strong underlying financial support.  Start saving now. 

http://www.nirsonline.org/index.php?option=com_content&task=view&id=768&Itemid=48

 

 

Financial Myths: The Car Lease

Just found this article on-line regarding buy versus lease a vehicle.  This has lots of great information. The steps at the end to calculate the cost of leasing against buying I found a bit difficult to follow.  But even if you do not want to run the numbers, review the comments as they have more good information.

http://www.boston.com/cars/news-and-reviews/2016/02/14/buy-lease-the-math-make-the-call/8A30TNLK43oyPq4hMYHTjI/story.html?p1=story_hp#comments

 

Personal Finance Tips from Bernie Sanders Campaign

None of us can avoid the attention the election is commanding on the television, radio or social media.  With the results reported, analyzed and criticized yesterday, I could not help but reflect on the winners and their financial strategies.  So Trump and Sanders won big in the New Hampshire primary.  What can they teach us?  

No matter what political stances you have, I believe they are demonstrating solid financial principles in their campaigns.  Some of their money principles we know.  Some we need reminding.  

Trump has the money to finance his campaign.  The reminder: Money can buy you what you want. Or think you want.  This is no news in our society.

Bernie beat out Hillary Clinton.  His financial strategy?  Build a campaign treasure chest from small donations from individuals. This demonstrates two financial principles immediately. First, he is using the cash mentality.  Have cash, spend cash and reap the benefits.  Second, he is taking the slow but steady approach to make big change.  

This principles are so important to us all.  Whether we want to get out of debt, save for a home or get ready for retirement, Bernie's campaign financing is a good reminder that complicated strategies are not needed.  

Want to learn other lessons from Bernie's Campaign?  There are several more life-long money lessons he is demonstrating.    Stand by here for more or sign up for next week's newsletter to understand more: www.moneypeace.com/email-newsletter-archive

 

 

Unexpected Benefits

With this new behavior of not entering stores, I realized that I use stores to kill time.  I do not call this activity shopping persay.  This is unplanned time in stores because I am early to get somewhere or I need a mental break on my way to a meeting.  More times than not, I do not spend money but there are times I do.  And the real issue is that I find things I did not want before I entered the store.  So I may go back to get them.  Or think I “need” because I saw something new. 

The truth is the less time I spend in the stores, the better off I am – financially and mentally.  There is nothing rolling around in my mind or making it to my shopping list that I think I just have to get. 

There is an additional benefit as well and I discovered last Wednesday.  I was downtown Burlington after a meeting and had an hour before a class I was taking that night.  A short walk around town without going into a store was lovely, but I was not going to push my luck with the temptation around me.  I got in my car and headed up to UVM campus still arriving more than a half hour early.  As I headed to our meeting place, I figured I would have some quiet time to read alone. 

Instead I was met by another student who was arranging the classroom.  As I helped her set-up the chairs, we had a wonderful conversation.  When another student joined us, the conversation even got better.  When the fourth member of our class came in lamenting her need for a new job and struggle with a cover letter, we all offered to help review it for her.  The connection was fun and light and engaging.  Best of all the time flew. 

What I discovered was that that this time was so, so much better than the quiet time of walking aimlessly through a store.  I felt much more recharged and engaged in the world.  And I did not have the feeling that I was missing something or in need of something.  I had found something.  In the time that I had opened up, I had come to realize the personal connection that is very much needed to maintain my balance in the world.

I may just consider arriving early to a few more places in my life.

Getting Easier...Or Did I Forget My Wallet?

Not going in stores is getting easier.  Yesterday I found this commitment easiest to keep.  I had left my pocketbook with my money and credit and debit card at home.  Yes, given I was going to a ski area to ski, not shop.  However, the absence of these tangibles meant that there was no dilly dallying on the way home.  No reason to stop anywhere. 

At the ski lodge, there is a wonderful little ski shop.  I literally stood at the entrance and walked in two steps when I remembered my commitment.  Two steps out and I was back on track.  How does one spend a day without a spending while skiing?  Well, since I was volunteering for Vermont Adaptive - a fabulous program - I did not need to pay for my ski day.    But also keeping snacks and a water bottle in the car makes it manageable.  The water bottle can be refilled in the cafeteria and one really can survive for a day without money, especially if they are doing something fun.

The weather was fabulous, the snow soft and the people wonderful.  I will treasure all week the smile on the lucky young man I got to ski with yesterday.  He loves to go fast, do bumps and enjoys the gates.  He will be ready for the Special Olympics next month.

Money had nothing to do with yesterday.  How would you survive a day without money?

Financial Myths: Your 401k Loan

The financial myth around 401k loans is purely based on emotions and not facts.  Yes, sounds good if you are going to take a loan I hear, "May as well take it from yourself."  Yourself being your 401k.

However, what employees miss is that the money in your 401k is pre-tax money.  When you pay the loan back, you use after tax money.  So you have paid taxes on that money already and will pay taxes again when you withdraw the money in retirement.   

So before you calculate in the potential growth of investments or the downside risk of not being able to pay the loan back, consider simply the tax issue.  A loan is a loan.  But who and where you take it from matters.  

Listen to the numbers not your co-worker.  Even if the new fun car is calling.....

Stopping Shopping...More Time

Okay so it has been three days since I have entered a store.  This plan of mine does not include groceries stores, as our family has to eat.  But I will not cheat and buy things more than the food we need when I am grocery shopping for the next 28 days.

What have I learned just this weekend without shopping?

Time saved: I do not need to read the advertisements in the Sunday paper.  They can go right to recycling.  I am not entering a store because there is a sale.  This includes the flyer I had already put in my car because there was a good deal.  I recycled that flyer and took stopping at that store off my list of things to do.

Key Found: Since I had a bit of time and was in my car without driving to grab and dispose of the dangerous store flyer, I decided to clean it up a bit.  To my surprise, I found a key under the seat that I had been looking for during the past month.  Yes, I had already looked under the seat.  I was about to get another one made.  As it was my business post office box key, I saved $9 because of yesterday's discovery.

Web Browsing:   Yes, Internet shopping is shopping to me.  Without shopping and browsing on the web, I have found several great sites on my other interests.  So fun to read more about genealogy and Irish history - all for free.

Stop Shopping to Save Money

Pondered today what I heard about not going into shops.  This was on the radio by a behavior psychologist.  When we go into shops we see things that we did not know we needed.  Then we increase our wants and desires.  The psychologist suggested we do not go in stores to curb spending. I have done this successful at different times.  Maybe I will try this again now.  I had already slowed down the process by taking both my credit cards out of my wallet – the one for business and for personal.  They sit home in my office.

Why not revisit this idea?  I decided on Friday the 23rd of January to not shop for a month. 

I can do my one month without shopping at stores.  Without going into stores.  I can do that.

Standby for an up date...Or join me in the pledge!