I tend to be a tad O.C.D. by nature and plan for worst case scenarios for our household, which in my book is just smart planning. We've recently been meeting with our lawyer to get our wills in order, as well as our individual health care directives and general powers of attorney documents drafted. Additionally these documents will provide provisions for when we have children as to how they would be taken care of in the untimely event of both of our deaths. Having to consider who will take care of our child and draft legal documents around the fiscal aspects, as well as the care giving aspects has been very fascinating to discuss with siblings on both sides of our families.
We're drafting our comprehensive wills with provisions that turn the assets over into a trust. Then, the child can only gain access to the fiscal resources when they are older and more responsible, with the exception that our primary and contingent named care givers can tap the assets if they need them to care for our child. I always joke and sometimes say..."Today is the day I could be wiped out by a bus," so it's nice to get all our wishes and directives down legally on paper and get this important household document in place. Regardless if you have children in the picture currently or planned, every household needs a will in place and other documents to make it easier when you do finally go. Being in a community property state, versus common law state makes for some trickier rules about probate and death.
Showing posts with label Financial Tips. Show all posts
Showing posts with label Financial Tips. Show all posts
Monday, August 4, 2008
Friday, August 1, 2008
Let's Make America Thrifty Again
What if convenience stores sold savings bonds instead of lottery tickets? A call to turn our nation of debtors into savers.
I loved this article in today's online edition of Money Magazine. Though interest rates are in the toilets these days, the concept of making "saving" and giving access to savings instruments is a great idea. I remember my savings account as a kid growing up at Tracy Collins Bank [bought out by West One Bank, then bought out by US Bank] was 10%. My employer now even offers payroll deduction for various savings programs, which can be a great idea for people who are not disciplined enough to save every pay period. The point in the article that the average U.S. Household spends more on lottery tickets than they do on basic dairy needs for their homes was shocking. Saving for some people must really be a hard thing. If you just learn to do it automatically, even if it's only a few cents or bucks, it becomes habit.
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Here's one really simple plan to reach all kinds of would-be savers: Make U.S. savings bonds ridiculously easy to buy.
Peter Tufano of Harvard Business School observes that the government has actually eliminated its marketing budget for EE and I bonds. Yet these are very effective savings tools, especially for the younger and lower-income savers that banks aren't trying to attract. (Bet you didn't know this: It's not uncommon, Tufano has found, for banks to turn down people for a basic savings account if they've bounced checks in the past.)
Tufano and Princeton's Daniel Schneider have proposed adding a line to tax forms so you could get part of your refund back in bonds. Aside from the convenience, this would send a signal that Uncle Sam thinks saving is a good thing to do with your refund. Another idea is to sell savings bonds in retail stores, perhaps in the form of gift cards. My grandmother would have loved that.
Tufano has also been studying a wilder notion. How about combining savings and lotteries? "The average household spends $514 a year on lotteries," says Tufano. "That's more than they spend on dairy products."
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Though some of these suggestions are a bit extreme and most likely will never happen, I agree on the main point. Consumers and retailers alike need to be more focused on savings, and less contingent on credit.
I loved this article in today's online edition of Money Magazine. Though interest rates are in the toilets these days, the concept of making "saving" and giving access to savings instruments is a great idea. I remember my savings account as a kid growing up at Tracy Collins Bank [bought out by West One Bank, then bought out by US Bank] was 10%. My employer now even offers payroll deduction for various savings programs, which can be a great idea for people who are not disciplined enough to save every pay period. The point in the article that the average U.S. Household spends more on lottery tickets than they do on basic dairy needs for their homes was shocking. Saving for some people must really be a hard thing. If you just learn to do it automatically, even if it's only a few cents or bucks, it becomes habit.
----------
Here's one really simple plan to reach all kinds of would-be savers: Make U.S. savings bonds ridiculously easy to buy.
Peter Tufano of Harvard Business School observes that the government has actually eliminated its marketing budget for EE and I bonds. Yet these are very effective savings tools, especially for the younger and lower-income savers that banks aren't trying to attract. (Bet you didn't know this: It's not uncommon, Tufano has found, for banks to turn down people for a basic savings account if they've bounced checks in the past.)
Tufano and Princeton's Daniel Schneider have proposed adding a line to tax forms so you could get part of your refund back in bonds. Aside from the convenience, this would send a signal that Uncle Sam thinks saving is a good thing to do with your refund. Another idea is to sell savings bonds in retail stores, perhaps in the form of gift cards. My grandmother would have loved that.
Tufano has also been studying a wilder notion. How about combining savings and lotteries? "The average household spends $514 a year on lotteries," says Tufano. "That's more than they spend on dairy products."
----------
Though some of these suggestions are a bit extreme and most likely will never happen, I agree on the main point. Consumers and retailers alike need to be more focused on savings, and less contingent on credit.
Wednesday, July 2, 2008
Bear versus Bull
At work I get asked by colleagues what to do with their retirement allocations in lieu of the declining market. Given my background in banking and financial services, I keep pretty close tabs on what is going on. I am by no means an expert. However, I do get asked for advice all the time. When people consider cashing out assets to re-invest, or to drastically alter their investment allocations, my best advice is to take things in stride and not be knee-jerk about it. I liked the following two points in today's issue of Money Magazine.
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Remember your investing goals:
The problem in big market drops like these, they tend to make us forget the real goal of all our savings and investing. That's to stash away enough money to maintain your current standard of living in retirement.
Much more important than your fluctuating monthly balance today, is the one you see 10 or 20 or 30 years from now, when you actually need that money. In that time, stocks will go up and down and up and down again. So the fact that your 401(k) is down 20% from what it was eight months ago may not have much bearing on what you will have in retirement.
Put today's economic peril in perspective:
Before you panic over today's headlines, and how far stocks could fall, consider the relative good health of today's economy.
1) In the early 1970s, economic output was falling. But today, despite the sluggishness, GDP is still inching ahead.
2) In the early 1980s, unemployment hit 10.8%. Today, the rate is 5.5%, or about half that.
3) Inflation topped 12% in the 1970s and 14% in the early 1980s. Today, it currently is at 4%.
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My advice is to ride it out. If you don't have a substantial rainy day fund set up, than yes, you should allocate funds to building that bucket of money. Despite the ups and downs our investment funds are yielding substantially more than any savings or online savings rate we could get in today's current banking / credit union sector.
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Remember your investing goals:
The problem in big market drops like these, they tend to make us forget the real goal of all our savings and investing. That's to stash away enough money to maintain your current standard of living in retirement.
Much more important than your fluctuating monthly balance today, is the one you see 10 or 20 or 30 years from now, when you actually need that money. In that time, stocks will go up and down and up and down again. So the fact that your 401(k) is down 20% from what it was eight months ago may not have much bearing on what you will have in retirement.
Put today's economic peril in perspective:
Before you panic over today's headlines, and how far stocks could fall, consider the relative good health of today's economy.
1) In the early 1970s, economic output was falling. But today, despite the sluggishness, GDP is still inching ahead.
2) In the early 1980s, unemployment hit 10.8%. Today, the rate is 5.5%, or about half that.
3) Inflation topped 12% in the 1970s and 14% in the early 1980s. Today, it currently is at 4%.
----------
My advice is to ride it out. If you don't have a substantial rainy day fund set up, than yes, you should allocate funds to building that bucket of money. Despite the ups and downs our investment funds are yielding substantially more than any savings or online savings rate we could get in today's current banking / credit union sector.
Thursday, June 26, 2008
Reducing Household Food Expenses
Here is another article I ran across today in the L.A. Times. Learning to reduce food expenses, can really add up over a 52 week period. We've been cutting back on some luxury items in our household and really trying to eat local, in season fruit and vegetables that are on sale, in an effort to reduce overall expenses for imported items that may not be in season. Here are some highlights from the article.
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Food.
Not only do you need to eat food to live, the expense of it for the average family can eat you alive! Since food is a necessary and recurring expense, just saving, for example, $20 a week on your purchases can convert to over $1000 in savings over the course of a year.
1.) Try to plan in advance. By knowing what you need, you will be able to buy in larger quantities (almost always less expensive) and cut down on convenience food purchases (always more expensive).
2.) If you use national brands, spend a little time clipping and using coupons. $1.50 invested in the Sunday newspaper could save you $20 or more at the checkout. Organize the coupons by type, so as you develop a shopping list you can make a notation if you have a coupon.
3.) Consider store brands or generics. You may find the quality is equal to (and sometimes better than) the national brands, and store brands/generics are generally considerably less expensive.
4.) When it is on sale, stock up. Of course this only applies to those items that you use on a regular basis. Stocking up on an item which you use once a year doesn't make sense (and robs you of spending money, not to mention shelf space).
5.) Shop at the store that is the cheapest overall. Surveys have shown that there is sometimes as much as 10-15% difference on identical grocery orders at 2 different stores in the same area. If you spend $500 a month on groceries, that can equate to $600 to $900 a year in savings. Don't throw away your money just because it is your habit to shop at a certain store.
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I'm noticing our food bill is going down. We do have local organic produce delivered to our home weekly. We are basically just going to the grocery store for dairy and meat items, as well as pantry staples. We are seeing the results of taking the time to plan healthier meals, and incorporating more vegetables. I would say one thing to our success is to allow ourselves to at least enjoy one meal a week that "is the good life," or whatever we want to eat. This way, we both are sticking to eating the healthier items on a more regular basis.
----------
Food.
Not only do you need to eat food to live, the expense of it for the average family can eat you alive! Since food is a necessary and recurring expense, just saving, for example, $20 a week on your purchases can convert to over $1000 in savings over the course of a year.
1.) Try to plan in advance. By knowing what you need, you will be able to buy in larger quantities (almost always less expensive) and cut down on convenience food purchases (always more expensive).
2.) If you use national brands, spend a little time clipping and using coupons. $1.50 invested in the Sunday newspaper could save you $20 or more at the checkout. Organize the coupons by type, so as you develop a shopping list you can make a notation if you have a coupon.
3.) Consider store brands or generics. You may find the quality is equal to (and sometimes better than) the national brands, and store brands/generics are generally considerably less expensive.
4.) When it is on sale, stock up. Of course this only applies to those items that you use on a regular basis. Stocking up on an item which you use once a year doesn't make sense (and robs you of spending money, not to mention shelf space).
5.) Shop at the store that is the cheapest overall. Surveys have shown that there is sometimes as much as 10-15% difference on identical grocery orders at 2 different stores in the same area. If you spend $500 a month on groceries, that can equate to $600 to $900 a year in savings. Don't throw away your money just because it is your habit to shop at a certain store.
----------
I'm noticing our food bill is going down. We do have local organic produce delivered to our home weekly. We are basically just going to the grocery store for dairy and meat items, as well as pantry staples. We are seeing the results of taking the time to plan healthier meals, and incorporating more vegetables. I would say one thing to our success is to allow ourselves to at least enjoy one meal a week that "is the good life," or whatever we want to eat. This way, we both are sticking to eating the healthier items on a more regular basis.
Wednesday, June 18, 2008
11 Ways To Have Fun Cheaply
I recently read an article through CNNMoney.com that I liked. It was entitled,"11 Ways To Have Fun Cheaply!" With that said, all of us are frugally savvy folks, and we should not limit ourselves to boring activities when money is tight, or when we are all trying to save more dollars for our rainy day funds or retirement. Given current gas prices, food prices and inflation in general as of late, I feel we all need to think of ways to become more fiscally frugal. It will only benefit us in the long run.
"You either spend money you don't have, which is credit, or you exercise your creativity," says Steve Economides, co-author of "America's Cheapest Family Gets You Right On the Money" and the HomeEconomiser newsletter, with his wife, Annette. "We are sometimes so lazy in America, we think we can just pull out the credit card and that's going to create the happiness and the fun times we want, and the truth is, if we put a little mental energy into it, we're going to have more fun, spend less money and probably learn more. It's being resourceful."
With this mind-set, get ready to rediscover what Seattle and the local resources have to offer. You might be surprised to learn how much you can do while spending very little. I came up with my own list of 11 items.
Enrich your recreation with these frugal Seattle activities:
1. No cost community events or church events
2. Museums on free night offerings
3. Off Broadway shows and performances
4. Factory and business tours
5. U-pick farms in greater Puget Sound area
6. Pot-Luck gatherings at local parks
7. County or State Fairs w/ discount coupon offerings
8. Library for books, magazines or movies
9. Volunteering your time, not just contributing money towards something
10. Movie rentals, versus first run in the theaters
11. Container Gardening at home
The list could go on and on. I'm curios to other people's thoughts on low cost entertainment, since I tend to be a tight wad by nature. I'm going to start providing tips that I find are useful, or things that have worked for us in the past. It's all subjective, but it is nice to learn what works and what does not work for others.
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