Take Pride in Your Finances Year-round

Pride month wraps up this week. As noted in my earlier blog posts this month, the LGBT community faces many financial hurdles just as we still face social and civil rights hurdles. Some hurdles, like acceptance, may take a lifetime to overcome. Others, such as improving your financial well being can begin immediately. So, take the euphoria of Pride and decide that it is time to help yourself on the road to financial fitness.


It’s true that there are a variety of factors working against you. For example, LGBT folks often feel the need to live in high-priced areas such as New York, San Francisco, Chicago, Miami, and Los Angeles to feel safe, feel accepted, find community, and find fulfilling work. Many LGBT people tend to overspend in their youth influenced by glossy lifestyle magazines, blogs, and social media. This is a bit celebratory and is also perceived as a need for building community and acceptance. With age usually comes the wisdom that your friends will always be your friends and you don’t need to spend to impress. This takes time, and the debt incurred can be a challenge to overcome. LGBT folks still face hiring and workplace discrimination at various levels. This can lead to earning less, sporadic employment, or under employment, and compounds financial hurdles if you are living in a high-cost area and have a spending problem.

It’s not all dreary, so cheer up! We are making progress in society at large, and marriage equality has been a huge boost socially and financially. Here are a few things to keep you moving proudly forward.

Take Pride month euphoria and carry it forward with you into your personal life. Take Pride in your personal accomplishments and regularly build on those. You should especially take Pride in the fact that you acknowledge we can all be better with our finances. Start small, and build. Your first step is simply acknowledging you want to be better about your financial health and wealth.

Look at your most challenging area first. This is very personal for each of us and it may be spending, earning, lack of savings, etc.  Take one small step each month to make that less of a challenge. If it’s saving, look at ways to increase saving. If it’s spending, review and revise your spending plan. If it’s earning, document your performance improvements at work over time and ask for a raise. Are you interested in a side gig? That could help you earn more if you have the capacity to take on more work.  

Review your cash flow. Look at it monthly and calculate an annual estimate as well. Prepare a simple personal balance sheet and see where you stand. This exercise is valuable because it can help you with spending, saving, and earning. It really clarifies what’s going on in your financial life.

Generally speaking, most folks need to focus on building an emergency fund of cash, monitoring their monthly cash flow (know what you own, what you owe), and work on destroying debt. I am often asked which should occur first? The answer is that you work on all areas simultaneously, but in the beginning, you may need to focus more in one area. That’s where my final tip comes in: get help.

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You can now search for a fee-only, LGBT friendly adviser from resources such as the Certified Financial Planner board of standard’s letsmakeaplan.org, or the National Association of Personal Financial Advisors, or the XY Planning Network (fair disclosure, I am a NAPFA and XYPN member and in good standing with the CFP® board). You can also utilize technology to help you. There are many ways to go such as using budgeting apps, expense tracking, and even personal finance blogs (like this one!), and social media sites. As an LGBT community member, I can relate. And as an independent Certified Financial Planner™, I can help you understand your finances, define your goals, and take charge. Contact me and let’s get started.  Happy Pride!

#talktometuesday #getstarted #HowIcanHelpYou #GetHelp #Hireaplanner #Pride #Pride2019 #CFPPro #savemoney #LGBTQ #QueerMoney

Financial Planning for LGBT Relationships

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Many people think that with the passage of marriage equality, folks in the LGBT community no longer need financial planning for same-sex couples. True, marriage equality made things easier for those who want to marry and ushered in many protections under federal law. However, there are still challenges in the LGBT community regardless of your relationship status.

For starters, if you want to get married you probably should. There are a lot of benefits to being married that go far beyond financial considerations. Prior to marriage, there is a lot to discuss with your potential new spouse. Everything from monthly budget responsibilities to debt to estate planning should be discussed. You need to know that going into a marriage does have its own financial challenges.

Consider that if you are both high earning individuals, you may face the so-called marriage penalty. That is, your overall burden of taxation will likely increase.

You may encounter loss of government benefits if you are receiving benefits and marry someone who is a high earner. Prior to marriage, you should seek advice and review any benefits that could be at risk.

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On the positive side, marriage can lead to some very nice financial benefits. For starters, spouses have an unlimited marital deduction. What does this mean? Spouses can transfer an unlimited amount of assets to each other, at any time, even at death, tax free!

What about Social Security? Here too, there can be a benefit. A lower-earning spouse may be entitled to a higher payout based on the higher-earning spouse’s record. This can be a financial boon for the lower-earning spouse!

What about those who choose not to marry? This is where financial planning really comes into play. First of all, if you are in a relationship, but not married, you may need more planning than a comparable married couple. Let’s look at some examples.

For starters, the above noted unlimited marital deduction does not apply to those who are in a relationship, but not married. This means that you will at minimum need to have beneficiary forms in place, a will, and possibly other documentation so that your partner receives everything you intend to leave him or her. However, your heir may still face taxation that a legal spouse would not in the same situation.

Custody, visitation, and end-of-life planning rights may be more complicated if you are not the legal spouse. Depending upon your state of residence, you may not have any legal recognition should you need to make decisions for your partner.

Me and my husband enjoying a glass of bubbly at a family member’s home in Albion, CA.

Me and my husband enjoying a glass of bubbly at a family member’s home in Albion, CA.

On the plus side of not being married, if you are both earning high incomes, you will likely be filing separately at the federal level and this may reduce your overall taxation as a couple! That may be one of the few money-saving bright spots.

Separating may also be less complicated. There will be no dissolution procedure, alimony, or other support mandated if you are simply living together and not married.

If you are in a long-term, committed relationship and do not wish to marry, you should definitely seek out a fee-only Certified Financial Planner™ to go over your options with you. It’s likely that you will at minimum need to create a co-habitation agreement, retitle bank and investment accounts, and possibly set up a trust. Even with taking these steps, your partner may still be exposed to burdensome taxation and legal challenges that married couples wouldn’t face. A qualified estate planning attorney is worth the money and time for both married couples and those living together who do not wish to marry. For those who do marry, financial planning can help with aligning your goals, maximizing benefits, taxation, and a host of other financial concerns.

As an independent Certified Financial Planner™, I can help you understand your finances, define your goals, and take charge. Contact me and let’s get started. #talktometuesday #getstarted #HowIcanHelpYou #GetHelp #Hireaplanner #Pride #Pride2019 #CFPPro #savemoney #LGBTQ #QueerMoney

3 Tips for Pride Month to Get You on the Road to Better Finances


No matter what letter you identify with in the LGBTQ rainbow, there are some basic steps you need to take to get your finances in order. So, take Pride in taking charge of improving your financial well-being. These first three steps seem easy, but embracing them and sticking to them will take commitment.

Tip one is to get organized! You need to know where are your financial documents. Pull together every document you can think of that involves your money. Think mortgage/lease agreement, bank statements (checking and savings), your latest tax filing, any investment statements you may have, insurance policies (home/renters, auto, health, long-term care, etc.), work benefit statements. Basically, any document that affects your financial life you need to have readily available. You also need to know what the document is, what it covers, and how it benefits you. If you don’t understand any of these documents, it’s time to consider making an appointment with a fee-only financial planner. My pro tip here is to keep all of these documents in one binder and have them readily available. An electronic copy is also a good idea. I like to offer my clients a grab-n-go binder to get them started. You customize yours as you see fit.

Tip two is to know what you owe and what you own. You’ve heard that old saying, ‘you don’t know, what you don’t know.’  Well, it couldn’t be more accurate when it comes to our financial picture. You must know and understand how much cash flow you have and how it is flowing. Prepare a simple, personal balance sheet detailing your assets, liabilities, and any equity. This is your snapshot in time of where you are and what you have. List all assets and equity on one side such as checking, savings, investments, home value, car value, etc. Next, list all of your liabilities such as credit card balances, car loans, student loans, mortgages, etc. Subtract your liabilities from the assets and this will yield your net worth at that time. If negative, don’t be discouraged. Again, this is a snapshot in time and you have the power to take control and make changes.


Tip three is to conquer your cash flow. This is where it starts to get real. If you didn’t like the results from tip two, this is where the rubber meets the road. You need to become conscious of your spending. In fact, even if your results in tip two were positive, your spending should now be harnessed and become intentional. You need to develop a spending and savings plan for your monthly cash flow. Over time, you will start planning your cash flow annually, but for now, take it one month at a time. Spend intentionally! Choose where you spend your money and target things that benefit you financially, and emotionally. Always pay yourself first! This is key to building wealth. Be sure you are saving from your income; be sure you are enrolled in any employer plans that pay matching funds; make saving automatic. A good target is to always be saving 15% or more of any income you have. If you are not there don’t worry, just get started.  

These first three tips seem basic, but they do involve examining and changing your habits. It may be hard to get started, but you’ll be PROUD you did! You may also need help. Seek out a fee-only Certified Financial Planner™ to help you. Even if you have debt, it could be money well spent as fee-only planners are supposed to work in your best interest. Be careful not to confuse this term with fee-based, or generic terms such as financial advisor, broker, wealth manager, etc. Those professionals fulfill different needs in the financial services world. You can read more in my post, Fee-only vs. Fee-based Advisers: Is There a Difference. As an independent Certified Financial Planner™, I can help you understand your finances, define your goals, and take charge. Contact me and let’s get started. #talktometuesday #getstarted #HowIcanHelpYou #GetHelp #Hireaplanner #Pride #Pride2019 #CFPPro #savemoney #LGBTQ #QueerMoney

It’s Pride Month!

Photo by   Sharon McCutcheon   from   Pexels

Photo by Sharon McCutcheon from Pexels

Last year’s protests and controversy around corporate sponsorship of many Pride events got me thinking about not only corporate money at Pride, but money in the LGBT community in general. Pride can be motivating, exhilarating, and even inspiring. Unfortunately, I’ve learned it can also be a reminder for many within our community of the sharp differences we face when it comes to income inequality within the LGBT community.

It’s common these days to see LGBT people portrayed as affluent in movies, television dramas, and other media. Think of characters like Will on Will & Grace, or Mitch and Cam on Modern Family, of the three gay male roles, two are portrayed as attorneys which many perceive as high income in our society. Many gay rags such as the Advocate and Out are laden with ads pitching expensive clothing, accessories, and travel. Pride destinations also sell VIP packages and expensive add-ons that many in the community simply cannot afford.

Photo by   Sharon McCutcheon   from   Pexels

Photo by Sharon McCutcheon from Pexels

Don’t get me wrong, there are those in the community that have done very well for themselves. But the myth of six-figure DINCs with designer pets living in tony zip codes still persists. Don’t just take my word for it, dig into the article, There’s a Lot of Money at Pride, but Not Necessarily in LGBT Pockets from the Daily Beast in 2018 for a deeper perspective. Want more stats? Check out the Williams Institute report (PDF) from 2013 cited in the article. Admittedly, that report is older, but there are few resources available. However, a newer report, Intersecting Injustice: A National Call to Action (PDF) from 2018 doesn’t show much change.

Let’s turn this positive! In my own way of helping, I’m going to offer tips for Pride month over the next few #TalkToMeTuesday blog posts to help remedy this situation. Anyone, of any income level, can improve their financial health and well-being with some work. It does take persistence, time, and even sacrifice, but we all have it within ourselves to improve. 

As an independent Certified Financial Planner™, I can help you focus on your finances month-to-month and not just during Pride. Contact me and let’s get started. #talktometuesday #getstarted #HowIcanHelpYou #GetHelp #Hireaplanner #Pride #Pride2019 #CFPPro #savemoney #LGBTQ #QueerMoney

Money and Family; Deciding to Give


So, you’ve decided to go forward with loaning money to a family member or friend. We covered basic steps to take in previous blog posts so be sure to go back and review those. You especially want to be careful with making sure your agreement (remember, get it in writing) contains a specific term and that it is not a demand loan. You also need to at least charge the IRS applicable federal rate or you could end up in a sticky tax situation.

Now that you have taken care of the basic mechanics, you need to prepare yourself.  To do so, remember to keep in mind not to lend money you need soon, or to lend money that you cannot afford to lose. That’s right, keep the worst-case scenario in mind – that you won’t be paid back! You need to be prepared for this because you don’t know what the future holds for your recipient. If they have truly fallen on hard times, they may not be able to recover. If the loan is for a new business venture, market risk is always a consideration. Be prepared to never see your money again.

You also need to let go. Once the money is out of your hands, you need to stay out of the recipient’s hair. The money has been given to the recipient and it is no longer yours. Trying to be involved and shepherd what’s done with the funds is not your place. Give the borrower some space and don’t meddle in what they are using the money for. No one likes being monitored and constantly hounded about they should be doing or how they should be using the money. If you cannot distance yourself from the loan and usage of the funds, you are likely not prepared to lend the money.

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There are a lot of practical steps you can take to lending money. In the end, it comes down to your interpersonal relationship with the borrower and whether you value the relationship more than the money. If that’s the case, you can make a best effort to recover your money but you may have to be comfortable with just lending the money and knowing you are not going to ever see it again. If you are being asked repeatedly to lend money, and never receiving it back, be strong and say no. Your generosity should never be abused. Your head can set the terms, but sometimes your heart may overrule the best financial steps you can take.

As an independent Certified Financial Planner™, I can help you decide if you should lend money. Contact me and let’s discuss your situation. #talktometuesday #getstarted #HowIcanHelpYou #GetHelp #Hireaplanner #familymoney #lender #CFPPro #savemoney #borrowmoney #lendmoney

Money and Family; Two Key Precautions

This month I am focusing on lending money to family or close friends. Family dynamics generally are fraught with more conflicts than lending to a friend. Regardless, this week I am giving you two key precautions to take if you decide to go forward with lending money.


First, be willing to charge interest. This is not so you can profit off of someone’s misery, but it could prevent you owing gift taxes (depending upon the amount you are lending) and the need to file a gift tax return. For 2019 you are allowed to gift any individual up to $15,000 without the need to file a gift tax return if indeed you intend for the money to be a gift. If you are going to be lending more than this amount, seriously consider charging interest. However, be sure it is a fair interest. Interest will also indicate that you are serious about being paid back and that the amount is not a gift. It will also show that there is an opportunity cost to lending money.

Second, get it in writing. If you truly expect to be paid back, get all of the details and terms in writing. This is a good way to outline all of the guiding principles and discuss the loan and terms in detail. Getting it in writing will help prevent disputes later on. Otherwise, your loan and the terms could become a matter of your word against the borrower’s. Getting the details regarding amount, timeframe, interest, and default can help resolve misunderstandings later should anything arise. Having the terms in writing is the best way to protect both parties.

Charging interest and getting the agreement in writing is both practical and smart. It documents that the loan is truly a loan and not a gift, and it clarifies the arrangement between lender and borrower. This will help protect both parties and provide a starting point for resolving issues that may arise.

As an independent Certified Financial Planner™, I can help you decide if you should lend money. Contact me and let’s discuss your situation. #talktometuesday #getstarted #HowIcanHelpYou #GetHelp #Hireaplanner #familymoney #lender #CFPPro #savemoney #borrowmoney #lendmoney

Money and Family; 3 Tips to Keep in Mind

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Last week I wrote a blog post about lending money to family and friends. If you recall, my first tip for you was to discuss the need for the money. Ask questions and don’t be shy about doing so. This week, I’ll give you three more tips to keep in mind.

The first is to consider lending cash. By this, I mean that you should not co-sign a loan or provide a credit card or charge account to a family member or friend in their name based on your credit worthiness with you as the responsible party. This will protect your good credit score and limit your potential loss to the amount of cash you hand over.  It will also keep your credit options available should you need a loan for yourself.

Second, consider the impact that lending the money will have on both your immediate and extended family. Once other family members find out that you have lent money, they may feel emboldened to ask for a loan as well. If you are unable to comply with this additional request, it could end up driving a wedge between you and the family member. Depending on the family dynamics and who you are lending to, it may be worthwhile to call a close family meeting and be open, honest, and upfront about who you are lending to and why. It could be that another family member is willing to help, thus easing the burden on you. Either way, you need to consider the impact that making a loan to one family member will have on the entire family.


Third, do not lend more than you can afford to lose! That’s right, it may seem obvious, but do not lend more than you can afford to lose because there is a good chance you will not see this money again. And, if you are going to help a loved one, you need to be comfortable with this possibility. You do not want to drain your own emergency fund or put your only savings at risk to help someone if there is a good chance you will never see the money again, or at least not for a very long time. Despite their good faith and best intentions, your family or friend may fall on hard times and not be able to repay the money.

There you have it: lend cash, consider the impact, and don’t lend more than you can afford. So far, I’ve covered some of the more dire points of lending money. Next week, I’ll cover practical tips if you do decide to lend money.

As an independent Certified Financial Planner™, I can help you decide if you should lend money. Contact me and let’s discuss your situation. #talktometuesday #getstarted #HowIcanHelpYou #GetHelp #Hireaplanner #familymoney #lender #CFPPro #savemoney #borrowmoney #lendmoney

Money and Family; To Give or Not to Give?


This month, I’ll be writing tips for you on how to handle family and friends who either ask to borrow money, or seem to always need help with their money. Before you think I am being cold and just downright mean, you need to stop and consider each situation very carefully. Keep in mind that a bad decision on your part could dramatically affect your own financial future! This week, you’ll receive your first tip, so read on!

Money, is an emotionally charged topic. It’s not that we should immediately say no to family or friends who ask for money, or other forms of financial assistance, it’s that we should have some ground rules in place. We also need to understand the ramifications of our actions. It’s not uncommon for money issues among family and friends to sour relationships.

So, before you say yes and dive in, you need to consider all aspects of lending money. You also need to know whether you can truly afford to extend help.  After all, money is a topic that generates a tremendous amount of stress for all of us. Let’s face it, whether you have too little, or even too much, money causes us stress.

To kick off this month’s topic, the first tip you should keep in mind is that it’s ok to ask questions and to think about whether you want to lend the money. As the lender, you should feel free to pursue your own due diligence so ask away! Go ahead and open dialogue with your family member or friend who has asked for money. After all, they started the conversation by asking you in the first place.


Don’t be shy about hashing out the why, what for, how much, etc. Don’t be general, be specific! Ask what they need the money for, and why they don’t have their own emergency fund. You can and should ask if they have considered a part-time gig, if they have tried a loan, or even peer-to-peer lending. Feel free to say you need time to think about it and don’t let yourself be pressured.

That’s the first tip for this week – open dialogue, ask questions. Check back next week as we continue our discussion about family, friends, and money. We’ll dive into even more tips and guidelines to help you tackle this topic and decide if you can, or should, lend money to someone close to you.

As an independent Certified Financial Planner™, I can help you focus on your finances and make decisions that are comfortable for you. Contact me and let’s get started. #talktometuesday #getstarted #HowIcanHelpYou #GetHelp #Hireaplanner #familymoney #lender #CFPPro #savemoney #borrowmoney

Five Key Financial Planning Steps You Must Know

This is the last post for National Financial Planning Month. I’ve been writing about financial planning for quite some time now, and I think it’s good to periodically review the meaning of the term. Remember, financial planning is a process. It’s a living process and it evolves and changes. It’s not just investing. Financial planning helps you make sensible, sound financial decisions determining how to meet your goals through proper management of financial resources. Here are the five basic steps to know.


First, get organized. Gather your documents so that you know what you have. Be sure to look for everything you can think of like bank statements, investment statements, insurance policies, mortgage or lease, and work benefits just to name a few. You should keep all of your vital documents together in one binder. That way, if you have to evacuate your home you can just grab your binder and go.

Second, you need to know what you owe and what you own. This is key in establishing your goals and determining how long it may take you to reach your goals. Prepare a basic cash flow statement to determine your net worth. List all your assets and total them up. Next, list all of your liabilities and total those. Your assets minus liabilities equals your net worth. Ideally, this is a positive number!

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Third, conquer your cash flow. You need to add up all money that comes in every month, and all of your monthly expenses. This cash in, cash out, is your cash flow. Your goal is to always have more inflow than outflow. This means you need to examine your wants and needs and truly grasp the difference. Further, you need to be intentional about where you spend your money so that it works harder for you, rather than you work for it. Remember, always pay yourself first!

Fourth, mitigate your risk! Risk can be a wealth killer. Review your insurance for proper coverage (don’t buy too much, don’t buy too little), tackle your debt, build an appropriate cash emergency fund, and have your estate planning documents in place. Rich or poor, single or married, everyone needs to manage their risk. For help, reach out to a Certified Financial Planner™.

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Fifth, it’s time to put it all together. Set your goals, be specific and write them down. Determine what steps you need to take to put your plan in action. Finally, do just that – implement your plan. Keep in mind that you need to monitor your plan and be flexible.

These are just the basics. Each step above can encompass many aspects and is very specific to your situation. Don’t know where to start, call me! As an independent Certified Financial Planner™, I can help you establish and maintain your financial plan. Let’s get started! #talktometuesday #education #Hireaplanner #FinancialLiteracyMonth #NationalFinancialLiteracyMonth #financialsavvy #financialplan

Increase Your Financial Savvy!

As you know, April is National Financial Literacy Month. April is a perfect time to get started establishing and maintaining healthy financial habits for yourself. If you are afraid of anything financial or don’t like numbers, and not sure where to start, here are some easy ideas.

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Pick one article or short video per week (or month) that deals with a topic area you want to learn more about. Make sure it is something relevant to you. Pick anything from basic budgeting, to savings tips to reach a goal, retirement, Social Security, real estate, charitable giving, personal taxation… you name it. It’s your choice!

Read the article or watch the video and if you don’t understand everything the first time through, no problem! It’s not about grasping all the details the first time; it’s about making the effort to learn more. You can always re-read, look up terms you don’t know, or ask a professional. 

Another idea, pick a favorite finance app, social media site or blog (like mine), website, magazine, or even look for broadcasts on your cable package dealing with personal finance. Find what resonates with you, in a format that you like, with content that is manageable and that you enjoy. Approach the content in small doses so you don’t get overwhelmed.


To recap: take the first step and decided to learn more, make it personal, take it slow, and start with a topic of interest to you. Commit to learning one new concept at a time and don’t overload yourself; pick an area that is interesting and applicable to you; use technology if that helps, or go old-school and find a magazine, book or newspaper. Put the personal back in personal finance and make it enjoyable.  Once you do, you’ll be on the road to establishing and maintaining savvy financial habits.

Once you get started, make it a habit. You can apply this new skill beyond National Financial Literacy Month and make it a year-round activity. This will really help you build your financial literacy savvy and put you on the path to establishing and maintaining healthy financial habits.

Remember, you can always reach out and ask a professional. As an independent Certified Financial Planner™, I can help you establish and maintain better financial habits. Contact me and let’s get started! #talktometuesday #education #Hireaplanner #FinancialLiteracyMonth #NationalFinancialLiteracyMonth #financialsavvy

FREE Resources for National Financial Literacy Month

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Yesterday was Tax Day so I hope everyone who hasn’t filed for an extension managed to file on time. Now that we have our taxes out of the way, here are a few FREE resources for National Financial Literacy Month that you can use to learn more about personal financial planning. These links are provided solely for educational purposes and I recommend no source over another. If the link is broken, please search by name in your browser. If that doesn’t work, contact me and let’s talk.

For financial terms and concepts, I find Investopedia (https://www.investopedia.com/dictionary/) to be a great source. You can search terms, concepts, get articles and sign-up for email customized to your area of interest.

Expecting a new baby? Want to find out how much it will cost you? Try BabyCenter.com (https://www.babycenter.com/) for all things baby. Specifically, the site offers a First-Year Baby Costs Calculator that will help you budget for your new baby. You can calculate the cost of items such as breastfeeding for free, childcare, and diapers vs. disposable diaper service vs. cloth diapers you wash yourself! Cloth is the cheapest and can be the greenest way to go, but will you have the time?

Do you suspect elder abuse? If so, the Administration on Ageing (https://aoa.acl.gov/Index.aspx) has lots of information for you and it’s also free. There is a locator that you can use if you suspect elder abuse. If you do, please use the locator to find out who to notify.

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What about saving for college? Check out SavingForCollege.com (http://www.savingforcollege.com/). The site is geared specifically to 529 plans, but it has lots of tools, articles, and support if you want to learn about college costs, 529 plans, and other college funding issues.

Need help saving? America Saves (https://americasaves.org/) has 54 Ways to Save Money to help you out. They also have lots of tips and strategies to get you started and to involve the kids in your life.

The above sources are just a light sampling of personal financial sites on the Internet that you can use to boost your financial literacy. For every financial aspect of your life, there are dozens of websites that provide information. As expected, some sites are better than others and most will provide only general information and may not answer your specific question. 

When you need more in-depth information and personal service, reach out to me. As an independent Certified Financial Planner™ I can help you establish and maintain better financial habits. Contact me and let’s get started! #talktometuesday #education #Hireaplanner #FinancialLiteracyMonth #NationalFinancialLiteracyMonth #callme

What are RMDs and Why Should I Care?


For those of you who just read my quarterly newsletter, this post will be a bit of rehash. If you don’t receive my quarterly newsletter, you can sign-up here! For National Financial Literacy Month, I’m going to cover Required Minimum Distributions (RMDs) and why you should care about RMDs.

So, what is an RMD. The simplest definition is that it is an amount of money that the owner of a traditional IRA, SEP IRA, or SIMPLE IRA account, and qualified plan participants (think 401(k), 403(b), and 457 plans), must begin withdrawing from their retirement account by April 1 following the year in which they reach age 70 1/2. Got that? To complicate matters, some qualified plan participants may be able to delay taking their RMD if they are still working and older than 70 1/2 but you really must read your plan documents carefully. Many people only think of RMDs in relation to their IRA, but RMDs can be much more complicated. If not handled properly, they can also be very costly and that is why you should care. Let's take a closer look at RMDs.


When do RMDs begin? As mentioned, once you reach age 70 1/2 RMD rules require that you take a distribution from retirement accounts that are covered by these rules by April 1 following the year in which you turned 70 1/2. Remember, there are multiple types of accounts that are covered by the RMD rules (IRA accounts, qualified 401(k), 403(b), and 457 plans) and in some cases, you can aggregate account types, but not in all cases.

Another wrinkle to keep in mind, a Roth IRA does not have any RMD requirement. However, a Roth 401(k) does have an RMD requirement if the funds are still in your Roth 401(k) account! See, it starts to get confusing. Further complicating the RMD rules, you cannot pull a single distribution from one account type (say, an IRA) and have it cover all account types (for example, if you also had a 403(b) account). Distributions need to come from each account type if they cannot be aggregated.

This is important and you should care because if you miss an RMD, the fine is 50% of the missed RMD amount. This is a very steep penalty and could affect your annual spending plan. Let's look at an example and assume you have the following:

Traditional IRA $500,000

Self-directed IRA $50,000

Roth IRA $85,000

401(k) $350,000

403(b) $125,000

In our example, we will use round numbers for the sake of simplicity. In reality, to calculate your RMD you use what is called a distribution factor based on age which ranges from 27.4% down to 1.9%. We are using a round 4% only as an example. Pretend you are age 74, and your RMD withdrawal rate is an even 4% (for simplified math purposes only, NOT your real rate). You would need a total RMD of $41,000 from the above accounts.  That would be made up of $20,000 from the IRA, $2,000 from the self-directed IRA, $14,000 from the 401(k), and $5,000 from your 403(b). Further assume that for simplicity you ask your IRA administrator to send you a check for $41,000 thinking you have satisfied your total RMDs for the year for all accounts. You would be subject to a fine of $9,500 (plus any additional penalties and interest) for not taking the necessary RMD from your 401(k) and your 403(b). Ouch! Remember, your penalty is 50% of the RMD distribution that should have been taken from each required account. The check from the administrator would have satisfied both your IRA and self-directed IRA distribution because those two accounts can be aggregated so it doesn't matter which account the distribution comes from. The overage amount of the check, $19,000, would not satisfy the RMD for the 401(k) and 403(b) amounts, hence the $9,500 penalty. There is no required distribution from the Roth IRA. Remember, however, that Roth 401(k) plans are subject to penalties if an RMD is missed. This is especially harsh because Roth distributions are not taxable (if meeting all other Roth requirements for tax free distributions).

When it comes to RMD rules, don't wing it, don't ask your cousin, and don't trust everything you hear. Get sound advice and be sure you are pulling the correct RMD amount from the correct account. A 50% penalty for an overlooked distribution is a terrible thing!

As an independent Certified Financial Planner™, I can help you with your RMDs. Contact me and let’s get started. #talktometuesday #getstarted #HowIcanHelpYou #GetHelp #Hireaplanner #RMD #RMDs #IRS #CFPPro #savemoney #penalty #financialliteracymonth #financialliteracy

It’s National Financial Literacy Month!

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For personal finance geeks like me, this is an exciting time of year. April is Financial Literacy Month! If you are not quite sure what that is, you are not alone. Financial Literacy Month launched in 2004 as National Financial Literacy Month. According to Wikipedia, the US Senate passed Resolution 316 to officially recognize April as National Financial Literacy Month with the goal of helping Americans establish and maintain healthy financial habits.  It all dates back to 2000 and The National Endowment for Financial Education which originally envisioned a youth financial literacy day. That idea grew and by 2004, April became known as National Financial Literacy Month in the US. Our neighbor, Canada, recognizes Financial Literacy Month in November.


Mention anything finance related and most peoples’ eyes glaze over! Finance is a wide-ranging topic area with many specialties and at times can require a focus on rather dry, intense details.  For personal finance, it doesn’t need to be painful or boring. We all have our strengths and weaknesses when it comes to personal finance. Maybe you are an expert investor, but not so good at budgeting. National Financial Literacy Month is the perfect time to challenge yourself to learn a new topic area.

Over this month, I’ll post more about financial literacy and personal finance topics. For now, you can read more about personal finance on my blog.  For additional information and tools to help you get started, check out the nonprofit work at FinancialLiteracyMonth.com and get started. 

You can also ask me your questions. As an independent Certified Financial Planner™, I can help you establish and maintain better financial habits. Contact me and let’s get started! #talktometuesday #education #Hireaplanner #FinancialLiteracyMonth

Is Buying a Home Right for You?


We’ve been pitched on the American Dream for decades – buying a home. Buying a home may not be in the cards for everyone. If you are one of those people, don’t stress over it. Buying a home can be a wonderful feeling, possibly a great investment, and even make you sleep better at night. It can also have the opposite affect for many people.

Buying a home can have multiple effects on your cash flow. To buy a home, you generally need to have a substantial down payment and a really good credit score to qualify for favorable loan terms. If you have both, buying a home could put you in a position where you are paying the same or less than you were paying in rent. The result, however, may mean that you have severely drained your cash savings. This is particularly true if you live in an area with very high housing costs like the San Francisco Bay Area, Seattle, or New York City. Conversely, if you live in an area with affordable rent, your home mortgage may end up costing you more per month than what you pay in rent.


Renters generally have a fixed monthly rent, may be responsible for utilities, and likely have renter’s insurance. These are a renter’s primary fixed costs and planning your monthly expenses is rather predictable and it’s easy to project your annual budget. With a home, you have your mortgage, real estate taxes, homeowner’s insurance, and you are responsible for maintenance. If you live in a cold climate and your HVAC system breaks, you are on the hook for paying to have it fixed. This is especially true if your home is older and not covered by any type of warranty. Keep in mind that your homeowner’s insurance doesn’t cover systems and appliances breaking down.

So, what should you do? How do you decide? First, is to do a self-assessment and see if you might be a candidate for home ownership. You want to primarily consider your overall cash flow and debt picture and make sure you are ready to buy. If you pay your bills in full each month, don’t carry credit card balances, have a strong, stable income and potential earnings ability coupled with the desire to put down roots in your community and enough cash to comfortably close on the home and still have a safety cushion, you are likely a good candidate.

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If, however, you are not wanting to stay in your community, plan to move within five years, have a shaky job outlook, and are saddled with more debt than income, or you simply don’t want to be responsible for your own home maintenance, home ownership may not be for you. It’s not for everyone and if you are happier being a renter and sleep better at nigh not being responsible for the care, maintenance, and cost of home, be happy and resolve to rent.

Positive aspects of home ownership can be a sense of security, rising equity, and fixed monthly expenses in a rising cost of living area. Renting, may afford the same aspects (minus building equity) if you live in an area with low-cost housing. Buying into the American Dream is a very individual experience for each person. Take the time to determine if it’s really for you.

As an independent Certified Financial Planner™, I can help you plan for a new home purchase and decide if it fits into your goals.Contact me and let’s talk! #talktometuesday #rentvsbuy #Hireaplanner #tax #realestate #stressfree #homebuyer #savings #equity

Do Your Homework, Buy Quality When You Shop


Shopping can be a lot of fun. No matter what you are shopping for, we all are influenced by our past experiences, marketing, and legacy advertising. What is legacy advertising? Think of any brand name that you have heard and seen since your personal day one on this planet. For many of us it’s the two big soda companies, a few domestic car producers, and a couple of blue jean manufacturers. You already know their names and iconic brand logos without me telling you.

When it comes to the big purchases, like a car, we are influenced whether we admit it or not. But there are a few things you can do when you need to make a big purchase.

First of all, slow down… take some time to really think about whether you truly need the item. If the answer turns out to be yes, start your research. Jump online, read reviews, talk to friends and family who have purchased the same item. Share with others what you are thinking of buying and elicit their feedback. Be open to hearing divergent opinions and experiences. You can usually tell if the comments are just grumbling or if a true complaint pattern starts to develop from person to person. Sometimes, a negative comment turns out to be more of a personal disgruntlement than an actual fault of the product. But if you keep hearing “it broke on the fifth use” it’s not disgruntlement.

Consider not buying brand new. Great bargains can be had on high-end items if you know the item, it’s history, and its value in the resale market. Cars, boats, RVs, and athletic equipment come to mind. Sometimes people buy too early or change their mind about wanting the item and they put it up for sale.


When I moved to Oakland, I realized I had a desire for a car. I was influenced by marketing from Volkswagen, Audi, and Volvo. I started narrowing the choices down and reading what I could about those cars. I also asked people who owned those cars if they were happy with their car. Surprise! Most people are. However, there was the occasional complaint and I made a mental list of these complaints. I also test drove a few of the options to see if I liked them. I have always had a fondness for Volvo and in the end, I bought a slightly used, two-year-old Volvo that a woman was selling due to a divorce. That was in 2006 and I am still driving that car to this day – and I am happy with it.

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Go to trade shows before making a big purchase. See what all is really available in the category. Spa, RV, auto, and boat shows almost always have new and slightly used models. Talking with dealer reps may at times garner you a personal discount you can use after the show.

Look at the annual calendar. Watch for model cutoffs such as 2019 models being discounted at year-end to make room for new 2020 models. Consider shopping in late December or early January when stores are desperate to clear merchandise and old models.

Slow down, do your research, share what you want with others, and keep an eye on the annual flow of merchandise and you can acquire quality items at a good price. For bigger items such as leases or real estate, let’s talk. As an independent Certified Financial Planner™, I can help you. Contact me and let’s get started. #talktometuesday #getstarted #HowIcanHelpYou #GetHelp #Hireaplanner #CFPPro #savemoney #buy #shop #quality