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How to Make the Most of Your First Job

How to Make the Most of Your First Job

So you’ve just started your first job. Congratulations!

Whether you’re a highschool student working a cash register or a fresh-out-of-college graduate who just landed a cubicle, a first job often comes with a steep learning curve. But don’t let that weigh you down! This is your once in a lifetime opportunity to start your financial journey strong and develop skills that will last you throughout your career.

Here are two simple steps you can take to make the most of your first job.

Start saving.
A first paycheck is a magical thing. It makes you feel like the hard work has finally paid off and you’re a real adult. You might just become unstoppable now that you’ve got a regular income!

But that empowerment will be fleeting if you spend everything you earn.

It’s absolutely critical that you begin saving money the moment your first paycheck arrives. This practice will go far in establishing healthy money habits that can last a lifetime. Plus, the sooner you start saving, the more time your money has to grow via compound interest. What seems like a pittance today can grow into the foundation of your future wealth if you steward it properly!

Evaluate your performance.
There’s much that you can learn about yourself by studying your job performance. You’ll get an idea of strengths that you can leverage and weaknesses that you need to work on.

But most importantly, you might discover moments when you’re “in the zone”. You’ll know what that means when you feel it. Time slows down (or speeds up), you’re totally focused on the task at hand, and you’re having fun.

That feeling is like a compass. It helps point you in the direction of what you’re supposed to do with your life. Do you get in the zone when you’re working on a certain task? With a group of people? Helping others succeed? Pay close attention to when you’re feeling energized at work and delivering quality results… and when you’re not!

Above all, keep an open mind. Your first job might introduce a passion you’ll pursue for the rest of your life… or it might not. And that’s okay! Whatever it is and wherever it leads, be sure to save as much as you can and to pay attention to what you like. You’ll be better positioned both financially and personally to pursue your dreams when the time comes to make your next move!



When Should You Retire?

When Should You Retire?

Have you ever thought about when you want to retire?

You’ve probably daydreamed about what you want to do when you no longer have to withstand the 9-to-5 routine. But do you know when you want retirement to become a reality?

The average retirement age for people in the US is about 63. However, there’s a large group of people who continue to work past 65.¹ Two motivations that could be contributing to this situation are:

  • They choose to work but don’t have to.
  • They have no choice but to keep working.

It’s apparent that the first option might be preferable to the latter – even if you love what you do.

Here’s why: having the choice is better than having no choice at all.
Imagine that as you approach the time when you want to retire that you love your job and experience a lot of satisfaction in what you do. But there’s no option for you to stop even if you wanted to because of bills or obligations to yourself or your family.

As you approach retirement age – whatever that may be – there could be other things in your life that matter to you that come into conflict with the job you love. Some of these “other things” may include (but aren’t limited to) spending time with family, volunteering at an organization you’re passionate about, traveling the world, etc. Except for a lucky few, most can’t both traveling around the world AND work the job they love. That’s when having the resources to choose comes in handy.

It’s important to have a strategy to reach your retirement goals, whether it’s retiring at age 65 or earlier. Having a plan in place doesn’t mean you absolutely have to retire. But at least you’ll have the flexibility to do so!


¹ “Average Retirement Age In The United States,” Dana Anspach, The Balance, Jul 31, 2020, http://bit.ly/2nW9AWJ.


3 Ways to Teach Your Children How to Save

3 Ways to Teach Your Children How to Save

A study discovered that most children have established their money habits by age 7.¹

Before they might know what a 401(k) or mortgage even are, their financial future is already starting to take shape. It’s never too early to teach your kids the wisdom of budgeting, limiting their spending, and paying themselves first. So the sooner you can instill those lessons, the deeper they’ll sink in!

Fortunately, teaching your kids about saving is quite simple. Here are two common-sense strategies that can help you instill financial wisdom in your children from the moment they can tell a dollar from a dime!

Give your child an allowance
The easiest way for your child to learn how money works is actually for them to have money. If it’s within your budget, set up a system for your child to earn an allowance. The more closely it relates to their work, the better. Set up a list of family chores that are mandatory, and then come up with some jobs and projects around the house that pay different amounts.

What does this have to do with saving? The simple fact is that spending money you receive as a gift can feel totally different than spending money that you earn. Teaching your children the connection between work and money instills a sense of the value of their time and that spending isn’t something to be taken lightly!

Teach your child how to budget
Budgeting is one of the most essential life skills your child will ever learn. And there’s no better time for them to start learning the difference between saving and spending than now! The same study that revealed children solidify their spending habits at age 7 also suggested they can grasp basic financial concepts by age 3!

So when your kid earns that first 5 dollar bill for working in the yard, help them figure out what to do with it! Encourage them to set aside a portion of what they earn in a place where it will grow via compound interest. Explain that the longer their money compounds, the more potential it has to grow! If they’re natural spenders, help them determine how long it will take them to save up enough to buy the new toy or game they want and that it’s worth the wait.

Start saving for yourself
Remember this–the most important lessons you teach your children are unconscious. Your kids are smart. They watch everything you do. Relentlessly enforce spending limits on your kids but splurge on a vacation or new car? They’ll notice. That’s why one of the most critical means of teaching your kids how to save is to establish a savings strategy yourself. When you make and review your monthly budget, invite the kids to join! When they ask why you haven’t gone on vacation abroad for a while, calmly inform them that it’s not in the family budget right now. Model wise financial decision making, and your children will be far more receptive to learning how money works for themselves!

The time to start teaching your kids how to save is today. Whether they’re 2, 8, or 18, offer them opportunities to work so they can earn some money and give them the knowledge and resources they need to use it wisely. And the sooner your kids discover concepts like the power of compound interest and the time value of money, the more potential they have to transform what they earn into a foundation for future wealth.

“The 5 Most Important Money Lessons To Teach Your Kids,” Laura Shin, Forbes, Oct 15, 2013, https://www.forbes.com/sites/laurashin/2013/10/15/the-5-most-important-money-lessons-to-teach-your-kids/?sh=2c01a4956826


Common Financial Potholes

Common Financial Potholes

The journey to financial independence can feel a bit like driving around with your entire retirement fund stashed in the open-air bed of a pickup truck.

Every dollar bill is at the mercy of the elements. Think of an unforeseen medical emergency as a pop-up windstorm that whips a few thousand dollars out of the truck bed. And that time your refrigerator gave out on you? That’s swerving to avoid a landslide as it tumbles down the mountain. There goes another $1,000.

Emergencies like a case of appendicitis or suddenly needing a place to store your groceries usually arrive unannounced and can’t always be avoided. But there are a few scenarios you can bypass, especially when you know they’re coming.

These scenarios are the potholes on the road to financial independence. When you’re driving along and see a particularly nasty pothole through your windshield, it just makes sense to avoid it.

Here are some common potholes to avoid on your financial journey.

Excessive or Frivolous Spending
A job loss or a sudden, large expense can change your cash flow quickly, making you wish you still had some of the money you spent on… well, what did you spend it on, anyway? That’s exactly the trouble. We often spend on small indulgences without calculating how much those indulgences cost when they’re added up. Unless it’s an emergency, big expenses can be easier to control. It’s the small expenses that can cost the most.

Recurring Payments
Somewhere along the line, businesses started charging monthly subscriptions or membership fees for their products or service. These can be useful. You might not want to shell out $2,000 all at once for home gym equipment, but spending $40/month at your local gym fits in your budget. However, unused subscriptions and memberships create their own credit potholes. If money is tight or you’re prioritizing your spending, take a look at your subscriptions and memberships. Cancel the ones that you’re not using or enjoying.

New Cars
Most people love the smell of a new car, particularly if it’s a car they own. Ownership is strange in regard to cars, however. In most cases, the bank holds the title until the car is paid off. In the interim, the car has depreciated by 20% in the first year and by nearly 60% after 5 years.¹

What often happens is that we trade the car after a few years in exchange for something that has that new car smell – and we’ve never seen the title for the first car. We never owned it outright. In this chain of transactions, each car has taxes and registration fees, interest is paid on a depreciating asset, and car dealers are making money on both sides of the trade when we bring in our old car to exchange for a new one.

Unless you have a business reason to have the latest model, it’s less expensive to stop trading cars. Think of your no-longer-new car as a great deal on a used car – and once it’s paid off, there’s more money to put each month towards your retirement.

To sum up, you may already have the best shocks on your financial vehicle (i.e., a well-tailored financial strategy), but slamming into unnecessary potholes could damage what you’ve already built. Don’t damage your potential to go further for longer – avoid those common financial potholes.


¹ “How car depreciation affects your vehicle’s value,” Dana Dratch, Credit Karama, https://www.creditkarma.com/auto/i/how-car-depreciation-affects-value


The Most Important Rule For Buying Life Insurance

The Most Important Rule For Buying Life Insurance

Your life insurance coverage should be worth roughly ten times your annual income.

That’s not as crazy of a number as it might appear. Your income funds your family’s lifestyle and fuels their dreams. It’s how you pay for the house, the car, their education, and all the big and little things that make life run.

So what would happen if your income were to suddenly stop if you became ill or were to pass away?

Could your family afford to stay in the neighborhood? Would a child have to compromise their education? Would your spouse have to get an additional job to cover the daily costs of living?

Life insurance helps answer those questions in the event of your income disappearing.

So why buy a policy ten times your annual income?

First, it can act as a buffer while your family grieves and figures out next steps. A proper life insurance death benefit can allow your family to cover final expenses while they decide how to move forward.

Second, it can help your family pay off remaining debts and start funding future opportunities. This reduces the financial burden your loved ones will face in your absence.

Obviously, there are exceptions to this rule. A stay-at-home parent provides services and care that would be costly to replace and should be covered with that in mind. Families with medical concerns might need to consider a policy worth more than ten times their annual income.

But in general, a life insurance policy for ten times your income will help cover the major expenses your family will face.

Want a more precise estimate on how much life insurance you and your family need? Contact a financial professional. They can offer insights into how much coverage your specific situation calls for!


This article is for informational purposes only and is not intended to promote any certain products, plans, or strategies that may be available to you. Before purchasing a life insurance policy, seek the advice of a qualified and licensed financial professional, accountant, and/or tax expert to discuss your options.


Flow And The Secret Of Productivity

Flow And The Secret Of Productivity

Peak human performance.

Operating at your full potential consistently sounds too good to be true. We all want to accomplish more at our jobs and around the house. But a million little distractions always seem to throw us off course. Sure, we all have flashes of inspiration, but many of us settle for a fraction of our true capabilities.

But there’s a better way.

Researchers have discovered that high productivity doesn’t have to be limited to short bursts. There’s actually a very specific state of mind that results in stunning levels of output that’s triggered by certain psychological factors. It’s called flow, and understanding how it works may change your life.

What is flow?
Technically speaking, “Flow is a cognitive state where one is completely immersed in an activity… It involves intense focus, creative engagement, and the loss of awareness of the self.”¹ Think of it like this: what’s your favorite quarterback thinking about when he’s making a game winning play? Almost nothing else besides what he’s doing in the moment. That state of total concentration on the task at hand is what defines flow. Other sensations follow. Decisions seem to make themselves. You lose awareness of what’s going on around you. Time either seems to fly by or you see things in slow motion. And, most importantly, you feel awesome. You’re “in the zone.”

Achieving flow
You’ve almost certainly achieved this flow state at least once in your life. But it probably doesn’t seem replicable. You were just on during that highschool football championship game or playing that local show with your buddies or giving that presentation. Fortunately, research hasn’t just described flow; it’s discovered a few factors that contribute to achieving peak performance.

The first flow key is to establish goals. Your brain loves objectives. It loves feeling like it’s accomplishing things. Having a clear outcome in mind will help you tune out the distractions that don’t matter and hone in on what does. Identify your desired goal, outline in detail how you’ll accomplish it, and then proceed to the second flow key.

The second flow key is the balance between challenge and boredom. Very often, facing a difficult task doesn’t naturally induce deep focus. It actually can make us feel anxious, scared, and avoidant. However, a mundane and simple activity, like washing dishes, doesn’t require the brainpower to trigger intense concentration. Flow lives in the happy medium between those extremes of crushing anxiety and mind-melting boredom. You have to have the confidence that you can actually crush the challenge at hand, but also not find it too easy or boring. Dial in your ideal difficulty level before you start a project. Expect more from your mundane responsibilities and get help for the daunting ones. Raise the stakes for your performance but make sure you don’t drown in the process!

The third flow key is immediate feedback. Let’s say you’ve hired a coach to help you master a skill. Would you prefer them to write up an annual review on your progress or give you tips, critiques, and advice as often as possible? Think about all the bad habits and practices you would develop without their regular oversight. You might discover you’ve been doing things wrong for a whole year if you’re only getting an annual checkup! Instant feedback allows you to constantly refine your process and execution while also setting up micro goals for you to accomplish. It’s a simple way to add a dash of challenge to your daily routine that locks you in and helps you achieve peak performance. Seek out frequent feedback. Ask your boss or co-workers or coach to give you critiques as often as possible. That constant stream of input will either make you feel good about what you’ve accomplished or give you new obstacles to overcome!

Achieving this state of peak performance isn’t always easy. There’s a cycle to entering flow that includes a difficult first phase. It’s hard work for our brain to enter into total focus and concentration. This first barrier is where most of us quit because intense concentration doesn’t feel great at first. But overcoming that initial resistance can open up a whole new world of productivity and performance. Use the three flow keys, push past the opening waves of discomfort and get into your zone!


¹ “Flow,” Psychology Today, accessed Sept. 24, 2020, https://www.psychologytoday.com/us/basics/flow


Bouncing Back From A Pandemic?

Bouncing Back From A Pandemic?

There is no denying that COVID-19 has changed what can be considered “normal”.

We didn’t think how fragile chatting around the water cooler at work, having a meal in your favorite restaurant whenever you wanted, or going to the movies on the weekend really were. But months of shutdowns, social distancing, and required mask-wearing have made us feel it. Life is definitely different from what it was in February 2020.

And that’s where your opportunity lies.

Despite the negative ramifications, COVID-19 has created the chance you’ve been waiting for to live life on your own terms. Here’s how you bounce back from the pandemic stronger than ever and poised to pursue your dreams.

Decide Where You Want To Live
You’ve seen the headlines; people are fleeing cities like New York and Los Angeles for suburbs or even totally new states¹⁺². Those trends aren’t necessarily new, but there’s no doubt that COVID-19 has accelerated the process. And it makes sense when you think about it. Cities are convenient. People are willing to live there and often pay absurd rent because it places them near job opportunities. But months of lockdowns and surging unemployment have either shattered traditional career dreams or shown workers they can function anywhere with an internet connection. Why live somewhere expensive that you don’t like with no jobs?

But the mass urban exodus is also the opportunity of a lifetime. First, remember that you can work anywhere in the world that has an internet connection. You’re no longer tied to the eastern seaboard or California if you want a high paying job. Second, those ex-city dwellers have gotten used to services and amenities. Meeting those demands in a smaller city where property can be cheaper and taxes can be lower has huge upside potential. All you have to do is identify where you want to live and determine the opportunity level. Love mountains and fast internet? Check out Chattanooga, the “Gig City” of the south! Durham, North Carolina has a low population density paired with a huge demand for college degrees.³ And Iowa, once thought to be a cornfield disguised as a state, has a booming economy and awesome culture.⁴ The point isn’t that you should move to a remote part of the midwest and flee civilization (though that’s always an option). It’s that opportunity is more accessible than ever from anywhere in the country and is only limited by your imagination and courage. So why not investigate that small town or mid-sized city you may have never considered before? Now is the time to explore your options!

Build A Business
You’ve always wanted to build a business. And the COVID-19 pandemic has created the perfect opportunity to become an entrepreneur. Before you think it, let me just say—I know it sounds crazy. Starting a business is risky in the best of times, much less after economic shutdowns and a massive market decline. Plus, the pandemic has shot our collective anxiety levels through the roof!⁵ It can feel like there are uncountable roadblocks between you and pursuing your dream of being a business owner.

That’s why you have to be strategic about what type of business you start. Remember, the key to making money is problem solving. The larger the problem you solve, the more money you can potentially make. You probably won’t have to think too long and hard to come up with a list of ways you can help people for a dollar. Real estate agents, for instance, are helping families relocate outside the big city. Food delivery services are helping people stranded at home satisfy their pizza cravings. Do some research into a problem you’re passionate about solving and try some brainstorming for solutions. And because of the economic climate, you might be one of the few people taking action to fix things instead of living in fear!

In short, there’s opportunity hidden in this pandemic. You can bounce back from this season of COVID-19 in a place you love with a business you’re passionate about. If you’re interested in starting a business, let me know! We can talk about some big problems that are facing Americans and how you can help solve them.

¹ Matthew Haag, “New Yorkers Are Fleeing to the Suburbs: ‘The Demand Is Insane,’” The New York Times, Aug 30, 2020, https://www.nytimes.com/2020/08/30/nyregion/nyc-suburbs-housing-demand.html

² Sally Lockwood, “‘The city has become unbearable’: Why are so many people leaving Los Angeles?,” Sky News, Sept 14, 2020, https://news.sky.com/story/the-city-has-become-unbearable-why-are-so-many-people-leaving-los-angeles-12070183

³ Madison Hoff, “20 US cities with great jobs and smaller crowds that could bounce back quickly after the coronavirus pandemic,” Business Insider, May 16, 2020, https://www.businessinsider.com/cities-that-could-bounce-back-from-coronavirus-2020-5

⁴ Winona Dimeo-Ediger, “Why is everyone moving back to Iowa?,” MarketWatch, March 19, 2019, https://www.marketwatch.com/story/why-is-everyone-moving-back-to-iowa-2019-03-18

⁵ Alexa Lardieri, “Coronavirus Pandemic Causing Anxiety, Depression in Americans, CDC Finds,” U.S. News & World Report, Aug 13, 2020, https://www.usnews.com/news/health-news/articles/2020-08-13/coronavirus-pandemic-causing-anxiety-depression-in-americans-cdc-finds


Who Needs Life Insurance?

Who Needs Life Insurance?

Life insurance is important… or so you’ve been told.

But do you really need it? And how can you know? Let’s take a look at who does and doesn’t need the family and legacy protecting power of life insurance and some specific examples of both.

Protecting your dependants
Is there anyone in your life who would suffer financially if your income were to vanish? If so, then you have dependents. And anyone with financial dependents should buy life insurance. Those are the people you’re aiming to protect with a life insurance policy.

On the other hand, if you live alone, aren’t helping anyone pay bills, and no one relies on you financially to pursue their dreams, then you still might need coverage. Let’s look at some specific examples below.

Young singles
Let’s say you’ve just graduated from college, you’ve started your first job, and you’re living in a new city. Your parents don’t need you to help support them, and you’re on your own financially. Should you get life insurance? If you have serious amounts of student or credit card debt that would get moved to your parents in the event of your passing, then it’s a consideration. You also might think about if you have saved enough in emergency funds to cover potential funeral expenses. Now would also potentially be a better time to buy a policy early while rates are low, especially if you’re considering starting a family in the near future.

Married without children
What if your family is just you and your spouse? Do either of you need life insurance? Remember, your goal is to protect the people who depend on your income. You and your spouse have built a life together that’s probably supported by both of your incomes. A life insurance policy could protect your loved one’s lifestyle if something were to happen to you. It would also help them meet lingering financial obligations like car payments, credit card debt, and a mortgage, even if they still have their income.

Single or married parents
Anyone with children must consider life insurance. No one relies on your income quite like your kids. It’s what clothes them and feeds them. Later on, it can empower them to pursue their educational dreams. Life insurance can help give you peace of mind that all of those needs will be protected. Even a stay-at-home parent should consider a policy. They often provide for needs like childcare and education that would be costly to replace. Life insurance is an essential line of defense for your family’s dreams and lifestyle.

Business owners
No one wants to think about what would happen to their business without them. But entrepreneurs and small business owners can use life insurance to protect their hard work. A policy can help protect your family if you took out loans to start your business and are still paying down debt. More importantly, it can help offset the losses if your family can’t operate the business without you and has to sell in poor market conditions.

Not everyone needs life insurance right now. But it’s a vital line of defense for the people you care about most and should be on everyone’s radar. The need might not be as urgent for a young, debt-free single person, but it’s still worth it to start making plans to protect your future family. Contact a financial professional today to begin the process of preparing!


Tips For New Graduates

Tips For New Graduates

Graduating from college is a huge transition.

It’s the end of nearly two decades of classrooms, tests, essays, late nights, and early mornings, but it’s the start of your full-fledged independence.

That move isn’t always easy. We face a huge number of unknowns when we leave the hallowed halls of the university and enter the dog-eat-dog “real world.” What kind of job will I end up with? Where will I live? What will my coworkers be like? How well will I adjust to a totally new routine? Those are important questions that don’t always have clear answers. However, there are some things you can do that will help navigate your post-graduation world. These aren’t magic antidotes, just helpful steps that might bring some stability and order to your experience!

Create a vision
Having a career vision is essential. It can provide structure and a sense of purpose. Decisions can be weighed by how much they move you towards realizing your goals, which can help give you clarity when making tough calls.

Keep your vision as specific and precise as possible. That dream of working at a prestigious law firm and wearing designer suits every day? Take it and drill down on the details. What kind of law do you want to practice? What’s your dream city? How high up on the ladder do you want to climb? Be honest with yourself about what you really want.

It’s also important to develop a time frame for your goals. Think about a 5 to 10 year time frame and see what you think is realistic!

Map out your path
Now it’s time to map out how you’ll make your vision a reality. What needs to happen for you to get that promotion or end up in the city you want to experience?

The first step is research. Your dream position might require a master’s degree or special licensing that you can’t afford just yet. Maybe you need some time in the field before moving up. Break down exactly what needs to happen, and when, for you to achieve your goal. Sometimes it’s best to start with the goal itself and deconstruct it into smaller and smaller pieces that are easier to manage. Start checking off those little steps until your goal looks more and more achievable!

It’s also a good idea to find a mentor to guide you. Ideally this would be someone who’s undertaken this journey themselves! They’ll have insights into roadblocks that you’ll face and little tips that can make all the difference.

Maximize positivity
No plan is perfect. We’ll always overlook a detail, not factor in a risk, or overestimate our ability to handle something. It’s easy to get discouraged when those things go wrong. It can make your dream feel unattainable, and you might start to doubt yourself. But rolling with those punches and not getting discouraged by setbacks is essential to achieving your goal. Take a step back, assess the situation, learn from your mistakes, and get back to the grind. You might have to adjust your expectations and even re-evaluate your process. That’s fine! Do what you need to do and get back to work once you’ve hammered out the details.

Remember that flexibility is key. Your passion for a certain type of work or field of study might cool off as the years go by. You might find that your goal of becoming an alpha executive conflicts with your goal of being an available parent. Don’t push those hard decisions off until tomorrow. Do some serious soul searching about what matters to you today, make some goals, figure out a process, and don’t let little failures get you down!


Furnish Your Home Without Breaking Your Bank

Furnish Your Home Without Breaking Your Bank

Furnishing your house can be pricey.

One interior decoration blog estimated that decorating a living room from scratch could cost between $14,400 to almost $50,000!(1) The numbers for the dining room, bedrooms, and kitchen are similarly high. Furnishing an apartment averages about $6,000.(2) But is there a better way? How can you save some cash if you’re trying to furnish your home? Here are a few helpful tips to guide your decorating process!

Plan and prioritize
Start by taking stock of what furniture you have that can be used in your new home. Some of it might work in your new home, some of it might not. Try to get an idea of what existing furniture will go where and make note of new items you’ll need.

Arrange your list of new items in order of importance and buy those first. Mattresses for your bedroom? Top of the list. Abstract modern art to hang in your bathroom? Maybe hold off on that until you’ve taken care of the essentials!

Paint
Concerned that your kitchen is a little drab? Worried that your table cloth doesn’t match your dining room? You might be surprised how far a new paint job will get you! It might be a more budget-friendly way to spice up your living situation than tossing all your old furniture out the door, especially if you do it yourself. Things like tables and wooden chairs are all potential candidates for a new coat of paint, as are the walls of your home.

Shop smart
But there’s no doubt that at some point you’ll need to get a new piece of furniture. What then? Cough up and pay a ridiculous price? You might be surprised by the resources available to acquire furniture at a bargain. Local thrift stores can be treasure troves for things like chairs, coffee tables, and bookcases. Craigslist and eBay are also worth investigating, as are estate and garage sales. And you can always scour the curbs for a free sofa if you’re feeling bold!

Furnishing your new house can be fun. It’s a chance to unleash your creativity and make your home a special place. Just make sure you follow these budget-friendly tips before you start indulging!

(1) https://www.kathykuohome.com/blog/budget-breakdown-how-much-does-it-cost-decorate-a-room/

(2) https://medium.com/@ColonialVanLinesInc/how-much-does-the-average-person-spend-on-furniture-8a0a6ba179ca


The Origins of Life Insurance, Part I

The Origins of Life Insurance, Part I

Life insurance hasn’t always existed.

In fact, most people throughout history have had zero outside financial protection in case of an untimely death. So why did life insurance appear? Let’s start by defining what it is.

What is life insurance?
Life insurance is essentially an agreement where people pay a company a premium on a policy that will provide a financial benefit in the case of an untimely death (or if other circumstances occur that are defined in the policy). Let’s say you have a spouse and a few kids. You know that if something were to happen to you it would leave them in a serious financial bind; being down an income could mean moving to a worse neighborhood, serious lifestyle changes, debt, and so on. An appropriate life insurance benefit Life insurance is worth considering if anyone in your life depends on you financially.

Roman soldiers: pioneers of life insurance
So where did the idea of life insurance come from? The first known example of life insurance was in a powerful organization with a high turnover rate: the Roman Army. Burials were culturally significant to Romans but expensive, which was bad news for poor soldiers constantly waging wars across ancient Europe. In response, they started burial clubs. Members of these clubs would cover funeral costs for their fallen comrades. It wasn’t much compared to the complexity of modern life insurance, but it at least provided a basic honor to soldiers and their families in the case of a tragic death.

Coffee Houses and Churches Not much is known about insurance in general after the fall of the Roman Empire. However, another high-risk field sparked its rebirth during Europe’s colonial era in the late 1680s. Merchants, sea captains, and sailors all worked high risk jobs; pirates, storms, and disease were serious threats to shipments and crews. What we think of as insurance was born to protect the pockets of investors in the case of a maritime catastrophe.

The first life insurance company opened in London just a few years later in 1706. The Amicable Society for a Perpetual Assurance Office was founded by William Talbot and required members to pay an annual fee. In 1759, American Presbyterian ministers created an organization to protect families of deceased pastors, with the Episcopalians following suit a few years later.

Something like modern life insurance was beginning to appear. But the next two centuries saw massive economic and social changes that permanently affected the insurance industry. We’ll explore those in part II!


So You’ve Graduated...Now What?

So You’ve Graduated...Now What?

Graduating from college is a big deal.

It represents a transition from student to adult for millions of people. But leaving university and joining the workforce can be intimidating. Looking for a job, paying bills, commuting, and living independently are often uncharted territory for recent grads.

Here are a few tips for fresh graduates trying to get on their feet financially.

Figure out what you want
It’s one thing to leave college with an idea of what career you want to pursue. It’s something else entirely to ask yourself what kind of life you want. It’s one of those big issues that can be difficult even to wrap your head around!

However, it’s something that’s important to grapple with. It will help you answer questions like “What kind of lifestyle do I want to live” and “how much will it cost to do the things I want?” You might even find that you don’t really need some of the things that you thought were necessities, and that happiness comes from places you might not have expected.

Come up with a budget
Let’s say you’ve got a ballpark idea of your financial and lifestyle goals. It’s time to come up with a strategy. There are plenty of resources on starting a budget on this blog and the internet on the whole, but the barebones of budgeting are pretty simple. First, figure out how much you make, how much you have to spend, how much you actually spend, then subtract your total spending from how much you make. Get a positive number? Awesome! Use that leftover cash to start saving for retirement (it’s never too early!) or build up an emergency fund. Negative number? Look for places in your unnecessary spending to cut back and maybe consider a side hustle to make more money.

Looking at your spending habits can be difficult. But owning up to mistakes you might be making and coming up with a solid strategy can be far easier than the agony that spending blindly may bring. That’s why starting a budget is a post-graduation must!

Meet with a financial professional
Find a qualified and licensed financial professional and schedule an appointment. Don’t let the idea of meeting with a professional intimidate you. Afterall, you trust your health, car, and legal representation to properly trained experts. Why wouldn’t you do the same with your financial future?

Being scared of starting a new chapter of life is natural. There are a lot of new experiences and unknowns to deal with that come along with leaving the familiarity of college. But the best way to overcome fear is to face it head on. These tips are a great way to start taking control of your future!

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Now’s the Time for Future Planning

Now’s the Time for Future Planning

What happened to the days of the $10 lawn mowing job or the $7-an-hour babysitting gig every Saturday night?

Not a penny withheld. No taxes to file. No stress about saving a “million dollars” for retirement. As a kid, doing household chores or helping out your friends and neighbors for a little spending money was vastly different from your grown up reality – writing checks for all those bills, paying your taxes, and buying all the things that children seem to need these days, all while trying to save as much as you can for your retirement. When you were a kid, did those concepts feel so far away that they might as well have been camped out on Easter Island?

What happened to the carefree attitude surrounding our finances? It’s simple: we got older. More opportunities. More responsibilities. More choices. As the years go by, finances get more complicated. So knowing where your money is going and whether or not it’s working for you when it gets there is something you need to determine sooner rather than later – even before your source of income switches from mowing lawns and babysitting to your first internship at that marketing firm downtown.

A great way to get a better idea of where your money is going and what it’s doing when it gets there? A financial plan.

A sound strategy for your money is essential, starting as soon as possible is better than waiting, and talking to a financial professional is a solid way to get going. No message in a bottle sent from a more-prepared version of your future self is going to drift your way from Easter Island. But sitting down with me is a great place to start. Contact me any time.


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3 Ways to Give Thanks for Loved Ones

3 Ways to Give Thanks for Loved Ones

Just saying “thanks” without giving a little thanks back tends to lose its charm when we start to lose our first teeth.

When we’re young, it seems like our parents and older siblings are just relieved that we’re learning some manners to offset our little legs swinging wildly off the chair under the dinner table, narrowly missing people’s shins. (Hey, it’s hard to sit still at big family meals when you’re that little!) All the grown up talk about far away jobs or how much you’ve grown wasn’t as stimulating as the tooth that had started to wiggle ever so slightly when you bit into some turkey… But at least you remembered to say thank you when someone passed the cranberry sauce!

As we got older, though, those conversations became easier to participate in as we shared our own stories, watched our extended family grow and mature, and then tried to wrangle our own kids into saying “thank you” when they were given a gift by a relative they hadn’t seen in a year.

The biggest lesson we learn about being thankful as we get older? It’s important to show the people we love how thankful we are for them – not just say it. We learn more about the responsibility we have to take care of the people we are thankful for. And at this time of year, we can give our thanks to them by making sure they are financially prepared if we suddenly aren’t around anymore.

Here are 3 ways you can give thanks for your loved ones:

1. Consider getting life insurance. Replacing lost income, covering funeral expenses, gaining potential tax advantages, having early access to money – these benefits of life insurance will give your loved ones a bit of financial stability and let them know how thankful you were for them. However, many of these benefits can depend on what type of life insurance you have, so taking the time to find the right type and amount of insurance for your particular needs and goals is important. Which leads us to the second way to give thanks…

2. Get the right type and amount of life insurance. Life insurance policies are not “one size fits all,” so investing your energy into this step is a key way to give thanks for your loved ones. Different types of policies have different kinds of coverage, benefits, and uses. Having the right policy with adequate coverage is the key to protecting your loved ones in the event of a traumatic event – not just the loss of life. Adequate life insurance coverage can help keep you and your loved ones afloat in the case of an unexpected disabling injury, or if you’re in need of long term care. Your life with your loved ones isn’t going to be one size fits all, and your life insurance policy won’t be either.

3. List the right beneficiaries on your policy. This question is particularly important if you haven’t looked at or updated your beneficiaries in a while. Why? Because listing the correct beneficiary will help ensure that any insurance payout will get delivered to the them. You may need to review your policy’s beneficiaries if you have recently married or divorced, had kids, or maybe even met with a cousin over the holidays who you’d like to leave a little something to!

If you can’t say that the 3 ways above are how you’re going to give thanks for your loved ones this year, give me a call. I’d like to give my thanks to you by assisting you with a whole new way to say “thank you” – tailored life insurance!


*Neither World Financial Group nor its agents may provide tax or legal advice. Anyone to whom this material is promoted, marketed, or recommended should consult with and rely on their own independent tax and legal advisors regarding their particular situation and the concepts presented herein.

Any guarantees associated with a life insurance policy are subject to the claims paying ability of the issuing insurance company.*

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How to save for a big purchase

How to save for a big purchase

It’s no secret that life is full of surprises. Surprises that can cost money.

Sometimes, a lot of money. They have the potential to throw a monkey wrench into your savings strategy, especially if you have to resort to using credit to get through an emergency. In many households, a budget covers everyday spending, including clothes, eating out, groceries, utilities, electronics, online games, and a myriad of odds and ends we need.

Sometimes, though, there may be something on the horizon that you want to purchase (like that all-inclusive trip to Cancun for your second honeymoon), or something you may need to purchase (like that 10-years-overdue bathroom remodel).

How do you get there if you have a budget for the everyday things you need, you’re setting aside money in your emergency fund, and you’re saving for retirement?

Make a goal
The way to get there is to make a plan. Let’s say you’ve got a teenager who’s going to be driving soon. Maybe you’d like to purchase a new (to him) car for his 16th birthday. You’ve done the math and decided you can put $3,000 towards the best vehicle you can find for the price (at least it will get him to his job and around town, right?). You have 1 year to save but the planning starts now.

There are 52 weeks in a year, which makes the math simple. As an estimate, you’ll need to put aside about $60 per week. (The actual number is $57.69 – $3,000 divided by 52). If you get paid weekly, put this amount aside before you buy that $6 latte or spend the $10 for extra lives in that new phone game. The last thing you want to do is create debt with small things piling up, while you’re trying to save for something bigger.

Make your savings goal realistic
You might surprise yourself by how much you can save when you have a goal in mind. Saving isn’t a magic trick, however, it’s based on discipline and math. There may be goals that seem out of reach – at least in the short-term – so you may have to adjust your goal. Let’s say you decide you want to spend a little more on the car, maybe $4,000, since your son has been working hard and making good grades. You’ve crunched the numbers but all you can really spare is the original $60 per week. You’d need to find only another $17 per week to make the more expensive car happen. If you don’t want to add to your debt, you might need to put that purchase off unless you can find a way to raise more money, like having a garage sale or picking up some overtime hours.

Hide the money from yourself
It might sound silly but it works. Money “saved” in your regular savings or checking account may be in harm’s way. Unless you’re extremely careful, it’s almost guaranteed to disappear – but not like what happens in a magic show, where the magician can always bring the volunteer back. Instead, find a safe place for your savings – a place where it can’t be spent “accidentally”, whether it’s a cookie jar or a special savings account you open specifically to fund your goal.

Pay yourself first
When you get paid, fund your savings account set up for your goal purchase first. After you’ve put this money aside, go ahead and pay some bills and buy yourself that latte if you really want to, although you may have to get by with a small rather than an extra large.

Saving up instead of piling on more credit card debt may be a much less costly way (by avoiding credit card interest) to enjoy the things you want, even if it means you’ll have to wait a bit.


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You Can’t Take It With You

You Can’t Take It With You

A LinkedIn study found that Millennials are likely to change jobs 4 times in their first 10 years out of college.*

That equates to landing a new job roughly every 2.5 years by age 32!

So if you’re feeling the itch to leave your current job and head out for a new adventure in the workforce, the experience you’ve gained along the way will go with you. You may have made some great business connections too, and gotten some fabulous on-the-job-training. All of these things will “travel well” to a new job.

But there’s one thing you can’t take with you: An employer-supplied life insurance policy. While the price is right at “free” for many of these policies, there are several drawbacks that may deter you from relying on them solely for coverage.

1. An employer-provided policy turns in its two weeks notice when you do. Since your employer owns the policy – not you – your coverage will end when you leave that job. And unless you’re walking right into another employment opportunity where you’re offered the same type and amount of coverage, you might experience gaps or a total loss of coverage in an area where you had it before. When you’re not depending on an employer to provide your only life insurance coverage, you can change jobs as often as you please without the worry of the rug being pulled out from under you.

2. The employer policy is touted as ‘one size fits most.’ But it’s not likely that a group policy offered through an employer will be tailored to you and your unique needs. There may be no room for you to chime in and request certain features or a rider you’re interested in. However, when you build your own policy around your individual needs, you can get the right coverage that suits who you are and where you’d like to go on your financial journey.

3. An employer policy may not offer enough to cover your family. What amount of coverage is your employer offering? When you’re first starting out in your career, a $50,000 or even a $25,000 employer-provided policy might sound like a lot. But how far would that benefit really go to protect your family, cover funeral costs, or help with daily expenses if something were to happen to you?

Whether or not your 5-year plan includes 5 different jobs (or 5 entirely unrelated career paths), with a well-tailored policy that you own independent of your employment situation – you have the potential for a little more freedom and security in your financial strategy. And you won’t be starting from square one just because you’re starting a new opportunity.


Source:
Long, Heather. “The new normal: 4 job changes by the time you’re 32.” CNN Money, https://cnnmon.ie/1RRxCfl.

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Handling Debt Efficiently – Until It’s Gone

Handling Debt Efficiently – Until It’s Gone

It’s no secret that making purchases on credit cards will result in paying more for those items over time if you’re paying interest charges from month-to-month.

Despite this well-known fact, credit card debt is at an all-time high, rising another 3% this past year.¹ The average American now owes over $6,300 in credit card debt. For households, the number is much higher, at nearly $16,000 per household.² Add in an average mortgage of over $200,000, plus nearly $25,000 of non-mortgage debt (car loans, college loans, or other loans) and the molehill really is starting to look like a mountain.

The good news? You have the potential to handle your debt efficiently and deal with a molehill-sized molehill instead of a mountain-sized one.

Focus on the easiest target first.
Some types of debt don’t have an easy solution. While it’s possible to sell your home and find more affordable housing, actually following through with this might not be a great option. Selling your home is a huge decision and one that comes with expenses associated with the sale – it’s possible to lose money. Unless you find yourself with a job loss or similar long-term setback, often the best solution to paying down debt is to go after higher interest debt first. Then examine ways to cut your housing costs last.

Freeze your spending (literally, if it helps).
Due to its higher interest rate, credit card debt is usually the first thing to tackle when you decide to start eliminating debt. Let’s be honest, most of us might not even know where that money goes, but our credit card statement is a monthly reminder that it went somewhere. If credit card balances are a problem in your household, the first step is to cut back on your purchases made with credit, or stop paying with credit altogether. Some people cut up their cards to enforce discipline. Ever heard the recommendation to freeze your cards in a block of ice as a visual reminder of your commitment to quit credit? Another thing to do is to remove your card information from online shopping sites to help ensure you don’t make mindless purchases.

Set payment goals.
Paying the minimum amount on your credit card keeps the credit card company happy for 2 reasons. First, they’re happy that you made a payment on time. Second, they’re happy if you’re only paying the minimum because you might never pay off the balance, so they can keep collecting interest indefinitely. Reducing or stopping your spending with credit was the first step. The second step is to pay more than the minimum so that those balances start going down. Examine your budget to see where there’s room to reduce spending further, which will allow you to make higher payments on your credit cards and other types of debt. In most households, an honest look at the bank statement will reveal at least a few ways you might free up some money each month.

Have a sale. To get a jump-start if money is still tight, you might want to turn some unused household items into cash. Having a community yard sale or selling your items online can turn your dust collectors into cash that you can then use toward reducing your balances.

Transfer balances prudently.
Consider balance transfers for small balances with high interest rates that you think you’ll be able to pay off quickly. Transferring that balance to a lower interest or no interest card can save on interest costs, freeing up more money to pay down the balances. The interest rates on balance transfers don’t stay low forever, however – typically for a year or less – so it’s important to make sure you can pay transferred balances off quickly. Also, check if there’s a balance transfer fee. Depending on the fee, moving those funds might not make sense.

Don’t punish yourself.
Getting serious about paying down debt may seem to require draconian measures. But there likely isn’t a need to just stay home eating tuna fish sandwiches with all the lights turned off. Often, all that’s required is an adjustment of old spending habits. If your drive home takes you past a mall where it would be too tempting to “just pick a little something up”, take a different route home. But it’s important to have a small treat occasionally as well. If you’re making progress on your debt, you deserve to reward yourself sometimes. All within your budget, of course!


Sources:
¹ Sullivan, Bob. “State of Credit: 2017.” Experian, 1.11.2018, https://bit.ly/2mrjH58.
² El Issa, Erin. “2017 American Household Credit Card Debt Study.” NerdWallet, 2017, https://nerd.me/2ht7SZg.

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Debit or Credit? What's the difference?

Debit or Credit? What's the difference?

For many people, when purchasing items with a debit card or credit card, the only difference for them may boil down to simply entering a PIN code or scribbling a signature.

But what really is the difference? The answer may be a little complicated, largely due to misnomers and a blending of terms used by the public. Read on to see what the difference actually is.

A clarification of terms
The words credit, debit, and cash seem to be used so loosely by the general public that many people seem confused by what the difference is between them. But in accounting and finance, they have very specific meanings. For our purposes, cash is money that you can spend immediately. It can be cold hard currency of course – bills and coins which you might have in your hand or in your wallet – or cash can refer to the balance in your checking account. This is money that you own, and you can withdraw all of it right now, electronically or physically.

Credit is basically someone’s willingness to accept an IOU from you. Here we will use it as a noun. Buying on credit means the seller trusts the buyer to hand over cash – money which is spendable right now – in the future. Debit, on the other hand, is a verb, and it means to deduct an amount from a cash balance immediately (often a bank account balance). Of course, credit can also be a verb (meaning to add to a cash balance immediately). This mixing of verbs and nouns can make the distinction of the terms in everyday use difficult.

  • Cash is money you can spend right now, electronically or physically.
  • Credit is an agreement to pay cash later.
  • Debit is a verb that means to subtract cash from a balance right away.

When money is due
The major difference between credit and debit cards is the time when cash must be paid. Credit cards, standing in for a promise to pay cash later, allow one to purchase things even if said person has no cash immediately available. For example, if you need to buy some clothes for a new job, you might only have enough cash on hand to purchase one outfit. You may not receive any more cash until you get your first paycheck in two weeks. But you probably wouldn’t want to wear the same outfit every day for two weeks. What can you do?

This is when credit comes in handy: you buy all the outfits you need now, while making a promise to pay the credit card company back in the future. You receive your outfits immediately even though you don’t technically have enough cash yet. You need to complete some work before you receive the money, but the credit card company accepts your IOU in place of cash for the time being.

On the other hand, if you use a debit card to pay for the clothes, the cash will be deducted immediately from your bank account. Remember, the balance of your bank account is cash in financial terms because it is spendable right now. When you enter your PIN code, the bank checks that you have enough money to make the purchase immediately and, if you do, the bank authorizes the transaction. If you need new shoes for your job but don’t have enough money in your bank account, you won’t be able to use a debit card.

Interest rates for using credit cards
Why would anyone ever want to use debit if they could use credit? One reason is budgeting and discipline. However, a stronger reason can be interest: promising to pay later may come at a price, and that price is called interest. Credit card companies do not make these short term loans out of the goodness of their hearts. They do it for profit. If you borrow money for a little while – i.e., you take money and promise to pay it back later – you will have to compensate the bank, seller, or credit card company for that ability. Thus we potentially pay interest with credit cards but not with debit cards.

Why don’t we pay interest on debit cards? Well, because the money is already yours, of course.


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Why you need an insurance review

Why you need an insurance review

Insurance is intended to protect your assets and to help cover certain risks.

Policies may have standardized language, but each insurance policy should be tailored to your needs at the time the policy is written.

A lot can change in a short amount of time – so an annual insurance review is a good habit to develop to help ensure your coverage still addresses your needs.

Life changes, and then changes again, and again
There are some obvious reasons to review your life insurance coverage, like if you’re getting married or having a baby – but there are also some less obvious reasons that may change your coverage requirements, like changing jobs or experiencing a significant change in income.

Here are some of the reasons you might consider adjusting your coverage:

  • You got married
  • You got divorced
  • You started a family
  • Your income changed
  • Your health improved
  • You lost weight or quit smoking
  • You bought a house
  • You paid off your house
  • You started a business
  • You borrowed money
  • You retired

Depending on what has changed, it may be time to increase your coverage, supplement coverage with another policy, change to a different type of policy, or begin to move some money into savings or update your retirement strategy.

Have you updated your beneficiaries?
Did you get married or divorced? Did you start a family? It’s time to update your beneficiaries. Life can change quickly. One thing that can happen is that policyholders may forget to update the beneficiaries for their policies. A beneficiary is the person or persons who will receive the death benefit from your life insurance policy. If there is a life insurance claim, the insurance company must follow the instructions you give when you assign beneficiaries – even if your intent may have been that someone else should be the beneficiary now. Fortunately, this can be remedied.

How long has it been since you first set up a policy? How long has it been since your last insurance review? What has changed in your life since the last time you reviewed your policies?

Your insurance needs have probably changed as well, so now is the time to make sure you have the coverage you need.


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New Year, New (Financial) You!

New Year, New (Financial) You!

The new year is best known for resolutions. The trouble is that many new year’s resolutions don’t survive past the first month or so.

Why is that? You might suspect it’s because we set unrealistic goals or lack the proper motivation.

If you’ve got some financial resolutions you want to stick to, the key is to set realistic goals and have the proper discipline to hang in there, especially when the going gets tough.

Consider the following tips. Everyone can improve their finances and – as a bonus – you won’t end up with a basement full of barely-used exercise equipment that’s standing in for clothes drying racks.

Put away your credit cards
Do you have a fireproof box at home? (You probably should to store your extra-important documents, like the title to your car or your will.) This might be the perfect place for your credit cards. Many families struggle with credit card debt and in many cases, they aren’t even sure where the money actually went.

Credit can be a crutch that only ends up helping us postpone healthy financial habits. The frequent result is years of accumulating interest payments and growing balances that may prevent you from maximizing your savings. (Debt also may lead to household friction.) Lock the credit cards in the strongbox and make a pact with the rest of your household to use a credit card just for when you have a real emergency – and this would only occur if you’ve depleted your normal emergency fund.

Get your own life insurance policy
It’s great to see families insured by at least an employer-sponsored policy, but how insured are they really? Employer plans usually don’t follow you to the next job, and the benefit for your family is typically limited to a fixed amount, such as $50,000, or in some cases up to one to two times your salary.[i] That’s probably not enough coverage for your family – and it might disappear at any time if you were to change jobs. Get a quote for your own life insurance policy that better meets your needs and that you can control.

Make a budget
Many of us think we know where our money goes, but making a budget will illuminate your spending in vivid, full-color detail. You might startle your family with loud exclamations as you realize how much you actually spend on gourmet coffee stops, eating out, clothes, golf accessories, etc. It can add up quickly. A budget may not only help you cut spending, but it may also help you build your emergency savings (yes, this should be a budget item) and start piling away more money for retirement (another necessary budget item).

Know your number
Nope, not the winning lottery number. In this case, your number is the one that can help you reach a financial goal. Saving for retirement without knowing how much you’ll need or how much you can put away each month is like running a race blindfolded. You need to see the course and the finish line ahead. That’s your number. Whether saving, paying down debt, or accomplishing any other financial goal, you need to identify the number that will define your short-term targets and help you reach your ultimate destination.

If you need help with your goals or aren’t sure how to find the number you need to know to prepare for your future, reach out. I have some ideas we can discuss.


[i] https://www.policygenius.com/life-insurance/group-life-insurance/

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