Do you stress shop?

The holidays are coming and most people feel pressure to celebrate big. Most of also know how expensive things have gotten over the past year. These two comments put together equal stress for many of us. When people are stressed or bored, they often flip through their favorite streaming sites and see things they would like to have or buy for others. Here is my tip for your online shopping this holiday season: bookmark items you would like for yourself or others, then closed the page. Go back to that site in a few days and decide if that is the gift that you want to, and can afford to spend money on.

Preventing yourself from impulse shopping will make a happier holiday season for all.


Some financial tricks that will give you a treat!

Here are a few tricks I have advised people to use that will give you the treat of more wealth in the long run.

Give up the expensive daily boutique coffee. Forgoing your $4 latte every day, for example, would save you about $120 a month. A quality coffee machine will allow you to brew a specialty coffee for yourself at home.

Ask for a lower rate on your credit card if you carry a balance. What is the worst that can happen? Things will stay the same, but most people that ask, can get a lower rate.

Ignore your raise in salary or bonus. Put that extra income directly into your pre-tax retirement savings. You got along fine without the extra income, make sure your future is better by saving that income now for the long term.

These are just a few easy tricks you can implement now to make sure you can afford all the treats of a healthy retirement.


4th Quarter tips for your financial life.

Now is the time of year when most of us are thinking about the upcoming holidays, trips, gift buying, and spending time with family. What we need to add to this end of year list is a final look at our finances, before the year is over, to see if you can put your financial future in a bright light.

Here are a few things to look into:
Shelter money from taxes Max out your retirement plan contributions to your employer’s plan, or your individual IRA before December 31st.
Determine if the standard deduction is right for you or whether itemizing is better. You can do a thumbnail tax return to see if a few extra charitable contributions might help lower your tax burden. Another trick is to pay two years of property tax in one year to help boost your itemized deductions.
Note changes in tax brackets. The brackets used to determine your taxable income often change. Check those out just to make sure there are no surprises.

Remember, the more you can save for yourself by fully funding your retirement or being charitable, is less you will pay in tax. That makes for a Happy New Year in my book.


It’s small, but it’s something.

Social Security will go up by 3.2% in 2024, not as large as recent years, but something none the less.
Increases are based on the CPI ( Consumer Price Index) which for the longest time was the same basket of goods, but not anymore, there are four different CPI indexes that are looked at and used to determine if there will be increases or not.

The recent increase was based on the CPI-U, prices for urban dwellers. Two everyday factors that do not carry as much weight in the CPI-U are food and fuel, items that most of us, as suburban dwellers, spend a lot of money on.

I truly wish that a broad based CPI was used consistently to reflect how the majority of Americans spend their money vs picking what best suit the narrative.

Decline is not the same as loss.

I have been having this conversation every day with clients, a decline in the market value is not the same as a loss. This has been a worry for many investors over the past two-ish years, let me try helping you let go of some of that fear.

One big area where mutual fund share values have declined is in bond funds. When interest rates rise, bond prices go down, this is the natural see-saw, we just have not seen rate increases like this since 2007. Here is an example of how that works:

Let’s say I lend someone $5000 for 5 years at 3%, then a year later interest rates increase and I can now make that same $5000 loan but receive 5% – can you see why the 3% loan has lost its value?

Now here is the flip side; if this is a bond fund and the dividends are being reinvested, the 3% fund can buy those reinvested shares at a lower price (the value declined) and accumulate more shares per dividend paid than the 5% fund. If you are taking dividends in cash, then you are very happy about that check as it has increased, you have to teach yourself to ignore the value of the shares unless you absolutely have to sell them.

A simple explanation I heard a long time ago is: I don’t care how fat or skinny the chicken is, as long as it keep laying the eggs.


This is a basic concept, but one that I have to repeat regularly

There is a difference between saving and investing. Saving is for funds that need to stay liquid and you may potentially use in 18-24 months. The funds should be kept in a checking account, savings account, or money market account.

Investing is for your long term future, to make sure you can retire with no worries throughout the remainder of your life.

Stay true to the basics: The beauty of age-old wisdom of investing is that it is timeless. Regardless of which year and which month you are in, the principles of investing remain the same.
So, investors are recommended to have a long-term vision of the markets and stay invested in the equity for a long term i.e., a minimum of five years to see good results.


We talk a lot about saving for retirement, what about those short term goals?

When I talk with people about savings it is generally in the vain of long-term savings through accounts such as a 401(k) or some type of IRA. We don’t talk enough about the short terms items, these are the need or want items that without savings for them, can throw all of your savings goal into turmoil.

Let’s look at a few examples of what I mean:
A family vacation
Your emergency fund
A down payment for a car
Upgrading your TV or phone
A planned medical procedure

While looking at this list, your emergency fund should be the first bucket to fill. A medical procedure or down payment for a car might be in the need category, while a vacation or upgrading electronics are in the want category.

Take a hard look at your short term goals and funds for them.


Can you believe it is already September?! Here are a few items to check this month.

Review your health benefits. Many companies have open enrollment during September, this is a good time to review your health benefits to see if you want to make any changes.

Increase your Retirement savings. Now is a good to increase what you have been contributing to your 401k plan. Remember; every dollar you increase your contribution by, is a dollar less going to the IRS. If you are self-employed and want to open a Simple IRA, your deadline is October 1st.

Review your credit cards. Now is the time to see if there might be benefits that will expire. Also, if you are planning a trip for the holidays, now is the time to pay off your credit card so you can pay for that trip. Remember, do not charge any more than you can pay when your bill arrives.

Do you need to replace a home appliance? September is when all of these items go on sale.

Take some time while you are drinking your pumpkin spiced drink to review your financial life and finish the year out right.


COLA is losing its fizz!

COLA (cost of living adjustment) for Social Security has been around 1%-3% increase over many years with the exception of the last three. Because the Federal Feds Rate has gone up so much over the past three years, we all know the cost of everything has increased. COLA over the past three years has ranged from 5.9% to 8.7%, those are huge increases. Not only are current Social Security recipients getting that increase, it has also been added to the record of all of us who are still paying into the system. This gravy train is about to end.

COLA will be going back to the average of 3%, here is what the increase will look like:

3% COLA in 2024 means the average retired worker would receive an extra $55.12 in monthly benefits, while spouses would get an additional $26.79, survivors would get $43.56 more, and disabled workers would get an additional $44.59 per month.


I talk about these two topics a lot.

When preparing for retirement, then once you are retired, good cash reserves and avoiding taxes are two big topics. I cannot tell you how much cash to keep in reserves, it is a personal choice. Some clients are comfortable with $15,000, some are comfortable with $200,000. I find my retired clients sleep better at night when they have cash on the sidelines. When the stock and bond markets crater, like they did in 2022, cash on hand is a welcome relief. Generally speaking, cash can be checking, savings, or money market accounts.

Taxes are a whole other factor in retirement. Some people think that they will not have to pay income taxes in retirement, then get an unpleasant surprise. Taxes in retirement are an important consideration and can eat away at a retiree’s budget. Withdrawals from a 401(k) are taxed as ordinary income. Social Security may be taxable. Dividends and interest may be taxable. Not to mention there may be property taxes, sales taxes and other taxes that may be invented down the road. It’s a taxing problem.

Take the time to review both of these topics prior to retirement, you will enjoy your retirement more if these worries are off the table.