3 months ago
Hi Connectors! Looking to crush the fear when it comes to your finances? Want to have a healthier relationship with your money and make it work as hard as you do?
As Beth Collins mentioned in her post, savings expert Elizabeth Leamy and I will be taking questions this afternoon between 1 and 5 pm ET. Let us know what's top of mind for you?
The Crucial Skill You Didn't Learn In School
linkedin.com•Even though money management is something virtually everyone has to tackle at some point, very few of us have ever had any formal training in it. As a result, our relationship to money is often tenuous and charged with emotion.
Elisabeth Leamy
Hi Linda!
This is going to be fun.
I bet these smart gals will have good ideas for US as well!
Elisabeth
Linda Descano
I agree, Elizabeth! In my last Connect with Citi chat, one of the topics we discussed was retirement and how to balance saving for the "far-off" tomorrow vs spending for today. Any tips on how to keep long-term savings on track?
Elisabeth Leamy
Hello and Welcome Savvy Women!
My specialty is finding ways to save BIG money to get beyond worrying about every little latte. I've got helpful money tips regarding your housing, cars, credit, groceries and healthcare. So... what do you want to know? Ask me anything, just ask me something!
~Elisabeth
Jen White
Hi Linda, it's so wonderful to have you here to share your expertise. I'm helping my mom get by on a pretty tight budget right now. She gets some support from her social security checks and I've been putting aside what I can for her each month as well. It's stressful to worry about her having enough... Do you have any suggestions that might help either of us cope better? Are there resources available to her that I might not know about? I'd like to develop a more long term strategy but right now we're looking at day to day and month to month budgets. Thanks again for your help!
Beth Collins
Thank you so much for taking questions today, Linda and Elisabeth! I'd love to hear your tips on deciding how to allocate your savings and investments. For example, my husband and I are saving for our kids' college, our retirement, a few large-scale home improvements, and just life in general. With so many things pulling us in different directions, how do we decide where the money goes?
Linda Descano
Hi, Jen and Beth! Thanks for your questions. Jen, first step is to be sure your Mom is taking advantage of all government benefits that she is eligible for from Medicare/Medicaid. Many state and municipal governments also have guides to help families access services to help them (search under terms like "agency on aging" or "senior living". You may want to check out AARP's website for some resources.
Christine Detris
Hi Linda and Elisabeth,
According to the recent “It Takes Two” survey released by Citi, more Americans prefer a financially savvy partner over one who is physically attractive. What financial behaviors should we be on the lookout for? Anything that we should steer clear of? Thanks!
Elisabeth Leamy
Linda, you asked about balancing spending today with saving for tomorrow. My A-number-1 tip is to automate your savings so that you don't think of that money as "yours." It's not! It belongs to your future self! Personally, if money passes through my hands, it tends to turn into shoes. So, literally, sign up to have part of your paycheck direct deposited into a savings account or investment vehicle so that you never touch it.
Elisabeth Leamy
Beth, you asked about how to balance saving for kids' college, your retirement and home improvements. Have you heard the airplane oxygen mask analogy? The flight attendant always says to secure your own face mask before assisting others. It's the same for retirement versus college. It’s actually selfless to save for yourself because that way your kids won’t be in the same situation YOU are where their parents need help. This is your chance to end the vicious cycle. And as much as you want to pay for your kids’ college, there are scholarships and low interest loans available to them. One idea is to save for your retirement now and if it turns out you have surplus money later THEN you can help your kids pay off their student loans. I'll talk about home improvement projects in a sec in a separate post.
Linda Descano
Beth, saving for retirement has to trump your children's education. After all, scholarships and loans are available to help them get through college, but most of us are on our own when it comes to retirement. It all comes down to priorities, though. I believe saving for retirement comes first - it's automatically taken from my pay. Then, I allocate among other priorities. I keep a running list of home improvement projects and a vacation wish-list, along with a tally on what each will cost. I put some aside for each and then often do a project one year and a vacation the next. This way, I'm putting my money to work in a way that is aligned with my goals, but sequencing things in to keep the cost in check.
Linda Descano
Well said, Elizabeth. I am a full believer in automating savings! BUT, folks, don't put your finances on autopilot. Make time every month to connect with your money and track your spending and then, once a year, do a full-on financial review to be sure your savings and investments are well diversified and in sync with your goals.
Jacky Carter
Thanks so much for being here, Linda and Elisabeth! What tips do you have for sticking to a budget?
Elisabeth Leamy
Beth, regarding saving for home improvement projects, of course you shouldn't fund those until you've maxed out your retirement plans and put money aside for your kids' college, if you wish. But I'm a HUGE remodeling fan, so here's an idea: Can you find specific ways to save BIG? And then earmark that savings to go into your remodeling fund? Some of the biggest and best ways to save BIG:
•Aggressively refinance your home mortgage
•Buy a used car instead of new
•Refinance your auto loan at a lower rate. Yes! You can do that!
•Protect and promote your credit score so you get loans at the lowest possible interest rates.
•Become a Guerilla Grocery Shopper, using strategies like price matching, stockpiling and coupon-combining to score huge savings.
I could go on...
Elisabeth Leamy
Ooh, Linda, you are so right. Automate your SAVING but not your SPENDING or INVESTING!
Linda Descano
Christine, I was so amazed by that result in the "It Takes Two" survey by my colleagues at Citi Double Cash. More people prefer a partner who is fiscally attractive over one who is physically attractive. So, I asked friends and family to weigh in on what makes someone fiscally attractive. Top 3 answers...someone who lives within his/her "cash" means (that is, not reliant on credit cards for daily living), socks away money for retirement and is a savvy shopper, steadfastly and proudly using coupons and discounts.
Linda Descano
When it comes to the dreaded B-word (budgeting), here's my tip: think of it as a spending plan that enables you to allocate your money to what matters most versus a penny-pinching exercise that is denying you something. Attitude is everything. For me, it's about me controlling my money and not letting money - or my emotions - control me.
Elizabeth, what say you?
Anne Hemingway Feuer
With the stock market being such a bumpy ride and savings earning such pitiful rates, what does anyone think about insurance annuities as a way to grow money for retirement and/or our children's future?
Linda Descano
I love the idea of being a guerrilla grocery shopping! I'm a huge believer of buying in bulk. And, I'm a diehard brownbagger. How else do you think I fund my handbag purchases?
Elisabeth Leamy
Jacky, regarding sticking to a budget, let's back up for a sec. Most people don't HAVE a budget to stick to! So, first things first, a really healthy step is to actually dive into your expenses and figure out how much you spend on what and then how much you SHOULD spend on what. After that, here's a novel idea that has worked well for some people: set up several bank accounts for all of your biggest expenses. In the age of internet banking, it's easy. Then have your paycheck automatically disbursed among those accounts. And then, using online banking, only pay your mortgage from the mortgage account and utilities from that account, and so on. No buying shoes using the mortgage account!
Elisabeth Leamy
More ways to save BIG, in order to have more money to help mom, or to do a remodeling project, or to soften the budget strain:
•Request the "Reissue Rate" on title insurance when refinancing. It's a discount of as much as 40%! But often they don't offer it unless you ask. The price is lower because they've already done the title search to make sure your house is really yours.
•Consider buying a dark horse car, which is a less popular make and model that is roughly equivalent to a bestselling model, but way less money. Edmunds.com uses the example of a Nissan Altima as an alternative to a Toyota Camry... which could save you 20%!
•Get a cash back credit card instead of a specialty card with points you never seem to use. I am a fan of the Citi Double Cash card because spending isn't the only way to earn. You get 1% cash back when you make a purchase and another 1% when you PAY for that purchase! As a consumer reporter, I like that this card rewards you for managing your account wisely, so much so that I've partnered with Citi to educate consumers about it.
Beth Collins
Wow, thank you both for this fantastic (and eye-opening!) advice. I love the oxygen-mask analogy. We'll definitely shift our saving more toward our retirement and less toward the kids' college. When grandparents ask to contribute to the kids' college fund, should we accept, or suggest that the money go somewhere else?
Linda and Elizabeth, thanks for taking our questions today! I am learning more about websites such as Motif that bundle investments (like ETFs) and provide a nice user interface. However, I can get more advice from a brokerage firm and build a similar portfolio, but that may be more time consuming to build one by one, there's also the "Couch Potato" portfolio...Which way is the most effective way to manage this type of investing?
Elisabeth Leamy
Hi Anne, to address your question about insurance annuities, there are so many different ones, some solid, others not. Annuities also often have severe penalties for withdrawing. I suggest interviewing 2-3 financial planners who do not sell the products you are interested in, and getting their expert advice tailored to your personal situation. Often initial consultations are free --and very educational.
Elisabeth Leamy
Beth, re: whether to accept gifts from the grandparents toward your kids' college fund, yes! If your parents are in a comfortable financial position so that they can help out, take the money! You mentioned you will now shift money from your kids college account to your own retirement account, so wouldn't it be nice if some grandparent cash helps make up the difference? Asking your parents to contribute to your retirement would be questionable etiquette-wise, plus they wouldn't get tax benefits from doing so, whereas you DO get the benefit of using pre-tax money to save for your retirement.
Angelica Klein
Great post! Here are my two cents: Never ask advice on money management from someone who is or has been broke more than once. Go to the ones that are talking, making and investing MONEY.
Jacky Carter
Thanks for all the great advice! What tips do you have for selecting a financial planner? How can you tell if someone is knowledgable, trustworthy and a good fit?
Deborah Milcarek
HI there and thanks for all of your help in this! I have questions about credit scores and the best way to improve them as quickly as possible. My friend asked me for advise on this just last week and I would love to give her an awesome response. She said her credit score is in the low 600's. She has been paying on bills on time consistently for 7+ years. She has a few (10 or less) medical bills that resulted after a divorce that went to collection and a car that was repossessed after a divorce as well. These delinquent bills are all 5+ years old. Beyond that, she has nothing negative. She has two small credit cards presently that are paid on time, a car loan, student loan and nothing else- they are all paid on time consistently. She says she is frustrated because she has over 5 years of great payments and such with only medical bills and a car repo from a divorce all about 5+ years ago. She wants to know how she can improve her credit score so she can but a home in the next two years. I do not know what to tell her! Thanks so much!
Elisabeth Leamy
Cindy, regarding developing an investment strategy via websites versus brokerage firms versus the couch potato method, I haven't played with Motif, but, in general, I will tell you that I am a fan of getting expert investment advice. My preference is a professional with a reputable certification after their name, such as a Certified Financial Planner. Full disclosure, my husband is a CFP! But there are other legit credentials, as well.
Beth Collins
I'd love to hear your thoughts on how to approach money as a married couple. Should one person take the lead? Should all your accounts be joint, or should you have a combo of joint and individual accounts? What are some ways to achieve a feeling of balance when one person makes more than the other?
Elisabeth Leamy
Deborah, I'm so glad you asked about how to improve your credit score, because that's a topic I'm passionate about. Your friend will be in the clear when those medical and car repo records are 7 years old. In the meantime, a few tips:
•Pay down debt. If your friend has debt AND a savings account, use some or all of the savings to pay down the debt and --presto-- this is one of the fastest ways to improve your score.
•Pay on time. This may sound like a "duh," but payment history makes up 35% of your FICO credit score, so this is crucial.
•Keep ratios low: In other words, you want to be approved for as much credit as possible, but ideally use 30% or less of it.
•DON'T close accounts. If you don't want to use some of your credit cards, fine, but don't close the accounts. That is credit you have been approved for and it helps your "credit utilization ratio."
•Don't ignore small balances: Failing to pay a $25 bill is almost as devastating to your score as failing to pay a $2,500 bill.
Those are the "Diet and exercise" tips of credit scoring. I'll send over some flashier moves in another post.
Elisabeth Leamy
Jacky, regarding how to find a good financial planner: As I mentioned in a previous post, look for people who have taken the time and effort to get a certification like the CFP or Certified Financial Planner Professional. They are bound to a code of ethics and have to do continuing ed to keep their certification. Of course, friends and family can be a good source of referrals. But here's a suggestion: interview at least 3 financial planners and have them tell you WHAT investments they would suggest for you and WHY. Ask them to argue their case. Make sure they are designing a plan just for you, not just a cookie cutter approach. One last idea: some people have more than one planner! It's kind of like diversifying your portfolio, only you're diversifying the advice you will get ABOUT your portfolio! And then, if one turns out to be way more effective than the other, move all of your money to him/her.
Linda Descano
Hi everyone! I'm back on line after a tech glitch with my WiFi. Beth, love the question! Here's my philosophy: we have mine, yours and our money. Our money is a joint checking for household expenses, which we each contribute to monthly and decide once a year how much we contribute. We also have a joint savings for vacation and emergency expenses.
Linda Descano
For "our" money, my husband is the CFO, handling all the bill paying and many of the other financial chores.
We each have personal checking, savings and investment accounts, as well as credit cards. We give each other lots of financial flexibility in how we use our "own" money, but we do check-in with the other for a courtesy heads up for any non-work-related personal expenses above a threshold amount.
Debi Silber, MS, RD, WHC, FDN The Mojo Coach®
Linda and Elizabeth-no questions but wanted to say that I'm getting so much from reading this thread! Thanks so much for sharing your expertise, I appreciate it!
Linda Descano
I have a new post coming out on Tumblr later this week with some secrets I heard from financially harmonious couples so stay tuned. A major key, they said, was both partners working from the same set of books -- no financial secrets. No hidden spending. No hidden accounts. You get the picture.
Debi Silber, MS, RD, WHC, FDN The Mojo Coach®
Hi Linda and Elizabeth-no questions but I want to thank you for the information. I'm getting so much value just from reading this thread! I appreciate it!
Elisabeth Leamy
Beth, here's my hot tip for couples regarding how to balance money duties. I suggest agreeing to an amount of money neither of you is allowed to spend without the other's approval. Depending on your financial situation, maybe that amount is $100, $300 or $500. You're allowed to make purchases without consulting your spouse for amounts lower than your threshold, but for any amount above it, you talk it over and AGREE before you spend the money. My husband and I do this and we've gradually raised the threshold as we've gotten older and more prosperous!
Jen White
Hi Elisabeth, thanks for being here. I've been lucky enough to avoid loans but because of this I also know very little about what to look out for. Now I'm considering going back to school and I know I will need some help paying for it... but the thought of being in debt sounds like a prison sentence to me! What kinds of terms should I look for when considering student loans? Are there any common mistakes you can warn against when managing these kinds of debts?
Debi Silber, MS, RD, WHC, FDN The Mojo Coach®
Hi Linda and Elizabeth-no questions but I want to thank you for the information. I'm getting so much value just from reading this thread! I appreciate it!
Linda Descano
I want to come back to the question about grandparents contributing to children's college. Don't just tap grandparents, but aunts, uncles, godparents and anyone else who is in your children's village. Ask them to give smaller gifts to the little people and set the rest aside for their education.
LeAnn Reyes
I have no questions at the moment, but also want to thank you for taking the time and doing this! It is valuable!
Linda Descano
These are great questions and comments - thanks everyone for participating and keep them coming!
Tonya Anguzza
Several people have their on way of paying off credit card debt whether highest interest first or highest balance. Which do you think is best?
Linda Descano
I want to come back to the question on financial planners. Remember that no two financial professionals are the same. If your objective is managing debt, you may want to work with someone who is a credit counselor or financial coach. If you are focused on investing for the long-term, then a financial planner or financial adviser may be appropriate. Check out a Tumblr I wrote on finding the right money mentor. http://lindadescano.tumblr.com/post/108778997770/how-to-find-the-right-money-mentor-for-you
Tonya Anguzza
Several people have their own method of paying off credit card debt whether highest interest first or high balance. Which do you prefer?
Elisabeth Leamy
Regarding coordinating finances with your spouse: Linda and her hubby have mine/his/ours accounts. My husband and I have only joint accounts. Regardless which way you do it, Linda was spot on in saying you need to share what you're doing with your money. Here's an analogy that just came to me: Even if you have separate calendars, it sure helps to put your commitments on each others calendars. So if I have a doctor's appointment around school pick up time, I put it on my husband's E-calendar, because chances are he's the one who'll have to pick up our daughter.
Linda Descano
Great calendar analogy, Elisabeth! There is no right or wrong - what is important is that both of you agree on the "rules of financial engagement." And, if you have children, don't commit any acts of financial sabotage - once you discuss and come to agreement, present a united front to your kids.
Annette Winrick, CAPP, APM
Are there any good resources to point coworkers toward? We probably all work with one or two people who need some guidance but where we want to avoid meddling.
Elisabeth Leamy
Jen, you asked about student loans. I am not a student loan expert, but I will tell you one thing that might make you feel better: Student loans and home mortgages are considered the "best" kind of debt because the interest is tax deductible. One thing: to have the best possible credit score, you have to HAVE and USE credit. I know it seems odd, but that's how lenders know you are good at managing credit. So if you have never used credit, you may need to work on your score.
FANNY RAMOS
How do you calculate more or less what should be spending money ( our ) in order to have savings and extras ?
Linda Descano
When it comes to paying down credit card debt, everyone has to find the approach that keeps them psyched up. For some, it is paying off those with the smallest balances so they keep posting financial wins. For others, it's starting with the highest-interest cards first. And, for a few, it's a combination. Just find what keeps you motivated!
Linda Descano
Agree, Elisabeth - education and a home are "good" debt, in my view, because they provide a pay-off -- not always financial, but in quality of life, emotional well-being, a sense of community, etc. It all comes down to balance. And, of course, using credit wisely.
Elisabeth Leamy
Hi Tonya, you asked about what order to pay your credit card debt... There are 2 schools of thought on this. Some people say pay off the low-balance cards first, regardless of the interest rate, because of the psychological boost you get from crossing those off your list. The other school of thought is to pay off the highest interest rate cards first because that saves you the most money, though it can be a longer slog. Think about what type of person you are and decide which of these philosophies is for you.
Elisabeth Leamy
Linda, you and I keep leaving similar answers, not knowing the other is typing away! I love it! Means maybe we're both right!
Linda Descano
The National Foundation for Credit Counseling is a good resource for friends, family members and coworkers looking for help with debt or basic budgeting. You can check out their website here: https://www.nfcc.org/index.php
Beth Collins
I don't want to monopolize the chat, but I keep thinking of more questions! With the interest rates so low right now, we're considering refinancing to a 15-year (as opposed to the current 30-year) loan for our house. I love the idea of paying the house off faster and paying less interest over time, but I don't love the idea of having a bigger monthly mortgage payment. Any advice one way or the other? Also, any tips on what to ask/look for when refinancing?
Linda Descano
When it comes to selecting an investment-oriented professional to work with, I encourage people to get educated first about the different types of professionals available and how they work. A good reference is available on the FINRA (an industry regulator) website, which you can find here: http://www.finra.org/investors/smartinvesting/gettingstarted/selectinginvestmentprofessional/
Elisabeth Leamy
Annette, you asked about resources for co-workers and I think you meant for people struggling with debt? Probably most important is who NOT to point them toward. If people are deep in debt, there are all sorts of pseudo-services out there that will promise to help them but charge a lot of MONEY for it. What these folks need is a not-for-profit credit counselor. The grandaddy of them all is Consumer Credit Counseling Service, but there are other reputable outfits as well.
Denize Solomon
Hi Beth, we don't mind! I had the same questions about managing money as a couple :)
Denize Solomon
Hi Beth, we don't mind! I had the same questions about managing money as a couple :)
Elisabeth Leamy
Way way back in this thread Christine asked about financial traits to avoid in a partner. I don't think you can say to avoid people with debt, because lots of people have taken out loans and there are some excellent reasons for doing so. I would say my number one strike against a partner would be somebody who doesn't pay their bills on time. That is poison for your credit score and just irresponsible. Even if you are only sending in a small amount toward a debt, send it on time.
Linda Descano
Beth, when it comes to refinancing, it comes down to your goals and objectives and not just the dollars and cents. If you (or your partner) want to be able to make a career shift in 15 years that means potentially less income, then accelerating pay-off of your mortgage might be the way to go, so you have financial flexibility then. If you are barely scraping by today and can't max out your 401(k) and IRA with this level of mortgage payment, then perhaps it's better to focus on building up an emergency fund and retirement savings account. Talking different scenarios over with a financial professional is a good next step so you can think through all the pros and cons.
Elisabeth Leamy
Beth, I am a HUGE fan of the savings you gain by refinancing into a shorter mortgage, such as a 15-year. HOWEVER, you should NOT do that unless you are already socking away the maximum allowed in all of your retirement accounts. From what you said before, you may need to beef those up first. More refinancing tips in a separate post.
Linda Descano
In full transparency, when my now husband of nine years proposed, he presented me with his statement of net worth, prior year's tax return and a pay statement. Now that was romantic!
Elisabeth Leamy
Here's a simple rule of thumb I developed to help people decide whether refinancing is worth it. I call it the RULE of 5s:
Refinance IF:
•You can get a rate reduction of .5 points or more.
•You will add no more than 5 years to the life of your loan. (Preferably you'd use your savings to reduce the years!)
•You will recoup your closing costs in 5 years or less, preferably much less.
Linda Descano
I have a question for all of you participating today. Just as we are sharing our advice with you, we'd like you to pay it forward and share the once piece of financial advice you would tell your younger self. We will compile the feedback and share it with LinkedIn members.
Jen White
Hahaha Linda that's SO cute––and hilarious!
Lula Gonnelli
Hi Beth we don't mind money always something a question
Elisabeth Leamy
Doh! Earlier I promised to share some flashier moves that may improve your credit score. Then got distracted with all these other great questions. Here goes!
• Ask for a higher credit limit: Remember, the FICO model likes it when you have much more credit available than you use. Paying off debt is one way to improve this ratio. Getting a higher limit is the other. (Just don't charge up to your new limit, if the goal was to pay off debt.)
•Ask creditors to delete single sins. If you are normally ultra responsible, but you made one terrible late payment while you were very ill or some such, ask the creditor if they will delete that from your record. They have that power.
•Become an authorized user. This is best for young people who still rely on their parents. Your folks can add you to their credit accounts as an authorized user (even if they don't want to you to actually use the credit!) and that opens a credit file in your name for that card. Just make sure whoever adds you manages their account wisely, or you'll get a negative record instead of positive!
Julie McKee-Leigh
Hi Linda & Elisabeth! Great ideas flowing here. I like to show my six year old how we manage money. He sees me entering our expenses in a spreadsheet and when he asks why I tell him so we know where our money goes and how to not waste it, etc. He does get an allowance of 50 cents a week and he does chores for it - age appropriate chores. Plus extra money for hard to do chores now and then and birthdays, etc. We ask him to save some, share some and he can spend some. Kids are naturally more aware of their money and will count before adding money to their piggy banks and after! lol That being said, like a lot of other people, we are not able to afford to buy or do many things his friends are. He of course thinks money grows on trees. I find myself saying what I was told as a child, "We can't afford it." What would be a better way to say it without sounding like we are always out of money? I have heard the comment, "We choose not to spend our money on that right now", but that doesn't sound right to me nor does it fly with a 6 year old! Anyone have any ideas?
Sharon Stewart Cole PhD
That was wonderful Linda. It is also good for women to take a pro-active look at their finances and know that they are not bringing a financial burden into the relationship. There are many tools available for women today to protect their future such as good retirement planning, long term care, and tax efficient ways to accumulate cash for some other important financial objectives that you might have. How impressive would we be if we women could also give our future husband a healthy financial position.This would go a long way to developing a legacy for our children.
Julie McKee-Leigh
Hi Linda & Elisabeth! Great ideas flowing here. I like to show my six year old how we manage money. He sees me entering our expenses in a spreadsheet and when he asks why I tell him so we know where our money goes and how to not waste it, etc. He does get an allowance of 50 cents a week and he does chores for it - age appropriate chores. Plus extra money for hard to do chores now and then and birthdays, etc. We ask him to save some, share some and he can spend some. Kids are naturally more aware of their money and will count before adding money to their piggy banks and after! lol That being said, like a lot of other people, we are not able to afford to buy or do many things his friends are. He of course thinks money grows on trees. I find myself saying what I was told as a child, "We can't afford it." What would be a better way to say it without sounding like we are always out of money? I have heard the comment, "We choose not to spend our money on that right now", but that doesn't sound right to me nor does it fly with a 6 year old! Anyone have any ideas?
Elisabeth Leamy
To echo LInda's confession that her hubby presented his statement of net worth and tax returns along with an engagement ring, I have to tell you, my husband is the first boyfriend my parents ever liked! They knew he was coaching me to make my first investments, and that was a huge improvement over the previous beau who was in a band. Ha! I can see why the Citi "It Takes Two" survey resonated. Math and money skills are HOT!
Annette Winrick, CAPP, APM
Any resources to point co-workers too without sounding preachy or meddling?
Elizabeth Glagowski
Great discussion! It's fascinating. There's always something new to learn. My advice to my younger self: invest in retirement as soon as you're able. Contribute as much as you can to your 401k, open an IRA, etc. You can start as young as 21, and every little bit helps. It wasn't on my radar my first few years out of college, and I missed out on some growth potential.
Beth Collins
Linda, I love your idea about paying it forward. I would tell my younger self to learn about managing personal finances very early on, either through a class or by meeting with a financial advisor. In my early 20s, I mistakenly believed that money management was something you did when you were making lots of money. It was only in my late 20s that I realized how wrong I was!
Elisabeth Leamy
From EliSabeth with an S to EliZabeth with a Z: what wise advice to invest in retirement as soon as possible! For those who didn't do that, though, look into "Catch Up Contributions." Catch Up Contributions” are not just slang, they’re a government program that allows people 50 or older to contribute extra to their IRAs and 401Ks.
The number may have changed a bit, but last time I checked, the amount of extra for IRAs ranges from $1000 to $2500, depending on the type of IRA. And in 401ks, the government will let people 50+ sock away an extra $5,500 on top of the usual $17,500 for a total of $23,000 a year!
Gina Davis
Hello everyone, I'm little late to the table.
I would like some advice with a young man, nephew that is living with me. I am a mother of 2 adult sons. My youngest is still living at home and my nephew is living with us. I had not opportunity to be any real influence on my nephew when he was younger. I feel my and mine husbands influence has gone a long way with our children.
My nephew barely lives paycheck to paycheck and often doesn't hae enough to make it threw a week. I have made tons of suggestion and directed him to people with more authority on the subject than me.
I am at my wits end. I don't want him living with us for the rest of our lives.
His parents are not in the picture.
thanks
Linda Descano
Julie, I just heard a great story about how one dad handled your situation. He actually went to the bank and cashed his paycheck in all singles. Then, he sat his kids down and made a pile showing where all the money went. With the small pile left over, they discussed the thought process behind the choices they make and opened up a dialogue. From all accounts, it made an impression. Clearly, this may not work with super-young kids, but something to think about.
I like the idea of not saying no outright, but thinking through if we buy X, then we can't do Y and Z. When my niece and nephew were younger, it always worked with them -- inevitably they see the logic and it takes emotion out of it.
And kudos to you for giving your little one experience in all aspects of money. He is going to have some strong money muscles when he grows up.
Elisabeth Leamy
Julie, regarding a way to tell your 6-year-old "we can't afford that" without using those stressful words. First, I think it is GOOD to be as transparent as possible with our kids, so long as we don't overburden them with adult worries. As your son saves his own money, here's a great response when he wants something. "Great! Do you have the money for it?" He can then learn to pass on frivolous expenditures and save his money for things he really does want.
Elisabeth Leamy
Gina, about your nephew who lives paycheck to paycheck AND lives with YOU. Sometimes it's better to show than to tell. Perhaps you should ostentatiously demonstrate how carefully you manage your own money. AND as for him living with you, I certainly hope he is paying rent. If he is not, time to start! That's a good way to SHOW him money matters. AND a good way to make sure he doesn't live with you forever!
Linda Descano
Sharon, you are spot on! All of us have to think about the downside and prepare for the 6Ds, as Melanie Young refers to them: debt, divorce, disability, downsize (as in your job), (natural or man-made) disaster, and death. It's not easy to think about these, nor can we control them. What we can control is how we prepare and respond to them.
Julie McKee-Leigh
Thanks for the ideas! Yes, we sometimes explain that we like to do this or that and therefore we can't do what other thing he says he wants to do. Then we state that if you want to do that, we will have to give up doing this, etc. And I have in exasperation at times said, "That costs this much $.do you have that much money?" I always feel bad after saying that though as I sound kind of nasty saying it. I have, when I am less stressed, been able to tell him calmly if he truly wants something bad enough he will find ways to make more money and save for it. Thanks for the great ideas! :)
Linda Descano
Julie, another idea that may help is for you to take a photo of everything your son sees and flags as a must-have. One mom I know does this and then she and her kids go through all the photos again in 24 hours. If they really really really still want it, it goes on the list for a "buy" but what happens most often is that the kids just pass on the item.
Linda Descano
Beth, thanks for sharing your best piece of financial advice. Come on, all, share your financial savvy with us. I know you all have something to share - your questions demonstrate just how astute you are with money!
Elisabeth Leamy
Julie, it's all in your tone! Ask "Great! Do you have enough money?" in a cheerful, upbeat tone, not a negative stressed one, and it is a totally different dialogue!
Gina Davis
Thanks Elisabeth.
I struggled many years with finances. But made the decision several years ago to be more financial savvy. I do my best to lead by example.
Yes, he is suppose to pay rent. And does.. sometimes. I ask for it every month. I been trying harder to be tougher about this. But he always has an excuse. Things I think he can do cheaper and recommend - go in one ear & out the other. He won't let me actually look at his finances to help him, which is when I've suggested going to someone else.
Frustrated.
Linda Descano
Elisabeth, how do you take the work out of managing your money? As an example, not surprising since I'm an employee of Citi, I'm also a customer and take advantage of our online banking website and mobile apps to keep close tabs on my money. What are some of your money management hacks?
Elisabeth Leamy
OK, Linda, here's my financial advice for my younger self: "Don't step over the hundred dollar bills to pick up the pennies." Sure, you can save money by skipping store bought lattes, brown bagging it and walking a few extra blocks to avoid an ATM fee. Those are small but frequent savings that add up. But don't forget about the ways to save a LOT of money every now and then. I'm talking about things like refinancing your mortgage, choosing the most advantageous health insurance policy, keeping your car as long as you can stand it and shopping around for car insurance. Those are all things that can save you at least a thousand bucks! Save like that and then you can AFFORD to have that latte with a friend. The nice little interludes in life that keep the big responsibilities from bumping into each other!
Linda Descano
Elisabeth - agree completely! Excellent points!
Denize - good point!
Linda Descano
Elisabeth and I shared how we approach money in our relationships, in response to questions from a number of you. So, I have to ask: are you practicing financial fidelity and being transparent with your partner?
Elisabeth, one of the findings in the It Takes Two survey from my colleagues at Citi Double Cash was that a fair number of couples avoid talking about money because it leads to an argument. What tips do you have on how to talk about money in a constructive, productive way?
Patricia Ries
What is your best advice for adjusting to one income after being laid off? To living within your means.
Elisabeth Leamy
Linda, one way I like to take the work out of managing money and saving money is to use innovative products that do some of the work for me. For example, we all dread buying something substantial only to find the price went down a few days or weeks later. I used to try to track prices and demand a price adjustment, but it's hard to keep up and some stores won't honor it anyway.
But now, I can just register a purchase with Citi Price Rewind and the service searches for a lower price FOR me for 60 days. I then request a credit on my statement and Citi zaps me the money! Bam! For those who aren't familiar, Price Rewind is a service available on all Citi consumer credit cards. Here I am, this jaded consumer reporter, but I admire Citi for innovating like this to provide real value for its customers, so much so that I've partnered with Citi to get out the word.
Patricia Ries
What is your best advice for adjusting to one income after being laid off? To living within your means.
Caren Bell
Do you recommend staying in a career to save enough money to "someday" follow your dreams of starting your own business -- which we know can easily get put off indefinitely or for years. Or do you recommend using what you have to start now, start small and take a chance that it will work out. It seems like a life coach would say start your dream TODAY, but I imagine a financial planner would say wait until you have all your reserve buckets filled. Curious to get your take.
Linda Descano
Patricia, the best advice I would offer is to (1) be grateful for what you have, the positives in your life, (2) streamline your budget - look for opportunities to pare down spending and perhaps rethink your notion of a "want" vs a "need", (3) make coupons and discounts your friend, (4) let go of any shame or guilt - it will sabotage your relationships with others and with money, and (5) breathe. Take it one step at a time.
Linda Descano
Caren, great question and there are a million answers. Let me say this: when I conducted a virtual listening tour of business owners, the vast majority started their business while working for someone else and didn't make the final leap to full-time entrepreneurship until they had some traction with clients and had accumulated some "sleep well" savings. For some, having 6-12 months of living expenses in the bank enabled them to sleep well, while others didn't feel comfortable quitting their job until they had 18-24 months of savings in the bank. Clearly, the younger you are, the more time you have to rebound if your first attempt at starting a business doesn't work out. It all comes down to your own appetite for risk.
Elisabeth Leamy
Hi Patricia, regarding adjusting to living on one income, the obvious thing people do is to halt their discretionary spending for the time being. But you can even save BIG on staples like groceries... namely food, personal care items and household supplies. Check out the FREE website www.couponmom.com. It was started by one of my old Good Morning America pals, Stephanie Nelson. THE KEY to saving on groceries is to stack more than one savings method at a time. For example, use a coupon when something's on sale. Or combine a store coupon with a manufacturer's coupon. I KNOW what you're thinking! "It's too hard!" NOT in the age of the internet. Stephanie has weekly lists for hundreds of grocery stores across the country and SHOWS you how to get the best deals. Here's what I love: you just save the Sunday circulars or online coupons WITHOUT clipping them. Then, when there's a sale, CouponMom.com TELLS you where to find the coupon to pair with the sale, deepening your discount. THAT's when you clip it and go! Just do what Stephanie says and you will save as much as 80% on your groceries. I know some women who quit their jobs to stay home with their kids and learned to save SO MUCH on groceries that it's like a second income!
Caren Bell
Lol…wish me luck! Thanks...
Elisabeth Leamy
I've learned a lot already, gals, based on what you all want to know! Thank you so much for the thoughtful questions so far, and I'm here for another 45 minutes, so keep 'em coming!
Linda Descano
Caren, if you are serious about starting a business, check out this post I wrote which distills what I heard from entrepreneurs - hope it helps!
https://www.linkedin.com/pulse/20130520135600-34334392-8-cardinal-rules-to-succeed-as-an-entrepreneur?trk=mp-reader-card
Elisabeth Leamy
Oh! Just remembered, speaking of tools that do the work for you, anybody want to know where and how to search for unclaimed money in your name? Of course, you do! One of my most popular topics ever. The KEY is to use only reputable, FREE sites. Here are the two I recommend:
www.unclaimed.org. This is where you go for a single state search. Just put in your name and then confirm using your address. NOTE!!!! This is a .org NOT a .com. Type it in wrong and you'll be on a pay site.
www.missingmoney.com. This site allows you to search multiple states at once, which is important, especially if you've lived lots of places. Only about 39 states participate, which is why you need the previous site.
Elisabeth Leamy
Ok, that's it for me, gang. I enjoyed our chat tremendously! Thanks for the great questions. Over and out...
Patricia Andros Wowk
Linda,
I have recently consolidated my retirement portfolio with Merrill Lynch. However, do you have some key thoughts on how to manage my account other than tracking the various institutions? And is this the most proactive direction to take rather than utilizing another source?
Thank you!
Pat
Monique LaRue Wilson, MBA
Hi Linda, I'm pretty late getting started in this retirement savings arena. Been running a my own bu siness for over 13 years without any savings. Not a good plan, I know, but I can't focus on my yesterday....I've got to make better decisons today. Close to 50 and just close to a year back in the 9-5 workforce--let me add recently laid off from that gig, I'm on a fast track. I did manage to put away a few dollars towards retirement when I recently got back into the workforce. Though short lived, indont want to have to touch that while I'm in my search for new opportunities. What's the best advice to give someone withbsuch complexities in their current situation?
Jacky Carter
Thanks so much Linda and Elisabeth! The live chat has ended, but for those of you who weren't able to join in time, I encourage you to scan the comments above for some practical advice on managing your finances.
And stay tuned for our next live chat on Wed., Feb. 18 when Jennifer Kahnweiler will be taking your questions about quiet influence and being an introvert from 10 a.m. - 2 p.m. ET. I know we have a lot of introverts in the group, so this will be a great chat.
Jacky Carter
Thanks so much Linda and Elisabeth! The live chat has ended, but for those of you who weren't able to join in time, I encourage you to scan the comments above for some practical advice on managing your finances.
And stay tuned for our next live chat on Wed., Feb. 18 when Jennifer Kahnweiler will be taking your questions about quiet influence and being an introvert from 10 a.m. - 2 p.m. ET. I know we have a lot of introverts in the group, so this will be a great chat.
Linda Descano
Monique and Pat, great questions and ones that are best suited for a bona fide financial advisor to answer. With that said, let me offer a few thoughts.
Pat, speak to your financial professional at that institution to find out if they offer any solutions for integrating all of your information so you can get a consolidated picture.
Monique, you are wise to want to avoid tapping your retirement savings during this transition and I hope that you can turn that goal into a reality. The tips that Elisabeth and I offered earlier in response to a question about living on one income apply. See what spending you can pare back. Take advantage of every coupon and discount you can muster to stretch your dollars even further. Explore taking on some freelance work to pick up some extra income. And work your network to uncover potentially "hidden" job opportunities. Good luck!
Thanks everyone for making this such a fabulous, insightful and inspirational chat. I look forward to staying in touch! Thank you, Elisabeth Leamy, for co-facilitating with me. And, as always, a huge shout out to Jacky and Beth from LinkedIn for organizing today's program.
Jacky Carter
Thanks so much Linda and Elisabeth! The live chat has ended, but for those of you who weren't able to join in time, I encourage you to scan the comments above for some practical advice on managing your finances.
And stay tuned for our next live chat on Wed., Feb. 18 when Jennifer Kahnweiler will be taking your questions about quiet influence and being an introvert from 10 a.m. - 2 p.m. ET. I know we have a lot of introverts in the group, so this will be a great chat.
Jacky Carter
Thanks so much Linda and Elisabeth! The live chat has ended, but for those of you who weren't able to join in time, I encourage you to scan the comments above for some practical advice on managing your finances.
And stay tuned for our next live chat on Wed., Feb. 18 when Jennifer Kahnweiler will be taking your questions about quiet influence and being an introvert from 10 a.m. - 2 p.m. ET. I know we have a lot of introverts in the group, so this will be a great chat.