Yup, it’s that time of year again

After the holiday eating and shopping orgies, many of us start to think about our behaviors. We resolve to make changes in the coming New Year. We promise ourselves we will do things lik

  1. eat more healthy food
  2. exercise more  and
  3.  get our financial act together.

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I admire women and men who make these resolutions. They  know there are problems They even know what the problems are. And they know how to fix them. They start to eat better, exercise more and maybe even pull out a piece of paper, or go online to start to develop a budget.

But most do not stick to this discipline.

Well, they are human, after all. They, like me, yield to the temptations of dessert, if not the other pressures of daily life. They are imperfect like me and maybe you.

What’s a human to do?

Hire someone. Get a professional to guide you and keep you ON TRACK. That professional nutritionist, trainer or financial advisor has the knowledge and experience to start you off right. S/he will explain the basics and then help you implement them–by telling to you focus on your core and/or your bottom line.

You are more likely to take her/his advice and become more disciplined. S/he will give you easy steps to take. And since you feel accountable to someone besides your (sweetly imperfectly human) self, you are more likely to stay ON TRACK and achieve some of the goals you have set for yourself during the next year.

Try it. You will be glad you did

 

But, if you need a little nudge, here’s  a stimulus. It is a free quiz developed by a University. (Yes it is from New Jersey, imperfect at it is. Those of us from N.J.–like Jon Stewart and me– really do have something to offer.)

So click on this link to take the absolutely FREE quiz. Then re-read this post and see if it is time to call a professional and really make a change for the better. 

What are you waiting for?

Procrastination. It is soooo human. It is sooo seductive. If we  just put something off, we feel like we don’t have to stress about it. But, if we delay, dawdle, postpone, ignore, we actually deceive ourselves.

Why? Procrastination is magic. It is based on illusion. 

Illusion?

Yes. Because  you think that it costs you nothing to drag your feet.

But procrastination is amazingly costly!!!!!!

The longer you wait, the more you lose. The longer you dawdle, the more you squander your self respect.

This is especially true if you put off focusing on your money and its role in your future. The longer you wait to take steps to improve your finances, the more money you lose.

Good news. If you stop procrastinating, you could have your money working for you. Your Hot Flash Stash of Cash could be building up for you.

Bad news. If you continue procrastinating, for instance ignoring your credit card debt, you will squander amazing amounts of your money on interest payments and fees.

Sooooooo………….Stop procrastinating. Start to take control.

If you, yourself,  can’t get past the seduction of delay, (and can’t DIY within a month of reading this), consult a professional.

Conferring with a professional should not be a strange idea. After all, you turn to a professional to cut and style your hair, or paint your toenails. You go to  a professional to take care of your teeth…….So, if you don’t floss daily, that dental professional can help you, no matter how challenging the problem.

Your money challenges, right there on your procrastination list, can be deftly handled by a trained, experienced professional.  S/he can clarify what you need to do, give you a set of steps to take, and support you while you get you get your finances under control. And s/he can help you with that huge challenge– having enough money to pay for everything you need for the rest of your very long life. If you want the dignity and self respect that financial security brings, it is time to consult a professional.

So what are you waiting for?

 

Mistakes?

Sally Krawcheck wrote a great piece recently. I have to bring her wisdom to you.

She begins with a few  “misjudgments” we women might make. Now I am sure each of you is….perfect. But just in case you are a bit more human, and so may occasionally err (like I do), I thought I would list a few here.

This list starts with a few the mistakes that wives/partners often make. One or two might seem a  little “retro.” Read them anyway, making sure you have not done these things, because you trust a partner too much, or  think you do not have enough time, or will never face a crisis like divorce or the death of a partner.

1. Letting your husband or partner manage the money, without getting involved.

2.  Signing a joint tax return without reading it.  

As a woman in the 21st century, you need to know how much money you hold as an individual, how much he/she holds and how much you both hold jointly in accounts. You need to know where the money is stashed, how it is managed, and if it is managed or mismanaged. You also need to be able to discern whether your partner is hiding money or misdeeds from your  (like maintaining “another woman” or engaging in some nefarious and illegal activity) and doing so with your money and risking your good name.

You also need to know how much money your partner/husband earns. That dollar amount is written right there on the front page of the the tax return, and the W-2 slips that you need to provide to the IRS. If your partner earns a substantial amount, you need to concern yourself with the ways in which this money is spent or retained to increase your joint financial security. Does your partner/spouse share income with you? Do you each hold accounts in your names, and/or joint accounts? Or does he (or she) hold it all in his/her name?  Are there provisions made for loss, such as a death? Are there steps taken to make sure you will not be left penniless? And if you  have children, what has been done to provide for them, as heirs or orphans.

This becomes important whether you are dependent upon your partner for an income, or if you both earn a living. You need to make good decisions about the income you both earn. Why? In the 21st century, one of you is likely to lose a job, at some point–due to corporate restructuring, downsizing, mergers & acquisitions, etc. So you need to deploy your income while you each work to make sure you have an emergency fund (to tide you through job losses). And you  have to make certain you are saving enough cash from each paycheck and investing it in case of a long term loss of income, a disability or loss of your partner.

Let me offer you a third one on her insightful list. 

3. Making decisions about staying at home, versus retaining employment after you have children (or care for an ill parent, in-law etc.) without calculating the long term impact on your career and your family’s income, is a lapse.

Why consider this? Once you leave the workforce you are less likely to return to a position of equal status and income.  History has shown that women’s income is often only 77% of that of a man. Some argue that this lower pay is a function of our movement out of and back into the workforce. So, why not think this decision through, with the aid of a spreadsheet? Run some scenarios about the dates of your  return to the workforce. Make sure you calculate best case and worst case scenarios and then run a scenario for something in between these two.

These are just 3 of the “The Top 10 Financial Mistakes Women Make” according to Ms. Krawchek. I promise to offer you a few more in subsequent posts.

Fraud? Did she say Fraud?

I love the fact that FINRA has created a set of tools to help you, and me, find fraud and fight it.

FINRA’s Fraud Center

FINRA provides a set of tools and explanations as  part of its campaign to  protect investors.

The idea is simple. If you know more, you will be able to fight off fraudsters. So take a look at this site.

And if you are brave, check out the thing they call the  “fraud meter.” It measures how susceptible you are to fraud. Go ahead and take the test.
Scam Meter Don’t worry, it doesn’t hurt (anything but your pride)

Now, if this teaches you something, share it with your friends. Host a party and show a video that helps you and your friends protect yourselves from con artists. This show aired on PBS, so it is a good one. And you can get it for free. So start popping the popcorn and dust off your couch. And get your friends in to watch the show. Then discuss the issues among yourselves.

You will be glad you did.

Oh, and tell them Hot Flash Financial sent you.

Hot off the presses!

Here it is! Your very own paperback version of  Hot Flash Financial!

It is a grown up version of the website. No actually it is a development of the Hot Flash Financial approach. Yes it retains the hot flash method– laugh while you learn. And it offers clear explanations of complex issues, plus a set of STEPs to follow, STEPs you can rely on, if you want to increase your financial security.

So why buy a copy?HFF cover

The more you  know, the more control you will feel. Your stress about money will start to melt away, because you will know what you are doing with your money, and how. That is the best way that you can improve your future.

And, by the way, it is cheap. Your $15 investment will pay back a thousand fold!

So, hit the link to  buy your paperback copy  “and get one today!!!!” (as they shamelessly say on TV)

You will be glad you did.

 

Open those envelopes

It’s that time again. When important envelopes come flying into your mailbox. These envelopes usually have BOLD text on the front that say something like

 IMPORTANT TAX DOCUMENT ENCLOSED.

What do you usually do with those envelopes? Just pile them up?

Aren’t you just the least bit curious about that important  information?

Why not do something different this year?  After all, you are older and wiser now.

Sooooooo

OPEN THE ENVELOPES!

READ THE FORMS!

Then file them in a  careful TAX file, so you can start getting more organized about your money.

In addition, your clever organization will help you get ready for taxes, early. And maybe file early so you get your refund early!


Those are some good reasons to open them and read them. So let’s tell you what to expect and why you should read them.

In January, here are 2 kinds of documents that come in the mail. The first set of envelopes hold statements that tell you how much money you (and/or your partner) made last year. The second set, usually 1099 forms, tell you how much you earned in dividends or interest, and provide other information.

Focus on the first set of envelopes. There are thick ones, and very thin ones.

  • The thin envelopes hold forms called W-2 (forms).  A W-2 tells you  how much money you (or your partner) earned last year.
    • When you see a W-2, look for Box 1. It lists WAGES, TIPS AND OTHER COMPENSATION. What is the dollar amount? That’s your “gross” or total income. The amount that you get paid before all the benefits and taxes are taken out. That is a good number to know. And, it is an important tax document. You will need it to fill out your income tax documents and send it to the IRS. So put it into your new Tax File.
  • The thick envelopes tell you how much money you hold in your retirement accounts, and other accounts at banks and investment houses. These are year-end statements. So grab them, and read them so you know how much money you held in each account on December 31 of last year. Then go one better. Add this information to a list, your List of Assets. (See the Tools menu for the template you can use.) Make this a New Year’s Ritual. Every year, write down how much money you hold in each and every account. Then add up the total. This total  is another important number to know.

Now let’s look at the second set of envelopes. They generally come from Banks or other financial institutions . They tend to hold forms called 1099s.

  • 1099 form tells you how much interest (1099-INT) or dividends (1099-DIV) you earned in each and every account that you hold. There are also 1099-R forms and 5498 forms that list IRA accounts, and contributions made to retirement accounts.

While these forms may seem boring, they actually can help you understand a lot about your money. Let’s say you don’t remember how many accounts you or your partner holds. Well, these forms remind you. Each one lists the name of a bank or financial institution that holds your account your partner’s. And it tells you

    •  the type of account (like savings, or investment or retirement)  held at that Bank
    • the account number
    • and the name of the person, or persons who own the account and control the money in it.

So if you forgot to include 1 or 2 accounts in your List of Assets, these 1099 forms can remind you of their existence. After all, Hot Flash Financial wants you to keep track of every account that holds your hard earned money. So pile all of these 1099 forms into your Tax file, and use these forms to cross-check your holdings.

If you find more accounts, add them to your List of Assets. Then track down the total dollar amounts held in each and write it on your List of Assets.  When you add up your total balance, you will really be happy to see value of your assets grow!

So watch for these envelopes. Open them up and read them. Use them to update your List of Assets.That way you will  know how much money you have. And, you can get organized for tax time.

You will be glad you did.

———————–

If you get all your tax documents organized you can file your income taxes early. THAT MEANS YOU CAN GET YOUR REFUND EARLY!!!!

A new tradition

Let’s start a new “tradition.”  (Humor me. I was trained as an anthropologist. We anthropologists  love rituals.) Let’s call it a Hot Flash Financial Tradition.

What is this tradition? First it, is a ritual that occurs around new years. How do you do it?  Every year, you revise your List of Assets to reflect the December 31, 2012 balances. After you have the year end balances, you add up the total. Then do the really smart, Hot Flash Financial thing– Celebrate what you did right. And use your new List of Assets to make some decisions to improve your financial security next year.

If you have not developed your own personal List of Assets, create your first one today. (Go to the Tools Tab and select List of Assets.)  You take the same steps as someone who has a List of Assets.

Here are the steps you can use to follow the ritual. Go on-line to access every one of your retirement accounts, as well as investment and savings accounts. If you already  created your list of assets, add a column and mark it December 31, 2012. Input the dollar values for the last day of the year for every one of your account balances.  Then add the dollar values all up to get a Total. Now, do what comes naturally. Find out if your retirement account balances are higher than last year.

The next part of the  Hot Flash Financial Tradition is crucial: figure out what you did right! Also figure out what needs to be improved.

What you did right:

  • If you added more money to your retirement accounts, the total should be higher.
  • If you were invested  in stocks (or stock mutual funds) your balances may be as much as 10% -13% higher. (The S & P 500 booked a 13% increase over last year, 2012. If you invested a portion of your portfolio in Bonds, you may not be as high. But you got stability or less crazy fluctuations in your account values. Why? you reduced your risk by investing in bonds. Reducing risk has a cost. But it also has a strong plus–it allows you to sleep better at night.)

This is the most fun of this ritual. Pat yourself on the back and celebrate what you did right!!!!!

If you added money to your retirement account, but the increase did not meet your expectations, figure out why.

What you could improve in the future:

  • Did you add enough money to your retirement account  to make the total budge?
  •  Are there other reasons for the shortfall in your expectations about your retirement account balances, and your overall Hot Flash Stash of Cash?
    • Did you decide to save for the future, but you deposited that money into a savings account instead of your retirement investment account(s)? A savings account probably gave you about 1% return in 2012  By contrast, the stock market gave about 10%-13% in the same year. Did you make the right decision, saving in a savings account rather than a retirement account? What will you do in the next 12 months? Invest in your retirement account or in a savings account?
    • Savings accounts are nice. They reduce the risk that you will lose the money you deposited. But remember there is a “risk-return” trade off. If you take on more risk–investing in the stock market, you are likely to get more return. (In this case, the return in 2012 [and most years] would have been positive, although the market did move up and down a lot during the year. While the dollar amounts fluctuated, over the long term, in this case a year,  you were ahead.) If you take less risk–investing in a savings account–you are likely to get a lower return. Lower risk is often correlated (as we say in the biz) with lower return.

Your handy- dandy List of Assets becomes a really important reference point.  It also enables you, no actually empowers you to make some important decisions and improve your financial security. Your decisions can increase the number of things you do that are right over the next few years. So you can celebrate more. 

After celebrating, take a closer look at your List of Assets to figure out what you can do to increase your own, personal financial security in the coming 12 months.

Since we can’t shut up, we will suggest you do 2 things.

  1. Increase the amount of money you deposit in your retirement account. Increase it by 1%. And, if you can, work toward increasing your contributions, over the next year or 2 or 3, to deposit the maximum legally allowed.
  2. Decide if you are comfortable with a bit more risk. If so, invest a greater portion of your retirement savings  in the stock and bond markets, for the long term. If not, stick with savings accounts.

Make this  Hot Flash Financial tradition, your tradition  every first week in January. That way, you have more control. You have the knowledge of what you have done well. And you can take the steps you need to take to improve your financial security over the long term.

New Years Resolution

Here at Hot Flash, we love New Years Resolutions.

Allow us to suggest one for 2013- Live within your means.

Or, since we are entering a year that ends in unlucky 13, we can rephrase this resolution in terms of luck.

It is  unlucky to live above your means. (So every time your write the numbers 13, you have a reminder, nudge, or prompt to remember your resolution to live within, or even below, your means.)

So what does that really imply?

Your “take home pay” is the focus. It is your limit, your “means.” So you can spend only the amount of money that you bring “home” in your paycheck. Not a dime more. (And you can NOT cheat by charging something on your credit card(s). Unless, of course, you pay off the total balance due when the  bill comes.)

You must be thinking…… that is so………….un-American…..so impossible.

But is it?

Hmmm. It is tough for Baby Boomers to hear this, but……………your parents probably lived within their means. (And they probably saved some money while they were doing it……. Just sayin’)

Why would you do this?

If you start to develop the skill of living within your means, you will have a more sustainable life style.

That is probably not such a bad idea, given the fact that you are likely to live longer than your parents.

So how about it?  Resolve to live “within your means.” Test yourself, and see how you do.

Here’s a short take home quiz. Find it if you can you live within your means, at least as long as you followed your diet last year? Or as long as you committed yourself to exercise every day?

Now, this in Hot Flash Financial talking to you. S0 if you try, and find out that you are not exactly perfect, use laughter as a weapon. Tell us your funny story. Share it with us at hotflashfinancial@gmail.com.

That way you can join us–Hot Flash Mamas–as we imperfectly march toward the next phase in our lives.

Help a friend?

Do you have a sense of humor? Do your friends? Do your friends have a sense of humor about their own behavior?

Well, here is a new sweepstakes with a great idea, Help your friends. That is, help one of your friends who has some trouble with her/his finances, especially spending.

Now, the page introducing “Help a friend” clarifies that we all make mistakes and waste money. But, the one you “help” would merit, as they say,” an Olympian gold medal in money squandering.” So, the argument on the site goes, do your friend a favor and enter this friend into this sweepstakes. (At the same time you enter yourself into the sweepstakes). If you win, you get…… money.

There are videos associated with this program, and they tend to feature young, college age folks discussing the varied ways they spend money on “stuff” –memorial swords that are probably plastic, ugly designer jeans, myriad internet purchases, parties, taking a girlfriend to the “Jersey Shore” …………You get the point.

I decided to see how this works. So I pressed the HELP A FRIEND BUTTON and sent the email to myself. (I chose not to send a photo to post on the FACEBOOK  page of the site. It would show my friend posing with at least one incriminating impulsive purchase.)

I did receive an email. The email is well worded and raises some really good issues to consider. When I clicked on the  link, I was really pleased with the quiz that you can can take. It raises “your consciousness” on some spending habits that can be problematic. The  site itself has wonderful tools, such as calculators that help you budget, pay off debt, etc.

Now, I am a big great fan of NEFE—the National Endowment for Financial Education that created the site, and the Help a Friend sweepstakes. And I am a great fan of using humor to make a point.  And this Help A Friend Campaign uses humor to accomplish an important goal, help friends who waste money.

What I don’t know, is how my friends would respond. I mean, how would this work with “women of a certain age and distinction?” Would my friends be offended if I entered them into this sweepstakes? Or would they take it in stride, see that you can use humor to make some important points, and change your behavior?

What do you think?

Social Security and you

You are probably going to  hear  a lot about Social Security in the run-up to the next election. Each party will be talking about what are sometimes called “Entitlements.”  It is important for you, as a woman “of a certain age and distinction,” to know who really supports specific programs, especially Social Security.

Why? Because Social Security is one of the most important sources of money for women after age 65.

Really? Yes. Because women live so much longer than men. So we rely on Social Security (and Medicare) for a greater number of years and a greater number of dollars.  As we women age, a bigger and bigger portion of our monthly income comes from Social Security!

How much do we rely on Social Security? Well, we have some figures for you. Women are who 65 and older, get more than half (or  58%) of their income from Social Security. And, as we get older, and spend down the money we had saved for retirement, we increasingly rely on Social Security for all or nearly all (90%) of the money we use to buy food, pay for housing, etc. By the time you pass your 80th birthday, many  (38% ) of you will be completely or nearly completely (90%) reliant on Social Security.

So now you have to know the facts about Social Security.  You have to know if Social Security will be there for you, your sisters, and your children. So start here, and then click on this link Social Security.

Remember, you have to think long and hard about a candidate and his stand on Social Security and other “Entitlements” So when you decide to vote for your representative in Congress, in the Senate, and for the President, make sure you vote for someone who will continue to support Social Security and so older women. Cut through the “stuff ” on those political commercials. Make sure you check out the truth about past voting behavior, key proposals (like budget proposals) made by each candidate, and cross-check with an independent fact checker.

Why? If you, or your sister or best friend, is one of the women who will rely on Social Security for 58% of her income from age 65 on through the rest of your life, you need to vote to make sure every candidate who has your backing will support Social Security.

 

footnote: I am drawing my facts based on 2010 statistics and analyzed by the  National Women’s Law Center “Women and Social Security: Key Facts” May 20, 2011. Here is the link. http://www.nwlc.org/resource/women-and-social-security-key-facts)