A Less Stressed Holiday Season

By: Kate Welker, CFP®

It seems that as we close out Halloween night and the calendar turns to November, our thoughts turn to the holiday season and year end planning. I love the holidays and I get so excited thinking about the time with family and friends. Along with all of the happy feelings creeps in something else, a little bit of anxiety and worrying about being stressed. Yes, I’m stressing about being stressed before it happens, but I’m working on that habit. 

If you are like me, you are trying to balance multiple roles at once; business, career, family, and self. Throw in a few extra obligations and it can feel a bit too much. Let’s look at a few things you can do now to have an organized approach to year end planning.

Thoughtful Shopping - I am not generally an early shopper, but with supply and shipping concerns, getting an early start this year is recommended. To get organized, reduce the hectic shopping feeling, and budget I like to make a list of everyone I need to purchase a gift for. Next to their name I write the price range I would like to stick to, when your list is complete you can total and review to see if this matched your total shopping budget or if you need to make adjustments. I either do this on an index card I keep in my wallet or on a document on my phone (both are creatively stored to remain hidden from curious eyes). The next thing I do is to brainstorm ideas for that person, I keep this on hand and if something comes to mind I can write it down. This way if you see a sale you can take advantage of that, or when you are shopping you can be more focused. I also find this helps to find more thought out intentional gifts and does make it easier to stick to the budget.

Time Management - With all of the parties, concerts, and events it can feel like you lose control of your schedule. Be intentional in the things that you say yes to and don’t be afraid to say no to others. At a conference I attended this weekend two speakers said the same quote “Saying yes to something means saying no to something else.” 

Financial Tasks - This is a great time to review your finances and check in on where you stand year to date. The blog post Year-End Tax & Financial Planning that we posted last December has an excellent list of items to review. 

Tax Planning - Run a tax projection to see where you might come out at the end of the year. You can reach out to your accountant to do a tax projection for you. If it looks like you might owe this will give you time to make some adjustments. If you haven’t maximized your retirement plan or HSA, making a contribution will lower your taxable income. If you can itemize, consider moving some expenses such as property tax payments and charitable donations into this year to have a larger deduction. This will also let you know which tax bracket you will fall into and you can then have a conversion with your accountant and financial adviser on topics like recognizing capital gains and Roth conversions. This is also an excellent time to get your tax information organized. For more information on that you can read Tax Time in America- Getting Organized.

These are just a few ideas of things you can do to feel more prepared heading into the end of the year and to enjoy a more restful December. 

So Long Summer Slump, School is in Session

By: Rachel Poe

Summertime, a period full of pool floats, travel, and leisure. Summer 2020 still captures these activities…inflatable kiddie pool on the porch, frequent travels to the fridge, and leisure aka quarantine. Regardless of how one spent this extended summer vacation, it is now time for parents and students alike to prepare for the upcoming school year. Those not involved directly with schools, the time is now to refresh horn honking and practice your road rage speeches.

Jokes aside, the next couple weeks is a crucial time to prepare for the upcoming time, mental, and monetary commitments that are approaching with the reintroduction of schools. With the majority of schools having closed for summer early, it is important to start considering the process of transition as we come out of a longer duration of summer vacation. Whether in grade school, college, or continued education, keep reading for some tips to help get back in the swing of things.

Fill the Well

One of the most important things to do when preparing for any type of event change in your life is to fill your cup. Mentally preparing for the change before it comes will aid in transitioning period. Whether this is taking a weekend to relax, reading scripture, diving into a book, connecting with family, or going dark on social media, use this time to connect with yourself. Think of it this way, if your glass is empty, you are not setting yourself up to pour into the glass of your children, spouse, coworkers, etc.

Get Ahead

As financial planners, you may think this comes easy for us. In reality, trying to plan at the last second is stressful and inconvenient. Our “trick”, plan in advance! There are many ways this could be taken: planning out vacation days, finalizing a chore chart, beginning morning/evening routines, deciding snack staples, discussing carpool, library visits, or scoping outfit/supplies selections. Carving out the time associated with your particular school will help transition students into school schedules. Whatever this looks like for you, beginning the steps to answering some of these questions may help relieve some of the stresses associated with “Back to School” festivities.

Make it Fun

While parents may be more excited than children to head back to school, do your best to get them pumped! Specifically with COVID, this may be a time to highlight the ability to see friends, meet new teachers, begin some school activities, etc. One way my mother would help boost school would be through shopping! Although I had uniforms, we would partake in Tax Free - Back To School Holidays as a time to get new supplies and deals for school. Specific states like Alaska, Delaware, Montana, New Hampshire and Oregon don’t charge sales tax statewide. It is important to look into your specific state to see if you are able to take advantage of any back to school events. Get creative - use this time to take some lessons learned during the break to jump start the school year!

Lastly, in a previous blog post, 5 Benefits of Budgeting, I go through some core reasons to begin the budgeting process. With school expenses including supplies, technology, outfits, food, etc. it is never to late to begin getting your expenses in order.

Contact us today to learn more about how to start!

Summer Staycation

In Pre-Covid times many of us would be enjoying or planning a summer vacation. I had originally looked at this month and planned to write about summer vacations, saving for them and the importance of enjoying your money and your time. Just as summer plans have shifted, I thought I’d shift to talk about ways to enjoy the opportunities for entertainment and relaxation you can find around you.

This may be your summer to save money. Being forced to stay close to home opposed to taking the big vacation should cost less. You could use those extra funds to put towards another financial goal or take those funds and add to next year’s vacation fund for a bigger dream experience. Even if you did not have a vacation planned it is still summer and you want to take advantage of the weekends.

So what do you do? You have the time off, might be tired of being home after self isolating for months, but still want to maintain social distancing. Following are a list of places to consider exploring, maybe you’ll find a treasure close to home you have experienced before.  I am located in Western, NY so I am going to share some local experiences I have been encouraged to check out. Let me know what you find in your area! 

• State Parks - Last summer I wrote a blog “Summer In the Park” sharing information about the New York State Park system. This is still one of my favorite go to options for an easy, frugal day out surrounded by natural beauty. A quick tip to find a park near you is to use Google Maps. Zoom out and type in the search bar the type of park you’d like to find (local, county, state) and they will be marked for you. 

• Wineries - I am blessed to be in the Finger Lakes region and we have beautiful vineyards. You do not have to be a wine drinker to enjoy this, seeing the operation and following the trails to see the scenery is a fun outing. One excursion in our area is the Seneca Lake Wine Trail, mapping out a journey to follow. 

• Museums - There are going to be more restrictions on visiting indoor locations so I recommend calling ahead to see if you need to reserve a time to visit. In nice weather you can also visit outdoor museums and historical sites. Right down the road from our primary Corning office is the Corning Museum of Glass and The Rockwell Museum of Art. A little further away we really enjoy the Rochester Museum and Science Center. Outdoor sites - Again right in Corning is Heritage Village and a little further away one of my favorite destinations is the Genesee Country Village and Museum. 

• Hiking Trails - Free to explore and likely easier to avoid people! A quick google search should bring up local trail maps. Please be safe and take a hiking partner. The Finger Lakes Trail runs right through my town, there are over 1,000 miles of trails so there are many opportunities to find a small section to hike. 

Use this summer as an opportunity to explore life in a way that may be different for you. See what your area has to offer. With conditions and requirements changing regularly I do encourage you to call or visit the website of where you plan to go beforehand to be aware of any closures or requirements they may have.

This is a summer to reconnect with your local community, and remember Amy’s saying, “Life is about events, supported by your dollars and cents.”

Raising Children Who Understand Money

By  Kate Welker, CFP®

One of my goals as a parent is to raise my children to be aware of the value of money and as they age to develop healthy financial habits. I have had friends ask my advice on this and have seen social media posts from parents of young children asking for input. The hardest part of this is just like everything else in parenting, you will need to find what works for your family and for your children or the children in your life. We are so excited we have become a Sammy Rabbit official partner and have been able to bring Sammy’s Dream Big story program to you! This is geared towards children ages 7-10 and is a storybook coloring book and activities to teach financial literacy.

I had a specific experience that really impacted me and has made this issue important to me. I was working a merchandise stand for an organization that had a special event for 3rd-6th graders. The kids had come with money they were anxious to spend, but it quickly became apparent that a simple understanding of the value of money was missing. They might have brought ten dollars and asked for a more expensive item like a performance wear sweatshirt, when I said the price they would be flabbergasted that things could cost that much. It was across the board obvious these children had no concept of the monetary value of things, how much they should cost. Quite literally I had three children state they thought a postcard and a hat would cost the same. The other thing I saw happen was the child would find something in their price range (after they asked me if they had enough) and then just throw all their money at me to figure out, and many many times didn’t know they had change coming back or didn’t wait for it and I was chasing them down with money.

So what are some things you can do to work on awareness and behaviors over time? Here are a few thoughts.

Let children regularly pay for items. This is something that can be started with very young children and I’d recommend keeping the transaction to one or two items. This helps them connect in their head that you don’t get an item unless you pay for it, and starts to build awareness of values. Let’s use a matchbox car as an example with a price of $1.42 after tax. The child will hear the total, have to give the cashier 2 one dollar bills, and wait for the change back. When they are learning about money children need to use actual physical money to build that bridge in understanding, a debit/credit card does not provide that mental connection.

Discuss prices. When you are shopping don’t be afraid to point out prices. My kids love weighing and printing the labels for produce, I like that it saves me a step but more so that they see the price on that sticker as they print it. Sometimes I even hear the comment of “I didn’t know those cost so much!” or “wow, those are pretty cheap.”  Those are the moments you are building toward. Side note: a small bag of bulk candy costs much more than a bag full of bananas, that is a visual learning lesson on multiple levels. This can be done with everything you shop for. If you are buying new winter hats, mention the price of several items you are comparing and maybe talk about brand and quality, point out menu items with the associated cost, repeat out loud the price of a movie ticket. This will not be something that turns into immediate results, but over time will help children really understand what price means and develop that internal calculator of value.

Have children manage their own money. There are many schools of thought over giving children money and many resources out there. Allowance, earnings, gifts wherever the money is coming from allowing them to have some spending money to manage is important. You can absolutely still guide them and have ultimate veto power over their purchases. As there are things they want to purchase they will need to learn: how much it costs, how much they will need to save for it and how long it will take to get that. If they are of an age where they are earning money for work they will need to think how long they will have to work to make that much. We made a decision a few years ago to give our children a certain amount of money each week to manage, but the condition was they had to pay for their wants. I was tired of the “can we get this,” “I want that,” and “Why can’t I have this” whining when we shopped and I was really struggling with how to make them understand. For my children this has worked really well. Those whiny questions happen rarely now and the number of items coming into my house to be played with once and set aside has gone down because they are really thinking through their purchases and how much they will value that. I’ve been excited to see them stop and look at a price and the item and make a thoughtful decision. They’ve also been more motivated to go above and beyond to find ways to earn money now that they are learning how much items cost and how long it takes to save.

As I said in the beginning each child and family will be different in how they learn and teach, but start with small things and see where it takes you. I think so many people are afraid to talk about money with their kids or don’t know when or how to start. I encourage you to just start, wherever you’re at, and build that financial literacy foundation with them.

Love and Money

With Valentine’s Day right in the middle of February, we are surrounded by reminders of love and relationships. We thought this month it would be appropriate to spend some time talking about relationships and finance.

by Kate Welker, CFP®

Money consistently is listed as one of the top reasons for stress in relationships and causes for divorce. Money is one of those topics that people sometimes like to avoid, as if they don’t talk about it it won’t exist, and that just leads to more stress. Along with your Valentine’s dinner I want to encourage you to set up a money date.

Make it a real date. Mark it on the calendar, get a babysitter for the kids, put on a nice outfit. You want to be able to focus and still enjoy your time together.

Spend some time reviewing what your current status is.  Take a look at your current accounts, your assets and your debts, income and expenses, to get a “snapshot” of what your financial picture looks like. Talk about your goals to see if you are spending your money in the right areas.If you’re not, ask why. Is it debt, unnecessary spending, or something else in your lifestyle? When you talk about these things together you have a teammate to work towards your goals with. It’s easier to say no to extra spending if there are two of you on board.

Check in on your feelings about your money. Do you feel stressed over your spending, do you feel like you aren’t saving enough, maybe you have plenty each month but you don’t feel in control over where its going. Whatever it is, spend some time discussing if you are happy with your money and why or why not. 

If you decide there are changes to be made talk about what that looks like and what the next steps are.

It is extremely important to be honest, hiding financial problems leads to more stress and bigger problems. There is actually a term for this - financial infidelity. If you are hiding anything it will be extremely difficult to bring this up, but it needs to be addressed. If you are struggling with how to work through this you may want to enlist the assistance or a counselor or financial professional. 

We hope you enjoy your money dates and it encourages you to do it more often. We would love to hear from you if you try this, let us know how it went!

How to Make the Holidays Full of Emotional Wealth

In this week’s blog, Financial Planner Kerrie Beene, CFP® shares ideas on how to make the holidays more meaningful.

As I was preparing to write this article, I had many different ideas; ways to save money while shopping, ways to reduce holiday stress, and ways to find the perfect gift.  However, if I am being honest, that really isn’t what I want the holidays to be about. When I think about the holiday season I have many different emotions; excitement, stress, joy, overwhelm, sadness.  However, as I get older and learn to cherish time more than anything, I realize that the Holidays are a very special time that should not be taken for granted and I do not want the negative emotions to overshadow the positive emotions.  

So this year I am choosing to do the following 3 things and encourage everyone to consider doing them also:

Suggestion #1: Don’t get caught up in Consumerism 

Consumerism is the preoccupation of society with the acquisition of consumer goods. Basically, we like buying stuff… more than we should. The National Retail Federation conducted a study that breaks down American spending on gift buying during the holidays:

• 33% expected to spend at least $1000 on gifts.

• 22% expected to spend between $500 and $999.

• 29% expected gift spending to be between $100 and $499.

• 3% planned to spend less than $100

• Remaining unknown

It is really easy to overspend trying to find the perfect gift for everyone. We live in a time where most people have the things they need and a majority of people have most of the things they want. 

So, I encourage you to not get caught up in consumerism.  Take the time do buy fewer, more meaningful gifts. 

Suggestion #2: Focus on the Little Things

Christmas is celebrated to remember the birth of Jesus Christ. Christmas is now celebrated by people around the world, whether they are Christians or not. It is a time for family and friends to come together and remember the good things. The gift giving part is to remind us of the gifts given to Jesus by The Wise Men. While, sometimes the gift giving is out of control, I do believe those we are buying gifts for are out of love. 

With the suggestion of “focus on the little things,” I am not telling you to buy people “little” gifts, I am saying focus on getting to know those you love. Feel free to buy them the smallest or biggest gift you prefer, however, spend the quality time to actually get to know them and find out the little things that they love or are important to them. Better yet, focus on them with the “little” amount of time you have with them during the Holidays. 

This leads to the 3rd Suggestion.

 Suggestion #3: Have Meaningful Conversations

Two things drive me crazy when talking to others: 1) While you are talking to them, they are looking at their cell phone, and 2) They are looking at you, but you can tell they are not actually listening to you. Sadly, this is the majority of the conversations I have.  Once you start paying “real” attention to people, you notice that most people are not paying attention to anyone, ever!

To listen intently, is to not only listen to what they are saying, but also to not be thinking about what you are going to say “next.”  Take the time to really listen to people. This is something we should definitely be doing during the Holidays, especially because we normally do not get to spend this type of quality time with the ones we love. 

P.S.  Put your cell phone down! If your excuse is that you use it for your camera, then treat it like a camera.  Take the picture and then put it away. All of those social media posts can be made later, when you are alone and away from the ones you need to be spending time with. 

Build Your Wealth by Taking Advantage of Benefits Open Enrollment

In this week’s blog, Financial Planner Kate Welker, CFP® defines top benefit terms to help demystify some of the confusing benefit terms.

In the next few weeks you may open your mail or email to see notices regarding open enrollment season through your employer. Open enrollment is a period of time you can make changes to your employee benefit options that are normally restricted. This is also a great time to review your entire benefits package and make any other adjustments as well. Let’s walk through a few options you may be looking at.

Health Insurance is the main thing most people think about during open enrollment. Compare the components of the plans offered and look beyond the premium. You will want to compare the deductibles, co-pays, and which providers are in-network. Also take the time to review the prescription plans against your current medications to see how those are covered.

The FSA or Flexible Spending Account is the next thing to consider. A flexible spending account allows you to contribute pre-tax dollars to cover out of pocket medical expenses including co-pays, medical supplies, dental, and vision expenses. If your benefits include access to an FSA this is a way to lower your taxable income and pay for expenses you would incur anyways. You will have to decide how much to contribute each pay period. Be sure to review the plan terms and not to contribute too much. If you have a balance at the end of the year the plan will allow you to either roll over $500 or spend it within a grace period.

The HSA or Health Savings Account is an option to consider if you have a high deductible health plan. To qualify you must have a deductible of at least $1,350 for an individual and $2,700 for a family plan. The contribution limits are much higher and depend on the type of insurance and other benefits you have. Like an FSA this account is used to cover out of pocket medical expenses and is an income tax deduction. Unlike an FSA, an HSA balance will roll forward year to year and the growth on the account also grows tax-free. Be sure to look for an employer contribution that may be offered and take full advantage of that contribution.

Dependent Care FSAs are like the medical FSAs, but for childcare. This includes daycare, preschool, summer day camp, and after school programs. Also included is adult daycare. If an adult is your qualifying tax dependent and they require care while you work this is an eligible expense. With a DCFSA you are able to contribute up to $5,000 pre-tax.. Some employers also offer a matching contribution into these accounts.

Other Benefits may be available to update at this time as well. Reach out to your HR department to ask about your benefits package and see if there is an option you were not aware of. Some employers offer additional insurances like pet insurance or unique legal services.  

Block out some time for yourself to be able to really read the information you are given and consider your options. Look at the bigger picture benefits like tax savings, lower taxable income reported, employer matches, and the satisfaction that you are getting the most benefit out of what is offered.