3 Key Financial Organization Questions

Posted on May 11, 2012 by alisonsalisbury

Last time we discussed how to begin a quest for financial organization. So let’s get started. The first step, assessing your current situation, will help you create a realistic plan. Acknowledging where you are will impact how you move forward. It also creates the  practices you need to put in place to create that financial organization.

Before changing anything… and I mean anything… you need to take stock. Let’s begin with your starting point. Take out your blank financial notebook, and let’s dig in.

3 Financial Organization Questions

As you write your answers down, take several minutes to reflect. Remember, you’re building the foundation of a financially organized life. What you put in is what you’ll get out of this journey. I suggest giving yourself at least 20 minutes for this exercise, giving yourself the time necessary to contemplate honest and complete answers. 

  1. What are your 3 biggest financial challenges?
  2. What are your top 3 goals for this year?
  3. What are your top 3 financial strengths?

Last year when I helped a couple get more financially organized, they had problems with 1) overwhelming credit card debt with minimum payments they couldn’t handle anymore, 2) a hefty mortgage payment and 3) a income deficit due to the husband being laid off and unable replace his six-figure income.

Sadly, this situation isn’t uncommon; many families were affected by the economic downturn. While this couple’s situation was a combination of forces out of their control, some of the issues were a direct result of how they (mis)managed their money.

In completing this first exercise, they decided their one year goals were: 1) to create a workable plan to regarding the credit card debt and change their habits in managing it, 2) seek a home loan modification, and 3) find alternative income so they could keep their home. Fast forward twelve months. They received a loan modification and rented out spare rooms. While they are still working on improving their financial situation, they have stopped their reliance on credit cards to make up the monthly income shortfall. In essence, they succeeded in creating and maintaining a workable financial plan.

So, how did it go in answering these three questions? Next time we’ll examine your past and uncover your money beliefs.

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A Quest for Financial Organization

Posted on April 28, 2012 by alisonsalisbury

Now that tax season is firmly behind most of my clients, I’m reflecting upon the whirlwind of getting documents in order, Quicken reports run, and generally putting tax year 2011 to bed. Every year my clients declare “next year will be different!” They promise to keep track of their mileage, reconcile their bank accounts monthly, and vow to keep their financial world in order. Yup, I’ve heard it all.

In the coming months, I’ll share my best financial organization tips. My hope is that these tidbits will help you gain order and control over your financial life. Taking a piece at a time, next year’s tax season could be a breeze. Or for some, it will reduce what feels like an F5 hurricane to a windy tropical storm.

First Step to Financial Organization

First, I’d like to preface this discussion about financial organization. Money is neither good or bad. It just is. How much you have in your bank accounts is simply feedback. By examining your financial situation and organizing it, it’s a way to bring clarity and simplicity into your life. Someone described money as “stored energy,” meaning you spent time and effort earning dollars. By saving money, you’ve stored that energy to tap into later. I think of money as a tool, one that you control.

As you embark on this journey, I suggest pondering these questions: 

  • Do you have a financial plan? If so, why? If not, why not?
  • What’s your relationship with money?
  • Do you have a tendency to save it, spending it miserly? Or, do you spend it freely without regard to long-term consequences? Not sure? Check out this money personality quiz.
  • What do you think is your biggest financial organization hurdle to overcome?

The answers to these questions aren’t right or wrong. It’s feedback on your relationship to money. That’s the first step, understanding how to feel about having (or not having) money, to creating a workable financial plan.

Next time we’ll talk about a notebook as part of creating a financially organized life. So, your homework is to dig around and find an empty notebook or three ring binder.

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Identity Theft Through Smishing

Posted on November 9, 2011 by alisonsalisbury

Similar to “phishing,” the latest con scammers are using cell and smart phones to smish victims out of bank account information. Identity theft has hit a popular communication tool: text messaging.  In my work at keeping my clients financially organized, I see how easily our financial privacy can be compromised.

What is it?

Here’s how it works. Identity thieves pose as your bank and send a text message alerting you that your account, ATM card or credit card is close to the limit, or has been frozen.  The text usually instructs victims to call a toll-free number to fix the problem.

Think you wouldn’t fall for it? Well, a very smart you person I know – who is Internet- and texting-savvy – fell for it hook, line and sinker. Identity thieves are pretty crafty, using bank-like language that can be hard to spot.  In this person’s situation there was bad and good news.  She gave away too much personal information to the scammers. However, she quickly realized her mistake, and since she happened to be near her bank branch she went in immediately. The bank staff worked diligently and shut down the accounts before any money was taken and a new debit card was sent to her within 48 hours. Fortunately for her this identity theft story had a happy ending without losing a penny. It doesn’t here though; since her name and social security number was compromised, she’ll have to monitor her credit report for years to come.

How to Protect Yourself from Identity Theft

There is a trend in banking to help consumers manage their finances. You can set up alerts to let you know when deposits are posted, when your balance falls below a certain dollar amount, or notification of an unpaid e-bill is due.  These texts are legitimate since you have authorized your bank to send you these communications.  If you receive a suspicious text or email, don’t rely on the phone number included in the correspondence.  Don’t respond to the text by sending a reply. Instead use your bank’s website or current statement to find their toll-free number.

What To Do After Being Scammed

If you think you’re a smishing or identity theft victim, call your bank immediately. For additional ways to defend yourself, check out FTC for frequently asked questions about how to recovery from identity theft.

If you have identity theft protection, call your account monitoring provider. If you don’t have identity theft protection, consider getting a policy. For as little as $100 a year, it’s great insurance should your accounts be compromised. 

Need help monitoring and reconciling your accounts? Then schedule a free 30-minute consultation with Fiscally Fit, Inc. Email me at Alison@fiscallyfit.us or call (650) 956-4090 for a no-cost, no-obligation appointment.

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Communal Retirement Living… No Love Beads Required

Posted on June 11, 2011 by alisonsalisbury
Communal Retirement LivingFor many of us, communes conjure up images of the sixties… complete with fringed jackets and love beads. With the economic meltdown, many of us no longer have the cushion in our retirement savings we once accumulated. And as our life spans continue to lengthen, we’re looking for healthier ways to live… both by what we eat, how we spend our money, and who we surround ourselves. Communal retirement living has recently been a topic conversation amongst my friends, who also believe the foundation of retirement planning has irrevocably changed.

 

Who knew there were so many forms of communal living!  You can rent, buy, join an existing community or even form a new one in your area. The Fellowship for Intentional Community, a Missouri-based communal living clearing house, defines an intentional community as “a group of people who have chosen to live together with a common purpose, working cooperatively to create a lifestyle that reflects their shared core values. The people may live together on a piece of rural land, in a suburban home, or in an urban neighborhood, and they may share a single residence or live in a cluster of dwellings.”

FIC maintains an extensive worldwide directory that includes ecovillages, communes, co-ops, and cohousing. In California alone, there are 265 communities and growing in both in all types of settings. Some of the benefits of communal retirement living include:

  • Shared Housing Costs. Depending upon the type of community, the idea is to pool together resources to make living more affordable. As seniors try to make ends meet with fixed incomes, sharing costs will stretch limited dollars in retirement.
  • Sense of Community. Many seniors feel isolated, especially if their children live out of state or are busy professionals with little free time. Communal Retirement Living can add a sense of independence as well as access to activities that keep the brain and body healthy and engaged.
  • Sustainable Living. Many communities are focused on reducing individual carbon footprints, using land to grow local organic produce for members, and offer resources onsite. The saying “Think Globally, Buy Locally” seems particularly apt in creating lifestyles that are kind to our planet and our bodies.

As an optimist, I think there’s a silver lining caused by the economic downturn.  It’s brought us back to basics… to look at what’s truly important to us, to examine our needs beyond material possessions, and to create the quality of life we truly want. It’s also forced us to think creatively and open the door for cooperation and collaboration.
Need help in creating a workable and sustainable spending plan? Then schedule a free 30-minute consultation with Fiscally Fit, Inc. Email me at Alison@fiscallyfit.us or call (650) 965-4090 for a no-cost, no-obligation appointment.

Posted in Caring for Seniors, Relationships & Money | Leave a comment

Organizing Financial Paperwork for 2012 Taxes

Posted on May 2, 2011 by alisonsalisbury

For most of us, the tax season is officially over. However if you’re like millions of other Americans who filed extensions because they weren’t able to finish by the April 15 deadline, you may still be knee-deep in paperwork.

With the flurry of activity around taxes that consumes us, now is the perfect time to think about how to organize financial paperwork and set up a system so 2011’s tax season is a breeze. Use your CPA’s tax organizer or last year’s tax return as your guide:

  1. Mortgage Statements.  If you own property, have a separate file (virtual or real) for your loan statements reflecting payments including interest paid and principal balance. Many financial institutions have a running tally of how much mortgage interest you pay. This is an excellent source of information for your CPA or tax preparation professional to forecast your 2012 tax bill.
  2. Paycheck Stubs. Keep the information that accompanies your paystub. Again, this is great info for planning next year’s tax bill. Maybe you need to claim more deductions to increase cash flow, or decrease them to eliminate a hefty tax bill come next April.
  3. Business Income & Expenses. If you’re a contractor or self-employed, invest in a program that specifically tracks income and business-related expenses.  Quicken and QuickBooks have most of the standard reports you need as well as the categories (e.g., auto repair vs. gas) already loaded. Be aware that some customization is usually required. Setting it up correctly will save you dividends – your time and unnecessary heartache – when its crunch time. If you need to file quarterly taxes, you’ll want easy-to-use reports needed to organize financial documentation.
  4. Charitable Contributions. Use a value guide when donating non-cash goods to your favorite charity. The Salvation Army updates their valuation guide regularly. In my practice, many of my clients ask me to research the charity for legitimacy.  Check out http://charitywatch.org as it’s a great resource in learning about a specific charity and where monies are spent. You can also get a tax break if you volunteer. While you can’t deduct the value of your time, you can deduct a portion ($0.14/mi*) of your mileage.

    Speaking of mileage, keep a log and tally it up monthly and file it in your new 2011 tax file. Come tax time, it’s already added up and documented. *Check with your tax professional for your specific situation.

  5. 2011 Tax File. If you have a file cabinet, create a tax file now so you have a place to stash receipts you’ll need for next year.  If you’re short on storage space, most people only need as much space as an accordion file from an office supply store. They close securely and allow you to label different slots so you can easily review and retrieve important paperwork.

Need help to setting up and organizing financial paperwork or keeping track of business expenses? Then schedule a free 30-minute consultation with Fiscally Fit, Inc. Email me at Alison@fiscallyfit.us or call (650) 965-4090 for a no-cost, no-obligation appointment.

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Tracking Business Mileage Can Be Taxing

Posted on March 2, 2011 by alisonsalisbury

As a small business owner, I know that expense tracking – especially those related to mileage – can be tricky and time consuming. Wanting to have a better sense of the mileage I actually racked up, I tried an experiment last April after completing my taxes.  Going in I didn’t think driving around in my trusty Prius to and from client meetings and running business-related errands would amount to much. Yet after using a simple mileage log for 60 days, I was stunned to discover I drove 450-500 miles each month. At 50 cents a mile, that was an extra $225 out of my pocket! If you’re an employee that’s on the road a lot (like a sale representative) where you use your personal vehicle on the job, it’s most likely a reimbursable expense. If your employer doesn’t cover the costs, your mileage (and other vehicle related expenses) may be a tax deduction. To make sure, talk to your tax preparer or CPA to confirm what’s allowed based upon your specific situation. When you’re a solopreneur or small business proprietor, you’ve got to wear many hats – often at the same time. Keeping track of business-related mileage isn’t sexy and a bit time consuming, but can add up to an appreciable expense you can deduct.  Make a commitment for just one month using one of these methods:

  • If pen and paper is more your style, I recommend picking up a mileage log from an office supply store or create your own on a spreadsheet.   A client puts the log on her dashboard so she’s sure to see it every time she starts the car.
  • For those addicted to their Smartphone (like me), there are several great apps that are free.  But if you want a little more functionality (like one that syncs with your phone’s GPS) it may be worthwhile spending a little to make it easier and more fun in the process.
  • For something in between, use your calendar (electronic or paper) to make mileage notes.  By incorporating your expense tracking and mileage log into something you already use, you are more likely to stick with it.

By keeping a more accurate log of your mileage, it more than pays for itself especially if it lets you keep a little more green in your pocket. Need help in keeping track of your business expenses? Then schedule a free 30-minute consultation with Fiscally Fit, Inc. Email me at Alison@fiscallyfit.us or call (650) 965-4090 for a no-cost, no-obligation appointment.

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Ready to Go At A Moment’s Notice

Posted on February 21, 2011 by alisonsalisbury

Recently one of my clients was unexpectedly hospitalized, and it reminded me that emergencies come in all kinds of packages. Whether a kitchen fire, an earthquake, or a trip to the emergency room, here are a few practical ways to be ready at a moment’s notice:

  1. An Emergency Plan. During the Loma Prieta earthquake back in 1989, phone lines were down and busy for days after the event. Develop an evacuation plan and establish a meeting place.
  2. Emergency Phone Numbers. Designate a family member or friend outside the area to act as a communication hub. I live in California, and my dad (who lives in Washington) is our designated point person. In the event that phone, internet and cell service is interrupted, everyone knows who to call for updates.
  3. Copies of Important Records. Photocopying and backing-up important information is always a good idea in case a hard drive crashes or other technical events. Store copies or originals (e.g. birth or marriage certificates) at an offsite location like in a fireproof safe deposit box. Photocopy the contents of your wallet too in case it gets lost, stolen or misplaced. Have a list of medications and doctor contact data on hand for unexpected emergency room visits or hospitalization.
  4. Review Insurance Coverage. Make sure you have enough coverage by checking your homeowner or renter’s policy, auto and business-related insurance. Know what’s covered, what’s not, and your deductible amounts. This will reduce some of the anxiety and headache when filing a claim. You may save money too by regularly reviewing your policy and taking advantage of discounts (e.g., no tickets or accidents).
  5. Survival Kit. Dust off that Y2K kit, and make sure you have supplies ready like a battery-operated radio, flashlights, medications, water, and first-aid supplies. For a complete list of supplies, visit www.ready.gov/america/getakit or http://72hours.org to make sure you’re prepared for the unexpected. Or if you prefer something in book form, Paul Purcell’s Disaster Prep 101: The Ultimate Guide to Emergency Readiness is the most comprehensive guide to disaster preparation I’ve ever seen.

Want help in creating a “Grab ‘n Go Box” that includes important financial papers for your family’s emergency plan? Then schedule a free 30-minute consultation with Fiscally Fit, Inc. Email me at Alison@fiscallyfit.us or call (650) 965-4090 for a no-cost, no-obligation appointment.

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Love and Money: Mixing Romance & Your Money

Posted on February 14, 2011 by alisonsalisbury

When you get married, you typically talk through things about personal values, career goals, raising kids, and your overall financial dreams. Things can get sticky if you have different attitudes or habits in managing your money. Living together and/or marriage is a romantic relationship (hopefully) but it’s also a financial partnership. Being faithful applies to many areas of your life together. In addition to the obvious, there’s running a household, paying bills, and saving for short- and long-term goals.

Your Money Attitude. It’s amazing what we learn as children about money, and it affects how we manage and respect it throughout our adulthood. For many of us, money is a scorecard; it’s tied to our self-worth, social standing and feeling of security. Are you compelled to spend every dollar in your wallet? Do you feel reluctant to spend money or have to find the best deal even if it means driving across town? A critical aspect of love and money is knowing your attitude, as well as that of your partner, is an important first step.

Working Together. Often one person in the relationship manages the bills. I suggest that couples talk about their expectations and who will take responsibility for specific money-related chores. Maybe one person is more comfortable with online bill pay and downloading updates into Quicken, but it’s important that both parties are kept up-to-date and involved in decision making. A good friend of mine abdicated control of his finances to his wife, and she hid her shopping addiction. Fast forward several years to a nasty divorce, he’s now responsible for half of the $70,000 of the credit debt she accumulated before leaving the relationship. Talking about finances during weekly meetings help keeps everyone in the loop and on track. Limit these discussions to 30 minutes so they are short, sweet and on topic.

Financial Therapy. If you can’t find middle ground, maybe you need financial therapy. As a daily money manager, I know many of the psychological triggers related to managing money. Avoidance typically compounds the problem, and outright confrontation can damage the relationship. Find ways to communicate clearly and respectfully. If you can’t, seek outside help.

Want help in talking with your sweetie about love and money? Then schedule a free 30-minute consultation with Fiscally Fit, Inc. Email me at Alison@fiscallyfit.us or call (650) 965-4090 for a no-cost, no-obligation appointment.

Posted in Caring for Seniors | Leave a comment

10 Signs A Senior Needs Assistance (6 thru 10)

Posted on February 7, 2011 by alisonsalisbury

Last week I shared the first 5 warning signs indicating the need for senior assistance. Here’s the second installment of what to look for the next time you visit an aging loved one. Many older adults worry about staying in their home; concerned about losing their independence or leaving their home, they try to hide issues or problem areas from their friends and family.

To help you identify if your senior loved one needs assistance, be on the lookout for these warning signs:

Sign #6: Signs of Injury. Bruises and scratches could be evidence of falls. Seniors who’ve fallen are at greater risk for repeat falls leading to more serious injuries. To the contrary, many seniors may be taking blood thinning medications that make bruises appear worse than they really are. If in doubt, consult a physician.

Sign #7: Disorientation. Confusion about time of day or difficulty navigating their surroundings away from home can be a telltale sign that senior assistance is needed. On an outing such as shopping or at a restaurant, observe if they can walk alone and how they adjust to new situations. Often the elderly function fine at home, but physical or mental challenges are more apparent in less familiar settings. The same holds especially true for driving.

Sign # 8: Community. Neighbors, friends or those who work for the person in your care may notice changes in behavior. Maybe they go out less than usual, or not at all. Perhaps papers and mail are stacking up. Check in with others to see what they have observed and compare notes.

Sign #9: Finances. Bills routinely left unopened or unpaid indicate serious issues. Setting up some simple systems may address this concern, but disarray could be a sign of cognitive decline or depression.

Sign #10: Predators. Older seniors, especially those living alone, are more vulnerable to con artists. Falling victim to disreputable individuals who befriend or scam the elderly may indicate a senior’s judgment is failing. Be on the lookout for unnecessary or frequent purchases (e.g., catalog or home shopping networks). If you suspect elder abuse, check out the National Center on Elder Abuse at: http://www.ncea.aoa.gov

If you think senior assistance is needed for your loved one, paying bills, organizing important papers, and reconciling accounts, schedule a free 30-minute consultation with Fiscally Fit, Inc. Email me at Alison@fiscallyfit.us or call (650) 965-4090 for a no-cost, no-obligation appointment.

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10 Signs A Senior Needs Assistance (1 thru 5)

Posted on February 1, 2011 by alisonsalisbury

In my practice, I have the privilege of helping seniors while they remain in their home. Whether organizing important papers, paying their bills or managing in-home caregiver payroll, my clients’ number one concern is staying independent. Many seniors worry about staying in their home, and have become masters of denial or deception.

To help you identify the need for senior assistance, here the first 5 (out of 10) signs to look for:

Sign #1: Hygiene. Poor grooming or unmet basic self-care needs (bathing, clean clothes). Often these are early signs that someone is in declining health.

Sign #2: Nutrition. Unexplained weight loss is a sign of poor nutrition. Look for spoiled or inadequate food hinting a senior isn’t cooking or eating well.

Sign # 3: Housework. A home that’s dirtier or more cluttered than usual; piles of laundry or dishes may suggest something is awry. Hiring a housekeeper can help, but a poorly maintained house points to physical decline or depression.

Sign #4: Health. Maybe there’s just a general sense that something isn’t quite right, such as persistent fatigue or lack of interest in general. Follow your instincts and make a doctor’s appointment. Whenever possible, attend the appointment with the senior so you can offer information or hear the diagnosis/next steps.

Sign #5: Medications. Lots of unused pills in the cupboard – or confusion about how, why or when medications should be taken – are danger signs for senior assistance. Managing meds can take some initial set up (such as a pill box), but the need for reminders on a daily basis could mean bigger issues.

Next week I’ll post the last five warning signs alerting the need for senior assistance. Or, if you know a senior loved one needs help with paying bills, organizing important papers, and reconciling accounts, schedule a free 30-minute consultation. Email me at Alison@fiscallyfit.us or call (650) 965-4090 for a no-cost, no-obligation appointment.

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