Jill Russo Foster

Tips for Successful Personal Finances

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Cleaning Out

As you know, we have been cleaning out.  So far this year alone, we have made nine bags / boxes of donations – with more to come.  Our library’s book drive is coming up later this month and we have two full boxes of books to donate.

Here is a great article from The Hartford Insurance about decluttering your home when you are downsizing (our in our case just getting rid of stuff).

If you like to donate your items (that are of good quality) and that someone may reuse, think about what organizations in your area are in need of that type of item.  For example, cleaning out your linens closet (towels, sheets, blankets, etc. – think animal organizations).  Most non-profits have a wish list of items they can use in their website.  Don’t forget there are other options, you can sell items and or simple recycle or toss out.  My resources page has some listing of organizations that might help you to get this part of your clean out started.

Do you have any organizations that you think would be a good fit for my resources page, let me know.

 

Happy Birthday, Daylight Savings Time!

Today is the 100th anniversary of Daylight Savings Time!

Did you remember to change your clocks this morning?  So many change automatically, but we have a few that don’t – cars, stove and microwave. How about you?

Enjoy the extra day light in the evening.  It’s a sure sign that spring is coming.

Cutting The Cord – Step 1

I don’t know about you, but our TV, internet and phone bill keeps going up, regardless if you have negotiated with them or not.  I don’t want to keep playing the game of switching companies for a new triple play package each and every year.  I’m done with this!

So we have taken step one in the process of cutting the cord.  We just purchased a device to have our same home phone for a fraction of the cost.  We are in the process of having our number ported over over the next couple of weeks. It will be a minimum monthly cost for taxes and fees – about $5.00 per month versus $35.00 – that’s a big savings to us.

Once that is up and running, it will be time to cut the TV service.  No need to keep paying for channels that we don’t watch.  Over the years, we have reduced the number of channels and are currently just subscribing to basic, but it all adds up.  So there wasn’t anymore to cut out.

Keep reading for the rest of journey on cutting the cord.

What We Spend Money On

Last week I wrote about what we don’t spend money on.  Some of it may have surprise you.  But we don’t live by candle light and never go anywhere.  Today, I’ll share with you what is important to us and what we spend our money on.

Yes, we spend money on food – good food – healthy food – organic, free range, pasture raised food like our parents purchased.  We make most of our foods from scratch and have home cooked meals most nights and bring our lunches to work.  We rarely buy processed and prepared foods.  Once the weather starts to warm up, I start my vegetable garden.  It’s another way to have fresh food at a fraction of the cost. This is where we spend money.  I like to think of this as back to basics.  The same is true for our home.  We clean with home made cleaners, made up of vinegar, baking soda, essential oils and water.

We also travel.  We save most of the year to travel – sometimes local sometimes far.  But we do this on a budget and look for ways to save with deals, points, miles and rewards. We are in the process of planning a trip for 2020 right now. It may seem far away, but to get the lowest prices you sometimes have to plan the travel when it becomes available.  You may be aware of this with airfares that prices go up and up, the same is true for other travel plans.

What do you spend money on?

What We Don’t Pay For

As I have always said, money is about choices (that’s why’s it’s the title of my newsletter).  All money issues are about choices.  Should I spend money on this, should I spend it on something else or maybe I shouldn’t spend it at all.  The choices is yours.

With that in mind, I want to share with you what we personally don’t spend money or reduce our spending on in our household.  Some you may agree with and some you may not, but again it’s about choices.

Outside The Home:

  • Yard work
  • Spring and fall yard clean up
  • Snow shoveling
  • Gutter cleaning
  • Power washing
  • Rain barrel – we collect rain water and use this to water the garden and plants
  • Compost Bin – we compost so we can fertilize our vegetable garden

Inside The Home:

  • Cleaning
  • Trash / Recycle to the transfer station (this is not included in our taxes, it would mean paying a private company)
  • Movies / Magazines / Books and more – we use our library and the library apps (Hoopla lets us watch movies that we would typically have to borrow from the library, right on our TV without leaving our home)
  • TV – we have reduced our cable TV to basic
  • Bill Pay = we pay online through our bank and this saves us postage
  • Greeting Cards – online as well (no more paper cards and postage)
  • Mail – we have greatly reduced the amount of unwanted mail we receive over the years

Products That We Have Replaced:

  • Dryer sheets with reusable wool dryer balls
  • Plastic containers with glass storage containers / canning jars
  • Cleaning products / air fresheners with vinegar, baking soda and essential oils
  • Plastic Bags – our town has eliminated plastic bags in favor of a reusable bags (if you forget you can get paper bags from stores)

I have shared with you some of the things we do in our home.  For us, it’s not about the things.  We want to experience more – time with family and friends, traveling to new places to explore, meeting and making new friends and more.

 

 

What We Are Doing This Winter

Each winter, we clean out stuff.  We seem to accumulate so much during the year.  We make piles – some for donations, some for sale and some just to recycle and/or toss.  This year has been different.  We are really cleaning out, almost like moving or downsizing our lives.  We look at items and ask “do we need this”, ” what purpose does this serve” and more. This has actually helped us to make a decision.

For example, I got a screaming deal on a new winter coat – 80% off in January.  Instead of just adding to my closet, I donated two of my coats from my closet.  When we bring in something new, we at least get ride of another something (and maybe more).

Right now, I am reading Joshua Becker’s The Minimalist Home and working through this.  We are tackling the living room first (as he suggests).  We have sold our VCR / DVD, and our donating  VCR tapes and/or DVD’s to our local library’s book drive coming up in early March.  Really, how many times have we watched them?  How much money have we spent on these alone?  Time to rethink our spending habits.

Freeing up the stuff is also freeing up new energy / opportunities.  I can’t wait to see what is coming our way.

Are Your Ready For Tax Time?

It’s that time of the year that we start to think about taxes.

You are waiting to get your W-2’s, 1099’s and more, but there is still time to make tax moves for 2018.

Don’t forget it’s not too late to make your retirement contribution for last year. You actually have until April 15 to make your contribution for last year, if you haven’t maxed out your contribution for the previous year. This is turn could lower your income and may turn owing on your taxes to a refund.

Ask your accountant to do this to see if you can benefit from this. It never hurts to ask.  Personally, we have a tax meeting between Thanksgiving and Christmas to see where we stand, before we receive the actual tax documents to see what can and should be done.

First Together Then Apart – Now What?

In our last issue, we discussed whether you should blend your finances when you get into a relationship. Money will be your biggest source of friction, and having boundaries doesn’t hurt. I listed some of the different financial relationships couples choose. There are different options besides “What’s mine is mine and never ‘ours’ or “It’s all or nothing or I’m out of here.”

Sometimes your best efforts to create a life together fail, and the relationship ends. Today, we’ll discuss how to unblend your finances. Whether you decided to share all of your accounts, or only share expenses, you should separate your finances as soon as possible, because you can be sure that someone’s name is on the wrong paperwork.

Take a look at your…

  • Rent or Mortgage: Who is on the lease agreement or mortgage? It should be the one who actually lives there. Ignore that piece of wisdom and risk having your home sold out from under you.  Your name shouldn’t be on there if you don’t live there.
  • Utilities, cable, and cell phone: Whose name is on the accounts? They should be in the name of the person using them. If you don’t transfer ownership, you could have your utilities cut off without notice or worse yet – have collection accounts on your credit that you didn’t even know about.
  • Insurance: This includes car, apartment, home, life, and medical. You don’t want to be without insurance, and you don’t want your money going to the wrong person if you don’t update your beneficiaries.
  • Credit cards and loans: Do you want to have your credit affected by charges that aren’t yours, or be forced to make payments on a car you don’t use?

“But Jill,” you say, “these all sound like things that happen in a hostile breakup. We’re not like that.”  Even if your breakup is friendly, and your ex is as trustworthy and competent as a super hero’s alter ego, you still need to separate your accounts to protect yourself in case something happens to one of you. If one of you dies, remarries, or is mentally incapacitated, the law won’t recognize verbal agreements or promises. They only see whose name is on a piece of paper.

Let’s talk about verbal agreements. Let’s say the house and car loan are in your name, but you want to be nice. You don’t need them, and your ex does. Your ex has agreed to make payments, so it’s no big deal, right?

Wrong. Your credit will take a hit with the first missed, or late, payment. And, you may not be able to get a new car or house for yourself because your debt to income ratio is too high. The bank won’t take verbal agreements or divorce decrees with your ex into consideration when you apply for your loan.

Here’s something else to think about: Can you maintain your current lifestyle if you live separately?

If you end up with the house or the car, can you afford the payments? Can you pay for the utilities, the maintenance and the insurance? You may have to make tough decisions, because you could be without the things you need to live if you don’t plan ahead.

Too many people have  found themselves temporarily homeless, or had their credit ruined, or worse bankruptcy after a breakup. Don’t let this happen to you.

Love and Money

In honor of Valentine’s Day, let’s talk about relationships and finances.  When you get to that point in a relationship where you are discussing finances, what should you do?  Should you have joint accounts or separate – you get to choose?  Here is some of the thought process for both:

First of all, you may choose not to blend your finances at all. Many couples keep separate accounts and actually have happier and more successful partnerships because there are fewer arguments about who spent money on what and who overdrew the bank account. Others choose to handle their money and debts together, and they do just fine. The choice is yours.

Look at your habits and goals when you consider whether to combine your accounts or keep them separate:

  • How does each of you handle savings and debt repayment? Do you have similar philosophies, or are your bank balances mirror opposites, with one carrying a large debt balance and the other carrying a large savings balance?
  • Do you have the same financial goals? Or, is one of you saving mainly towards retirement, while the other wants to save for amazing vacations and a nice car.
  • Does one, or both, of you have any issues that you would bring into a blended financial arrangement? For example, are there any debts that are currently in collections or that were charged off; bankruptcy; judgments; wage garnishments; or tax liens?

Some people find this subject to be a touchy one.  But, keeping separate accounts isn’t about holding out, or being less in love. Sometimes, it’s about protecting each other and making decisions that will carry you furthest towards your mutual goals.

If You Have Separate Accounts, How Do You Split Expenses?

Most people assume 50/50, but there are other options. You could choose different percentages based on incomes, family size, habits and hobbies. For example, if you have shared custody of your 3 kids with a former partner, then you might pay a higher percentage of the food bill. If your hobby raises the electric bill (gaming, fish tanks, etc.), then you might pay a higher percentage of the utilities. You don’t have to use percentages – you can divide up the bills, where one of you pays for this expense and the other pays for that expense. The choices are as varied as the couples who make them.

The bottom line is that you need to make informed choices that are right for you individually and as a couple. Money is the biggest source of friction in relationships. Have the conversation before you get married or move in together, so you know what to expect ahead of time. If you’re already living together, it’s not too late to make changes.  Remember that this isn’t set in stone.  Life changes and so do your finances, so revisit them on a regular basis and make the necessary changes for what is going on in your life now.