Fee-Only Financial Planner

Fee-only financial planner category: A collection of blog posts on fee-only financial planning topics by Holly Donaldson, CFP®.

As a Child-Free Elder, Who Will Be On Your Team?

“Who will take care of you when you’re old?” someone once asked me when I told her I had no children.

It seemed like an old-fashioned kind of question. Nevertheless, it caused a mini panic attack.

Knowing the statistics, I had made the vague assumption that I would need to make arrangements for care, but something about her question made that statistical probability more real.

About 14 percent of 40- to 44-year-old women had no children in 2018 – up from about 10 percent in 1980, U.S. Census data shows. This is and will be an issue for millions of Americans.

As anyone who has served as a caregiver knows, there are four main questions to ask from the beginning. Answering these can lead to the formation of an elder care support team. The team members may come from two areas – friends and family, professionals, or both.

  • Where will I live?
  • Who will make medical decisions for me?
  • Who will handle my finances?
  • How will I get transportation?

Team Member 1: Where will I live?

The first part of figuring out the team is to know where you will be living. The vast majority of Americans want to age in their homes. For some people that home might be the place they have lived for several decades. If so, then the team member will likely be a home health care company.

For others, home might be a place they move to – with a supportive community, but not a facility (perhaps at first). If that’s you, building a network of friends and professionals in the community can be one of the best ways to reinforce your support team.

Although it’s not in many people’s plans, sometimes aging at home isn’t an option. For people aging without children, it’s more important to get to know assisted living and continuing care facilities, and figure out how you would pay for them. (For myself, I purchased a traditional long-term care policy. But that doesn’t mean that is the right solution for everyone.)

Team Member 2: Who will make medical decisions for me if I can’t?

Preferably someone close by. Ideally this person could be available at a moment’s notice and will not have to travel far to attend appointments with you.

Having a strong primary care physician relationship is also highly beneficial. Some doctors, especially those who specialize in concierge medicine, can and will serve as your legal health care surrogate.

Team Member 3: Who will handle my financial affairs?

Many attorneys recommend having a different person named for financial matters than for health care decisions. As aging progresses, it’s a lot to ask of one person to handle bill paying, money management, and doctor appointments (as anyone who has served as a sole caregiver can attest).

Money management involves several duties. To name a few,

  • Paying bills and making renewal decisions (such as memberships, subscriptions, and/or insurance policies)
  • Making gifts
  • Making transfers between accounts, such as taking IRA withdrawals
  • Managing investments

Your financial team might involve two members – someone who does the day-to-day management, plus a professional investment manager. Most professional investment managers do not provide billpaying and cash flow management. Professional investment managers may charge a fee that is a percentage of the amount they manager, or a flat fee. If a friend or family member is taking over the day-to-day, it’s important to pay that person a fair fee, too.

Or you can find a fiduciary who will cover it all. Trust companies are one example of fiduciaries who will handle all financial duties if they are named as trustee or co-trustee on your documents.

My choice for now is an independent fiduciary. She happens to have a law degree and serves in this capacity full-time. Her services won’t begin unless I’m alone and losing the ability to handle things myself. Hopefully that’s a very long time from now, if ever.

Team Member 4: How will I get transportation?

If you move to a community with many transportation alternatives, you might not need a separate team member for transportation. This is my goal – a walkable community with good public transportation alternatives. The EPA even publishes a National Walkability Index.

But if you are staying in a home or community without many alternatives to your own car, and you don’t want to use ridesharing with strangers like Uber or Lyft, you could assemble a network of friends and acquaintances on whom to rely. So together they will be your transportation team member.

How can I make my affairs easier to manage for the team?

Consolidate and simplify with one financial institution. It will be far easier for your financial surrogate, and the institution may even show you some extra appreciation. Some people are concerned that this is not being “diversified.” Nowadays, most institutions can hold a diversity of cash and investments all under the same roof. Just make sure to keep under the FDIC limit in any bank accounts.

Use the health apps provided by your healthcare providers to give easy access to your electronic medical records.

Have all of your digital passwords in one digital password manager. Most people don’t realize they have on average over 200 accounts with passwords. See “Document Your Digital Assets.”

How do I make it all legal?

Once you have decided who you would like to name as your surrogates, have either a durable power of attorney (DPOA) or living trust drafted by a board-certified estate planning attorney. (See “Do I need a trust?” for more on the topic of trusts.) The same attorney will often also draft your living will and healthcare power of attorney, too. For qualified attorney recommendations, check for your local chapter members of the National Association of Estate Planning Councils.

For more information on planning for aging, check out the e-book, How Does Your Money Flow? A Guide to Common Saving, Spending, and Sharing Decisions (Porchview Publishing, $3.99, available in e-reader-friendly formats). Or, join the list for our free award-winning monthly e-letter, “The View From the Porch.”

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How To Let Go of Money Self-Doubt

blank stare or self-doubt emoji

How to let go of money self-doubt:

What is money self-doubt

Money self-doubt is an inner belief that one cannot trust themselves with a decision about money.

Sometimes these beliefs operate in the background, quietly driving decisions when we don’t realize it.

Other times they’re front and center.

What does money self-doubt sound like?

Money self-doubt beliefs often sound like critical messages:

  • “I knew I’d screw it up.”
  • “I’ll never be good with money.”
  • “If I can’t manage my own finances, I’m a failure.”  
  • “Why am I so stupid with money?”

Money Self-Doubt Origins

Where does money self-doubt come from? 

It could be a single traumatic event or a repetition of harmful moments that lead to flawed beliefs about our financial capabilities. One time being taken by a scammer, or many times being told by an abuser we aren’t capable.

Without counterbalancing mantras like,

  • “You’re still OK.”
  • “You just made a mistake.”
  • “You can do this.”

the self-doubt can take hold.

Society and media also don’t help, offering a choice of money self-image as either, “good with money,” or not. Individual instruction is rarely given in school, or in families, much to our society’s detriment. While financial professionals are often proficient in finance, many are not good educators. A few even try to make money more complex than it is, to keep clients feeling less than sure about themselves.

Case Study: Sondra (not her real name) is a highly educated and accomplished professional. Her parents came from Depression-era families where money was tight in their younger years. Money was never talked about in Sondra’s home, although she was given everything she needed. She grew up with the belief that her parents didn’t discuss it with her because they believed money was something she was not capable of handling. When she went to talk with a financial advisor, he threw so much jargon at her that she was too uncomfortable to admit she didn’t understand what he was talking about.

Money Self-Doubt Results

Without realizing these beliefs exist, we can allow them to influence what actions we take or fail to take. Self-doubt can affect who we allow into our lives, and who we don’t. It can affect our choice of career. Or how we spend, or choose not to, on our own needs, wants, and wishes. Ironically, money self-doubt can lead to overspending with some people, and over-deprivation with others.

Sondra chose a career where she was assured a salary and the chance of a bonus if she worked hard enough. She worked longer hours than she wanted to. She lived minimally, foregoing many comforts and rewards of her hard work. Her dreams of having more work-life balance were put on hold because she never felt financially secure. In her personal life, she chose friends and partners who also didn’t talk about money, leaving a gap in her closest relationships.

How To Let Go of Money Self-Doubt

If you’ve been operating under flawed assumptions, and now you know it, you’ve taken the first step to reset your relationship with money.

What else can you do? Here are 4 suggestions:

1) Be aware of body messages. Self-doubt, sometimes manifesting as shame, has a feeling to it. It might be tightness in the chest, throat construction, shortness of breath, nausea or butterflies. Instead of trying to get rid of the feeling, breathe through it and name it: “I am feeling shame/doubt about a money issue.” Redirect your thoughts to positive truths: You are smart. You are capable. You know how to ask for help. This is something you can handle.

2) Ask yourself a simple question: “Is this true?”

For example if you have a belief that “I’ll never be good with money,” and you had to prove that in a court of law, what evidence do you have? Sometimes asking this question can be one way to help our brain separate facts from fictional beliefs.

3) Call someone supportive to talk about your feelings. (But make sure they truly are supportive.) If you’d like professional help specifically about money psychology, check out the Financial Therapy Association.

4) Become aware of those in your life who are too willing to reinforce doubt-based messages – family members, partners, friends, or even (especially) financial professionals. Instead, seek the company of those who say, “I am confident you can handle this,” and will walk alongside you, not put themselves ahead or above you.

After talking with a friend, Sondra decided to educate herself about money. She began to read books that explained things simply, and take online courses that took a simple approach. Patiently, she interviewed many financial professionals. The more she talked about money, the more confident she became. In the end, she found someone who prioritized her financial education and independence. She began to feel more secure, and gained the courage to consider a daring career move.

The Gift of Letting Go

Letting go of money self-doubt can be one of the greatest gifts we give ourselves to reach peace and security about our financial future.

For more on unspoken money messages see Chapters 2 and 3 of The Mindful Money Mentality: How to Find Balance in Your Financial Future, or this 5-minute video with mental health counselor Ken Donaldson on Money Shame.

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Read more about the article 6 Top Books For Booklovers – 2022 Edition

6 Top Books For Booklovers – 2022 Edition

books

6 top books for booklovers: What books made an impact on you in 2022?

Every March this blog publishes a few selections from the prior year’s reading. For 2022, below are 6 favorites from finance, fiction, and self-help.

(For past recommended books, check the Resources page or enter “books” in the blog search.)

Psychology of Money

The top book recommendation this year is The Secret Meaning of Money: How To Prevent Financial Problems from Destroying Our Most Intimate Relationships, by Cloé Madanes. Ms. Madanes is a family therapist, not a financial adviser. But she gets to the heart of what ails so many couples and families – money behaviors and beliefs. Although published in 1994, there’s nothing outdated about her observations and advice. She covers common money mistakes in the lifecycle of a couple, from younger years, through children, divorce, second marriages and stepchildren, long-time marriages, and end of life.

Understanding the impact of one’s upbringing on behaviors and beliefs goes a long way toward beginning to break patterns that no longer serve us. Poverty, eviction, and even great wealth all have childhood impacts that can be seen in adult relationships. The book concludes with chapters on using money in positive ways, and a list of common irrational behaviors rooted in money and power family dynamics.

Fiction

On the fun side, here were my 2 picks for fiction, out of about 20 total.

First is The Storied Life of AJ Fikry, by Gabrielle Zevin. In one word, it’s sweet. AJ Fikry is a recently-widowed, lonely, angry, snobbish owner of a bookstore on Block Island, Rhode Island. He gets entangled in a community problem. There are financial issues at stake. A new young book wholesaler from Boston enters and things get more complicated. Of course it’s heartwarming to read about love emerging between two people, but even moreso to read about a bigger sort of love emerging within a community that found itself divided.

I also appreciated that finances, so often left out of both fiction and non-fiction, were a front-and-center concern. How will AJ manage to keep the mortgage payments going when no one is coming to his store? How could his love interest possibly afford to leave her job in Boston and move to Block Island? Zevin tied everything up at the end with a slight twist that left me smiling.

The second novel, Bring Me Back, by B.A. Paris, is a psychological thriller. It kept me guessing the. whole. time. The constant twists and turns reminded me of an old movie, “Death Trap,” with Christopher Reeve. You’re never sure who’s the good guy, who’s the bad guy, or perhaps they’re both playing bad-guy cat and mouse with each other? What do you mean they’re not dead after all? The appearance of creepy emails felt like a new tool for psychological suspense. This one had a resolution that was both surprising and satisfying.

Life Improvement: (also known as “self-help”)

Two psychology books made the list this year: The Illustrated Happiness Trap: How to Stop Struggling and Start Living, by Russ Harris and Bev Aisbett and The Body Keeps the Score: Brain, Mind, and Body in the Healing of Trauma, by Bessel van der Kolk.

The Happiness Trap Illustrated is a short collection of cartoons illustrating feelings and stories that we make up as part of modern life.

The cartoons begin by depicting common myths about happiness, such as

  • “Happiness is the natural state for human beings.”
  • “If you’re not happy, you’re defective.”
  • “You should be able to control what you think and feel.”

Importantly, the cartoons allow a quick grasp of sometimes heavy emotions. Because they are cartoons and not stock photos, they are relatable by just about anyone. Part of the balm in the book is the message that lots of people in today’s world are challenged by similar issues. Exercises throughout the book help to focus on one issue at a time and practice working through it. This is a good book to just open up to any page anytime and get a little worthwhile advice, delivered in a lighthearted way through cartoons.

The Body Keeps the Score, by Bessel van der Kolk, is focused on trauma. Van der Kolk’s work stemmed from the idea that our bodies store traumatic experiences physically in our tissues. Without proper attention and treatment, the trauma eventually shows up as a medical crisis. Indeed, van der Kolk’s research worked with war veterans and domestic violence survivors. Some of the cases are hard to read.

Trauma doesn’t apply only to physically violent encounters. Therefore, someone who has experienced verbal abuse, neglect, betrayal, or abandonment may also have stored trauma. Van der Kolk walks through ways to treat even long-ago experienced traumas with common therapeutic methods that deliver long-lasting relief. A big takeaway is that trauma survivors often downplay physical symptoms. So paying more attention to pain and discomfort now might save someone from a more serious medical event down the road.

What books were life-changing, or just entertaining, for you in 2022? Leave a comment below.

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A CFP® Who Bounced Her IRS Check

A CFP® who bounced her IRS check. That would be me.

Yes, I wrote a bad check to the IRS.

Accidentally, of course, but still. Behind my name are the initials “CFP,” for Certified Financial Planner™, so supposedly I’m some kind of financial expert. And yet, I did a very un-expert thing that even most financial un-experts do not do.

Brain Fog

The bad check was written in April 2014. The tax year in question was 2013, which was the same year I got an unexpected biopsy (which came out clean after several weeks), an unexpected audit by state regulators (which came out clean after several weeks), and an unexpected divorce (which came out after several weeks and much of it wasn’t clean). All of these – the biopsy, the audit, and the unexpected divorce – happened between August and November.

If you’ve ever been through one or more of the above, perhaps you can relate to the feeling of going through the rollercoaster of life, trying to act like a rational person, but getting hijacked by emotions. Wishing you could concentrate better, focus like you used to, but the brain just won’t cooperate. I wasn’t aware I was in that much of a fog. I thought I was keeping it all together pretty well, considering.

Until the IRS notice showed up.

“Check Payment Not Accepted By Bank: The bank did not accept the enclosed check for the following reason: INSUFFICIENT FUNDS. Please return the bottom portion of this form with a certified check…The PENALTY amount is…The current Interest Charge is...”

Shock and Shame

“Wut?” I thought.

My first reaction was to get mad at the bank. It only took a few minutes, though, to research there was no mistake. Shock, embarrassment, humiliation, shame. My jaw and knees dropped to the floor simultaneously.

I bounced a check to the IRS?!?

That’s when it dawned on me that the events of 2013 were still affecting me or I wouldn’t have written a check on one of my new post-divorce checking accounts without putting any money in it first.

So, the next paragraph caught my eye.

“You can request penalty relief by explaining why you believed the bank would accept the Check and by providing any supporting evidence.”

My backbone straightened up. Although it was not the bank’s error, I needed to plead my case to keep my sanity.

Making the Case for Penalty Relief

It turns out the IRS will seriously consider applications for relief, although that doesn’t mean they will blanketly grant them.

First, I immediately deposited more money in the account and had the cashier’s check, including the penalty and interest, sent.

Then, I sat down to write to the human being who would be reading my request. I crossed my fingers that it would be a 40- or 50-something who had been jilted in a 20+ year marriage. There are quite a few of us out there, and maybe even a few who work for the IRS. I fell on my sword, admitting the mistake, and explaining temporary loss of rational thinking.

The bottom line is that I got a partial waiver.

The main point, however, is that I refused to let the IRS add to my stress. The notice was a wake-up call that I was under more stress than I knew, and I made a conscious decision not to add to it.

Correspondending with the IRS

My letter was dated May 22, 2014:

“I am writing for penalty relief….the bank did not make a mistake. I made the mistake. At the end of 2013 I was suddenly divorced after a 26 year marriage. Perhaps if the person reading this has ever been through such an experience, you might understand that in getting situated with my new life, including my finances, I have made a few absent-minded mistakes I would not normally make. In this case I forgot to fund my new checking account.

As requested by your notice of April 29, 2014, I have sent a cashier’s check for the entire amount due including penalties and interest.. I hope the IRS will examine my history of prompt payment for 30+ years and consider this in your determination for relief.”

On May 26, 2014 I received a notice which said:

“You have unpaid taxes for 2013” which showed the amount due, plus the following:

“Failure to pay proper estimated tax penalty – $58.00

Dishonored payment penalty – $65.54

Failure-to-pay penalty – $32.19

Interest charges – $10.87“

Because they had cashed my cashier’s check by then, I decided to wait. Maybe they hadn’t read my letter yet.

On June 12, 2014:

“Thank you for your inquiry dated May 22. We have accepted your explanation of why the bank didn’t accept your check…and we removed the penalty.”

Whew, ok. Sigh of relief. Will they actually refund the penalties, or what? Again I decided to wait.

On July 2, 2014:

“We received one of the following items from you on May 27, 2014…We’re working on your account…we need an additional 45 days to let you know what action we are taking… You don’t need to take any further action now…“

Wut? What did this mean? I thought I was ok, and now they are thinking about it? Again, because I excel at going down worry rabbit holes, I put it aside.

On July 18, 2014:

“Thank you for your recent letter dated May 22 that asked us to remove the penalty for failure to pay…We are pleased to inform you that your request to remove the penalty.. has been granted. However, this action has been taken based solely on the fact that you have a good history of timely filing and timely paying. This type of penalty removal is a one-time consideration….”

The final notice, on August 4

“Changes to your 2013 Form 1040: Decrease in failure-to-pay penalty. You are due a refund of $32.19.”

So, I didn’t get all the other fees/penalties waived. No sympathy for the divorce part, but appreciation for the 30+ years of paying on time.

Well, by then it didn’t matter anymore. I had advocated for myself and received a compromise. It wasn’t worth another minute of worry or effort. Heck, I was just glad I hadn’t bounced checks to anyone else that year.

The Bottom Line

Nearly all of us will have a time in our lives when our brains get discombobulated – divorce, death, health issue, job loss, new baby, relocating, and/or retirement. When we mess up, it’s important to let our minds rest, go easy on ourselves, and be strong enough to ask for help and forgiveness. Even financial “experts” make head-slapping mistakes.

And sometimes, even the IRS respects that.

For more mistakes I made so you don’t have to, subscribe to the award-winning monthly e-letter, “The View from the Porch,” or see the book, The Mindful Money Mentality: How to Find Balance in your Financial Future.

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Honey, Ain’t Money Funny? 4 Conversation Ideas

Couples and money honey ain't money funny

Honey, ain’t money funny? Sometimes, not so much.

As Valentine’s Day came and went, a couple struggled with questions about consumerism, the meaning behind gifts, and how money affected their relationship. Whether it was financial inequality, overspending, or miserliness (a la Scrooge), humor was hard to find at a time when they were surrounded by hearts-and-happiness messages.

What can couples do to have a better relationship with money? Following are 4 ideas.

As you try each one, it’s a good idea to plan a special fun reward or celebration at the end. The more you practice at these, the easier the conversations will get. You may find your differences become predictable, manageable, and even laughable.

Idea 1: Monthly Money Date

For monthly money dates, quickies are best. These are for checking the dashboard indicators in your household finances. Agree to limit the conversations to about 15 minutes.

Build in fun and humor by focusing on your progress, positive wins, and gratitude for what you’ve got so far. For big ideas and thorny issues, make a separate date to discuss those using one of the following 3 formats. Then move on to the “real” date part!

A 2 1/2 minute video on 3-Part Money Dates can be found here: https://www.youtube.com/watch?v=7TWFKfF0vRQ.

Idea 2: 48-Hour Relationship Conference

No you don’t have to talk about money for 2 days. What a buzzkill!

Instead, in a Relationship Conference, each partner takes a turn being a pure listener to the other partner’s issues. Being the listener in a relationship conference means saying nothing while your partner talks. You can decide on the timeframe, but make it somewhere between 15 and 45 minutes. You can take notes.

After the first partner shares, take a break from anything money-related for 24 to 48 hours. Allow thoughts and feelings to arise to reflect on what you heard. Then reverse roles. This is the first partner’s turn to simply listen. Then wait again for whatever timeframe you decide – 24 to 48 hours.

Finally, take turns to summarize what feelings and issues came up. Make sure you give space for listening to each partner’s perspective, checking in to make sure you heard them well.

Remember to have an activity planned in advance to celebrate your ability to tackle tough stuff.

Idea 3: Take Turns Active Listening

Another option is to take turns all in one setting being the active listener. Active listening means being fully present to your partner’s issues and emotions without bringing up your own responses or emotions. (Tip: This is really hard for most people who have never done it before.)

You do this by

  1. repeating back what you heard,
  2. checking in to make sure you got it all (“Did I get it all?”), and
  3. asking to hear more about the emotions underlying each statement (“You said you felt excluded. Tell me more about that.”) Once your partner agrees they feel completely heard and understood, then it’s your turn.
  4. Again, remember to have something planned in advance to celebrate and give yourselves credit for your progress with active listening about money.

Idea 4: Ask For PracticeHelp

Are there some money issues in your relationship that seem too difficult to talk about on your own?

Sometimes each of these exercises work best if practiced with a counselor first. And that’s ok. Sometimes we need training wheels before we’re ready to ride the conversation bicycle on our own. Give yourselves the gift of an enhanced relationship by getting some professional tips on how to have a healthy conversation about money.

Finally Feel Free

Remember when you learned to let go of the bike’s handlebars? Imagine feeling that free in your relationship with money and each other. One’s Scrooge to the other’s spending might actually be something you learn to laugh about for years to come.

You know you’ve arrived when you find yourselves saying, “Honey, ain’t money funny?”

For more tips on the psychology of money, subscribe to our award-winning monthly e-letter, “The View From the Porch,” at https://bit.ly/3t2uwfn.

Or, check out Holly’s book: The Mindful Money Mentality: How To Find Balance in Your Financial Future.

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When She’s Better Off Than He Is

when she's better off

When she’s better off than he is: Some couples find finances difficult to discuss when she makes or has more money than he does.

In the July/August 2019 issue of Psychology Today, Esther Perel, a New York psychotherapist, said that women’s liberation has freed them from dependence on men. “But it hasn’t prepared women for men’s dependence on them. Women often have a lot of resentment when they find themselves responsible in the way men have for generations.”

In his blog post, “Why Wealthy Divorced Women Don’t Remarry and Men Do” dating coach Evan Marc Katz wondered whether women might rethink their expectations for the man’s financial contribution to the relationship. This makes sense especially when all other aspects of the relationship are equal. After all, many wealthy men remarry to women who are not as financially well off, and why? Companionship, compatibility, and physical attraction.

If a wealthy man is happy to pick up the tab for trips and dinners, why aren’t wealthy women?

Case Studies Where She’s Better Off

Here are a couple of cases to illustrate the dynamic. I asked Licensed Mental Health Counselor Ken Donaldson for his thoughts on some fictional case studies.

Alan and Donna: Donna is a 53-year-old professor who became disabled after an accident. Her disability is not evident to most people, but at any moment she could be hospitalized. She received a large settlement from the accident. She is making a new life for herself and wants to live well while she can. Alan, her 55-year-old boyfriend, is a painter. He is handsome, romantic and kind to her. Alan does not know Donna’s financial situation. He does know he cannot always afford the restaurants where Donna wants to eat, though. Much of the time she picks up the tab. They both feel awkward about it.

Janet and Harold: Janet is a 52-year-old retired author. Her books have sold enough copies that she can live comfortably without working. Her boyfriend, 58-year-old Harold, had an IT career before he was downsized. Since then he has not found a new job or career that seems to be a good fit. Janet loves Harold’s athleticism, his sense of humor and tenderness. They connect on many levels. The problem is, she wants to travel with him to places like Australia, Alaska, and Europe. Neither Harold nor Janet like the idea of Janet paying for the whole trip. Harold does not know Janet’s financial situation, but he does know she is better off than he is.

Q & A With Relationship Counselor Ken Donaldson, LMHC

Q: How does avoidance of the activities that both couples want to do affect their relationship?

A: This would only add to distance in the relationships. Although both people will benefit from doing separate activities that they enjoy, there is much to be lost by leaving the other out when it is motivated by fear and/or avoidance.

Q: How could each couple stay together in a healthy way?

A: Every healthy, harmonious and lasting relationship is built on the HOW factor: Honest, Open and Willing. Those are the cornerstones that prevent the termites of deceit, deception, distance and breakdown. I believe these cases both require a lot of extended processing and perhaps the assistance from both a marriage counselor and a financial expert would be extremely helpful.

Q: What kind of paradigm shift might they try, and how could such a shift be brought about through seeing a professional?

A: As mentioned above, a qualified marriage counselor, especially one who had experience with these types of cases, can only help. Openness, although not rocket science, is always the best policy in cases like this. If either or both can’t handle “the truth” it says something about the foundation of the relationship, which signals that it needs to be strengthened. Harville Hendrix, author of Getting the Love You Want, has some great dialoguing tools I use often with in couples counseling and in all conflict resolution and intimacy-building situations.

Q: What is your opinion about the line between sharing financial information and keeping financial secrets?

A: It is a fine line at times, but it is also based on trust. Trust is probably the cornerstone of all cornerstones. It’s like poker: Sometimes you have to hold your cards for a long time before you show them (or fold them). But, when the time is right, right action is the only move.

Avoidance leads to more avoidance, and openness leads to more openness. However, it is all based on the level of relationship they want. If they only want a level “7” then maybe total transparency is not needed. But if they want a “10” then, again, nothing will be better than open, honest and willing.

Questions to Ask

Are there aspects of your financial relationship that you would rather keep at a “7” than a “10”?

How have you handled the transition from cards-folded to open-hand in your finances with a significant other?

What would you advise others in similar situations? Leave a comment here to help the reader community.

And if you’d like monthly tips on the psychology of money, subscribe to our award-winning e-letter, “The View From the Porch.”

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How I Work Virtually as a CFP®

How I Work Virtually

Although it’s more common to work virtually with a financial advisor than pre-pandemic, many people still have questions about it.

How secure is it to meet virtually? In the beginning of the pandemic there were security concerns about certain online platforms, more notably for telehealth visits than for financial meetings. But the platforms quickly invested in measures that enabled corporations, medical providers, governments, and everyday users to provide a secure place to meet. That being said, no platform is 100% secure. We began with GoToMeeting but now use the Zoom Pro platform because more clients are familiar with Zoom.

How do you get all the documents you need securely? We provide a secure link. You can upload as many documents as you like. We suggest uploading at least 2 weeks before the scheduled meeting.

Will I be able to see my plan clearly on a small screen? We don’t recommend using a smartphone, however, anything from tablets/iPads to full monitors work just fine. We can manually zoom in and out on our end to make the content more viewable on your screen.

What if I need to share my own documents or spreadsheets during the meeting? We can enable two-way screen-sharing so you can share your own documents.

What if the technology breaks? Hey, it happens! We have a couple of backup plans.

What is the backup plan? If the problem is audio, switching to speakerphone is pretty seamless. If the problem is video on one end, we can usually figure the issue out within a few minutes. When there is a video problem on both ends, that usually indicates an internet or connection problem. Although rare, if that happened, we would suggest rescheduling but proceed as audio-only if that’s your wish.

How are you audited or regulated from your home office? We are regulated by the state of Florida who now conducts audits virtually.

How do you keep distractions to a minimum? It’s difficult when the view of the yard, birds and butterflies is so nice! Fortunately the location is quiet except for the occasional leaf blower.

How can I have the best experience meeting virtually with a financial planner? Great question! In the same way we would have you as a guest in person, we want you to be as comfortable as possible during your meeting. Here are a few tips:

  • Consider crafting the ideal spot for you. That might or might not be your office or desk chair. Couches are cool. So are pillows and pets.
  • Dress more comfortably than you would for a meeting in person. Socks and sweatsuits encouraged.
  • When more than one person is participating, we find it makes for a better experience if you each have your own screen. If you are in the same room, turning off one device’s audio will eliminate echo and still allow for us to hear each other just fine.
  • Grab a beverage and your favorite snack.
  • If you feel uncomfortable at any time, don’t hesitate to ask for a break or a few minutes to change rooms/couches/chairs.

Working Virtually Has Advantages for You

People have shared how much they appreciate:

  • Time savings of not traveling to Seminole (no Howard Frankenstein bridge!)
  • Meeting in the comfort of their own home or office
  • Not feeling the need to get dressed up
  • Having their pets close by

Our hope is that by removing pressures of extra time and effort to meet in person, and being a little more comfortable in your own environment, some of the stress that can come with financial planning and decisionmaking is reduced.

What other questions do you have about meeting virtually? What have been your experiences, positive or negative, with virtual meetings? Share your comments and thoughts below, or tell us first-hand by contacting us.

Continue ReadingHow I Work Virtually as a CFP®

New Year: Got Your Notebook?

Keep important data in a Notebook

It’s a new year: got your notebook? You know, that one with all of your passwords, account numbers, doctor names, and that very important song that must be played at your funeral.

Yeah, that notebook. Where is it? It might reside digitally on your computer or in the cloud, or it might be a pile of papers in a file cabinet, or it might be in an old-fashioned 3-ring binder. The new year is a good time to ask: how easily can someone who needs it find it?

Who Might Need the Notebook and When?

Everyone needs a someone in mind for the notebook. Your someone is who will step in for you and help to handle things when you can’t. If an immediate someone does not spring to mind, consider asking a professional to be that someone – an attorney, accountant, or professional fiduciary, for example.

When will someone step in? At a time when you need the notebook, but can’t get to it. Like the new commercial for disability insurance, we can imagine all kinds of accidents and tragedies that might bring about a need for the notebook. Rather than dwell on those, let’s imagine that you are suddenly swept away on an all-expenses paid trip out of the country to a remote island with spotty cell coverage.

While you are whale-watching and snorkeling the reefs for an indefinite period, things still need to be handled back home. Bills to be paid. Taxes to be filed. Gifts to be given. People to be notified of your absence and introduced to the someone who is handling things.

What Goes in the Notebook?

In essence, the Notebook is a central place you keep information that your someone will need in case something happens to you.

Common and essential items in the Notebook include:

  • Your five basic estate planning documents: original will (drafted by an attorney in the state where you reside), living will, health care power of attorney, durable power of attorney, and HIPAA designations.
  • Advanced estate planning documents: trusts, partnership agreements, business buy/sell agreements, shareholder agreements, etc.
  • Insurance policies. ALL of them: life, long term care, health, property, car, boat, liability, and any others.
  • Contact information for professional advisers: attorneys, bankers, accountants, investment advisers, insurance agents, and (of course) your Certified Financial Planner™.
  • Also, if your adviser has an assistant or paraprofessional who knows you and your situation, write down their contact information and a little note to that effect. (“Sharon is the assistant and she runs the whole place.”).
  • All of your health care providers – doctors, dentist, optometrist, veterinarian (who is going to take care of Fluffy?). Put similar information by each one – what they helped you with and if any office or nursing staff know you and your history.
  • Important to remember also, anything handled online: digital password manager, online user ids and passwords, bank statements, investment accounts, real estate deeds and mortgages. So much of our financial lives nowadays keys off of our email address. Can they even get into your email? (See: Document Your Digital Assets for more online stuff to consider.)

Extra Items for the Notebook

In addition, not-as-essential items some people include are:

  • An “ethical will” outlining your values. This often gives family members guidance when they are unsure what you would want. Writer Susan Turnbull’s book, The Wealth of Your Life, can help guide you through this process.
  • An end-of-life health care management booklet, like Five Wishes.
  • An Aging Plan – describing your wishes for the potential time of life when you may need assistance with activities of daily living, transportation, and housing transitions.

Notebook Update Season

It’s a good time of year to check in on your notebook. The end of January brings tax notices from bank accounts, investment accounts, mortgage statements, health insurance, employers, IRA providers, and more. Take this opportunity to pull together scattered pieces of your financial life. Consider collecting everything not only for the accountant, but also for your family or special someone.

One way to keep the notebook updated is to check each tax statement and match it up with a corresponding account in the notebook. Perhaps you forgot about those I-bonds you bought on Treasury Direct – no paper statements, all online. Better add that account to the notebook. All those deductions for insurance from your employer – would someone know how to contact the insurance companies if needed? Then would the insurance companies talk to them? That contact info, power of attorney forms, and beneficiary designations are good updates for the notebook too.

Think of your notebook as a bread crumb trail helping your loved ones work backward from that remote island to the place where you are sitting with paid bills, up to date connections, easily-accessed email and your personal address book at your disposal. A little effort each year will save your someone(s) many headaches later.

Got a notebook you love already? Comment below on what makes it uniquely yours. Share your best ideas.

For more on this topic, see The Mindful Money Mentality: How To Find Balance in Your Financial Future. Struggling with issues mentioned here? Tell me more – Schedule a call.

Continue ReadingNew Year: Got Your Notebook?

Holiday Spending Hangovers

holiday hangovers

Holiday spending hangovers: What do holiday overdrinking, overeating, and overspending have in common? We can get stuffed in over our heads before we know it, leading to regret later. The holidays can test our temptation to overcelebrate. While holiday alcohol- or food-induced hangovers are commonly discussed, spending hangovers can bring about equal regret.

Thinking Ahead

To avoid regret, it helps to think ahead. You might call it an “awareness strategy.” What events are coming up that might bring about a temptation to overspend?

Nowadays, that strategy might start in October. Halloween is now the second biggest holiday for consumer spending after Christmas. What used to be a couple hours of candy collection with a homemade costume and a paper grocery bag is now practically a national holiday. Multi day trunk-or-treating. Elaborate costumes. Yard decorations needing extensions upon extension cords. On November 1, where does all the Halloween stuff go? In the attic, the garage, the storage unit, or the garbage? And what about the candy? Halloween often leads to sugar, spending, and stuff hangovers.

Next comes Thanksgiving, where we stuff ourselves with, literally, stuffing. Some then stuff our brains with football and TV. Some families stuff all the important conversations for the past year into a few hours at the table. The air is stuffed with emotions. And spending can often be a coping mechanism for difficult emotions. It seems all the Thanksgiving hangovers – food, football, TV, and feelings – start with stuffing.

And finally if you celebrate it, Christmas, the king of holiday hangover potential. Must-have new decorations, the tallest tree, fancy food, family gatherings, parties, gotta-get gifts, candy, cake, and alcohol all stuffed into a few short weeks. Moderation choices might start out strong. But decision fatigue can quickly take over. Come January, depleted bank statements and depleted emotions can bring on the same headaches as too much cookies and eggnog.

Thinking ahead to all of the opportunities to spend gives you a head start on avoiding regret later. Ask

  • What is coming up where I will want or need to spend on a holiday?
  • What does the spending event entail?
  • What are alternative ways to achieve my goal for the spending event?
  • Imagine it’s January. When you look at your bank and/or credit card balances, what’s a reasonable figure for you to be at then? Start with that as your goal.

Release Self-Judgment

Before launching into ways to criticize decisions before you have even made them, remember that it’s ok to splurge. It just takes a little thinking ahead, strategy, self-care and balance. Deprivation generally doesn’t work.

Mindful Spending Strategies

For some people, simply having a January bank balance goal is enough to help them stay focused throughout the season.

Others need more concrete ideas. Here are a couple:

  • Plan most or all of your shopping at one or two stores. Buy yourself a gift card for that store with the total amount you can spend that allows you to make your January goal. Ask for your remaining balance with each purchase. When the gift card is spent, you have made your goal.
  • The old-fashioned envelope approach. Withdraw the amount of cash that allows you to make your January goal. Put it in one or more envelopes, organizing by spending category. For some people, watching the physical cash dwindle is the best way to stay focused.

Keep Track

The gift card and envelope approaches are one way to keep physical track of how you are doing on your spending goal.

If you find yourself resisting or unsure about the idea of having a January goal, simply keeping track of your spending as you go can work, too, as a reminder to rein in overspending.

Weight Watchers has used this approach for decades. The best tool of the program for me was the daily journal. Logging what I ate every day had more impact on my diet decision making than any other single factor.

Similarly, when a group of experimental homeowners were given an electric meter next to their thermostat, they used 7% to 19% less electricity than those with outside meters.

So writing down what you spent each day can take the form of a note on your phone, or a physical notepad or journal.

Every bit of awareness can help.

Credit Cards and Overspending

What if you must use credit cards, or really like getting the points? (Although the points rarely work as well as cash back, but that’s another blog post.)

Using a credit card is like having the electric meter on the outside of the house. You never get to compare what you have spent to a predetermined goal. Additionally, psychology studies show that when used in stores, as the credit card is handed back to us it reduces the feeling that we have spent anything. Our wallet looks the same afterward.

To build spending awareness and still use credit cards, sign up for a daily or weekly reminder of your charges and the current balance. (Not all companies will do this, tragically.) Each day or week, transfer your charges for that period from your bank account. At the extreme, you might make 30 payments on your credit card over the holidays, but so what? It’s helping you avoid the hangover.

Public Service Announcement

And a final Public Service Announcement: if you’re concerned about hangovers of a different kind, you’re not alone. There is help. AA.org helps with all kinds of addiction. Al-anon.org is for friends and families of alcoholics or addicts. Or, call a local Certified Addiction Professional for more one-on-one advice.

See our Resources page for recommended books on the psychology of money.

Imagine getting through January with no hangovers!

Continue ReadingHoliday Spending Hangovers

Free Financial Mentoring: Savvy Ladies

empowered women

Free financial mentoring from Savvy Ladies

Savvy Ladies is a not-for-profit organization formed to provide free financial mentoring to women.

How does it do this?

An army of volunteers, to start. Any woman can sign up for a pro bono 1 hour mentoring consultation with a Certified Financial Planner™ on a wide variety of topics. Volunteers have also written blog posts and recorded webinars on specialized topics. All are available on the organization’s website, https://www.savvyladies.org.

What kind of topics?

Cash flow, investing, divorce, widowhood, caregiving, budgeting, debt, college, careers and more.

Who does Savvy Ladies serve?

Any woman of any background who has a question about money. Founder Stacy Francis recognized that, as women, we are more often in-the-dark about money issues than men. Many women have no one to talk to about it. Savvy Ladies creates a safe place where those questions can be asked and answered.

What is its goal?

More self-reliant, financially educated women. In psychological terms, “financial self-efficacy.” Having self-efficacy means feeling confident and resourceful enough to handle a problem or question. Note this does not mean having or knowing all the answers. It means having the confidence to know where you might find the answers, and that you will be successful.

Who are the volunteers?

The website features several of the many volunteer professionals. Recently as a volunteer I have spoken with women as far away as Colorado and as close as my home state of Florida.

What’s the catch?

No catch. Volunteer professionals do not solicit for business. After the one hour consultation, the recipient fills out a survey asking how well their question was answered. The volunteer also fills out a survey asking how well they thought the consultation went.

Importantly, Savvy Ladies has received the GuideStar Seal of Transparency. Not all charities are what they appear. For more information on checking up on charities, see: https://www.hollydonaldsonfinancialplanner.com/charities-and-giving/.

Want to see more ladies get financially savvy?

If so, here are a few ways you can help.

Donate or Sponsor. Savvy Ladies relies on donations and sponsorships to keep the website, small staff, and operation running smoothly.

Refer. Refer a woman you know to the free financial helpline for a consultation. Or, refer a financial professional you know to volunteer.

Volunteer. If you are a financial professional, apply to be a Savvy Ladies volunteer. It’s up to you how much time you spend. Of course, men are welcome, too!

Continue ReadingFree Financial Mentoring: Savvy Ladies