fee-only financial planning

Death By A Thousand Indecisions

“Then indecision brings its own delays, And days are lost lamenting over lost days. Are you in earnest? Seize this very minute; What you can do, or dream you can do, begin it; Boldness has genius, power and magic in it." Johann Wolfgang von Goethe, Faust Death by a thousand indecisions. As Goethe asked, are you “in earnest”? When it comes to decisionmaking, sometimes it's quick: Ready-Fire-Aim. With other decisions, we take our sweet time. How much is indecision costing you? Like death from a thousand cuts, indecisions can slowly deplete our energy, leaving little behind for ourselves or others. Decisions are Draining That's because decisions are draining. Neuropsychologists like Dr. Moira Somers tell us that decisionmaking depletes our mental energy. According to Dr. Somers, every day we wake up with a finite amount of mental energy. As the day goes by, the more decisions we make, the less energy we have. And the bigger they are, the more energy they use. Think about life's transitions. One reason transition times, good or sad, are so stressful and exhausting – a move, a death, retirement, a child, a divorce – is the many seemingly small, plus a few momentous, decisions. Further, lack of sleep, hunger, grief or even excitement can start the whole day off depleted. Then, every indecision we "make" is a decision. In fact, a pattern of indecisions can take physical form, and stress us out every time we see it. What does not-deciding look like? A pile of unfiled papers. Empty boxes stacked in the garage. The “miscellaneous drawer” in the kitchen. The “junk room." Scattered financial accounts in too many places. Unfinished projects. With a finite amount of mental energy at hand, who can blame any of us for having some kind of to-be-decided pile/stack/assortment hanging over us all the time? Dealing with Indecision What to do about it? Make big decisions in the morning, before depletion sets in. Automate it: Use a system to take care of small decisions automaticallyEliminate it: Ask often, "How important is it?"Date-Activate it: Calendar the decision to deal with and be doneDelegate it: Ask for help Automate It An automation example I love and have yet to implement is the decision of what to wear. Michael Kitces, a noted financial expert, famously has a closet full of the same blue shirts, pants, and shoes. One less decision each day for a busy guy. Another example is cooking. Thanks to Cassy Joy Garcia's book, Cook Once: Eat All Week, our household now pre-preps ingredients on Sunday. Then, each work night is 15-30 minutes to assemble and cook the ingredients with pre-planned healthy recipes. The meals are delicious, but the best part is not having to make the decision of what's for dinner. Hallelujah. Eliminate It In the summer of 2021 I began thinking about a new car. My financial plan called for me to sell my would-be 7 year old car in January 2022 and buy another one. I couldn't decide what…

Continue ReadingDeath By A Thousand Indecisions

Money: Values, Behaviors, Habits and Change

Money values, behaviors, habits, and change: Perhaps there is something about middle age, or a pandemic, that creates the urge to examine values, behaviors, habits, and change. At my 25th college reunion, I had breakfast with a college friend who worked for our alma mater, Davidson College. She had attended lots of reunions. I asked about her observations of reunion attendees. She said something like, “At the 10-year mark, everyone’s comparing notes – who has how many kids, who has graduate degrees, what they did for vacations, what kind of home they live in, etc." In other words, their money values tended to be focused on status. "By the 25th, nearly everyone has experienced some kind of life event, and they are a lot more mellow. The other stuff must not seem as important.” So, values shift as life unfolds. Values drive behaviors, which become habits. When we begin to question the behaviors and habits, we become ready for change. And that's how growth happens. Eventually this process can work its way into finances. Beginning to Examine Behaviors - Eating Habits My own path to behavior change didn't start with money. It started with eating. One of my first experiences with behavior change was through Weight Watchers. I was 35 years old, 5'3" and 15 pounds overweight. I decided that I valued being healthy more than enjoying unhealthy food. I lost 20 pounds and gained 5 back, but kept it off. How did I do it? Tracking and accountability. Whenever my clothes got tight, I would write down everything I ate. This helped me track and change my eating behaviors permanently. Ironically, tracking and accountability had come naturally to me with money. I wrote my first budget at age 9, and had tracked my money ever since. This made me a good saver, but later I learned it didn't necessarily mean I had a good relationship with money. Conversational Habits Next I moved to healthier conversation habits. The values of listening well and feeling heard became more important. I learned that “listening” does not mean, “Wait until the other person is finished talking so I can say what I want to say.” Listening means to suspend all noise and chatter in my head; and reflect on what I am hearing. To eliminate the noise and chatter, I acquired a rule: Anything that I want to say while someone else is talking, I am not allowed to say. Like any other habit change, it took conscious effort at first. When I think of something I want to say, I let it go, stay present, and listen. I found that, if I truly wanted to understand someone then what I wanted to say would have gotten in the way of that. My conversational habits, and relationships, improved. Money Values, Behavior, Habits and Change My money habits needed improvement too. I used to overtrack my spending and worry unnecessarily about it. This led to a habit of denying myself some things that would…

Continue ReadingMoney: Values, Behaviors, Habits and Change

Floridians: Wait ‘Til July 1 to Buy Kayaks, Grills and Broadway Passes

Floridians, wait until July 1 to buy that kayak, new grill, or Broadway series pass. The state of Florida has a Freedom Week sales tax holiday encouraging us to a) get outside and b) get back to sharing space with strangers. The holiday lasts from July 1 to July 7, 2022. Depending on the county in which you live, that could mean a 6% to 8% savings. Two Exemption Categories The savings cover two main categories: a) outdoor activity supplies and b) events. "Outdoor activity supplies" include everything from bug spray to gas grills (the first $500 - sorry, gourmet grillers). Reading the list of exempted items makes me want to spend the rest of the summer in the water (many of these do have limits ranging from $500 down to $10): canoes and kayakswater skis and wakeboardspaddleboards and surfboardscoolersgoggles, snorkels, and maskssunglasses and sunscreenrods, reels, bait and tackle For woodsy type landlubbers, exempt (also with limits) are: binocularsbicyclesbug spraycamping suppliesoutdoor gas or charcoal grills Camping supplies include stoves, tents, collapsible chairs, lanterns, flashlights, and sleeping bags. (Gee, this also reads like my hurricane preparedness list.) Events and Annual Passes For even more fun, "events" include tickets to any concert, movie, game, fair, festival, cultural event, or gym with attendance dates through December 31, 2022. Note: You have to buy the ticket between July 1 and July 7 for any event scheduled through the rest of 2022 to get the exemption. Events also include annual passes to: museumstheaters (hello, Broadway series, orchestra, and opera)state parks (which I didn't know they charged sales tax on in the first place?) Despite its property-tax-free status (for now), sorry, but Disney does not count as a state park. No limits on the cost for the passes. So if you're considering venturing out for the Broadway series, purchasing the pass between July 1 and July 7 might save you enough to cover dinners before the shows. For a complete description, see the state of Florida's TIP sheet at: https://floridarevenue.com/taxes/tips/Documents/TIP_22A01-04.pdf There are other sales tax holidays also going on right now. Read the comprehensive list here and mark your calendar for May of next year to watch this space for 2023: Inflation Relief: Florida 2022 Sales Tax Holidays How will you take advantage of the Freedom Week sales tax holiday?? Leave a comment below.

Continue ReadingFloridians: Wait ‘Til July 1 to Buy Kayaks, Grills and Broadway Passes

Inflation Relief: Florida 2022 Sales Tax Holidays

Inflation relief: Florida 2022 Sales Tax Holidays. In inflationary times, every bit of savings can help. Florida sales tax runs anywhere from 6% to 8%, depending upon the county where you are making the purchase. Several years ago the Florida legislature started sales tax "holidays," beginning with the back-to-school season. Flush with a budget surplus this year, the legislature passed several more holidays which begin this summer. Some of them last a week, while others last up to 2 years. For a major purchase you might be considering, it pays to know the timetables. Disaster Preparedness: May 28 - June 10, 2022 This has been an annual sales tax holiday for a few years now. If you are in or near Florida, and getting low on batteries, bungee cords, coolers, tarps, portable generator(s?), or several other items listed in the link below, you can save the sales tax by waiting until the week of May 28 to stock up. Of note, the holiday includes all kinds of pet provisions - pet food, pet kennels, pet beds, leashes, and even pet waste disposal bags. Here is the link to the 2022 list of exempted disaster preparedness items: https://revenuelaw.floridarevenue.com/LawLibraryDocuments/2020/05/TIP-123007_TIP_20A01-02_FINAL_RLL.pdf Big Deal - Home Hardening Disaster Preparedness: July 1, 2022 - June 30, 2024 This one is a bigger deal and can save major bucks. Impact-resistant windows, doors, and garage doors will be fully exempt from sales tax for 2 years starting July 1. So if you are planning a major home improvement, talk to your contractor about placing the order after June 30. On a $5,000 order, in a 7% sales tax county, that's a $350 savings. Unlike most of the other holidays, this exemption also applies to commercial orders. More detail on home hardening exemptions here: https://floridarevenue.com/taxes/tips/Documents/TIP_22A01-07.pdf Also Big Deal - Appliances: July 1, 2022 - June 30, 2023 Thinking about replacing appliances? Wait until July 1 and you can save the sales tax on Energy Star appliances. High-end appliances are not included, and the definition of "high-end" appears to be about $1500 ($3000 for refrigerators). $1500 x 7% = $105 in possible savings. More detail on appliance exemptions here: https://floridarevenue.com/taxes/tips/Documents/TIP_22A01-05.pdf Children's Books: May 14 - August 14, 2022 Sales tax on any book written for children under 12 is waived all summer. One of my personal favorites: The Four Money Bears by Mac Gardner. This website also has a fun financial literacy game for kids called "Berryville." Fun Events, Outdoor Supplies and Annual Passes: July 1 - July 7, 2022 This sales tax holiday began during the pandemic in 2020. Event tickets, camping supplies, paddle boards, kayaks, binoculars, grills, and bicycles are some of the larger ticket items included in the holiday. Of note also - annual or season passes for museums, theater series, ballet, and state parks. New for 2022: pool supplies and parts. The complete list for events and supplies during "Freedom Week" is here: https://floridarevenue.com/taxes/tips/Documents/TIP_22A01-04.pdf Children's Diapers, Clothing and Shoes: July 1, 2022 - June 30, 2023…

Continue ReadingInflation Relief: Florida 2022 Sales Tax Holidays

What Is Financial Anorexia?

What is financial anorexia? Financial anorexia is a type of spending disorder. People who suffer from the eating disorder of anorexia may obsess about food and the number on the scale. People who suffer from the financial disorder may obsess about money and the number on their statement(s). For those suffering - and it is indeed suffering - from financial anorexia, they never believe they have enough to enjoy what they’ve got. According to Ken Donaldson, LMHC, a licensed mental health counselor in Seminole, Florida, “Anorexia is characterized by a distortion of perception.” Someone suffering from the eating disorder believes they still need to lose a few extra pounds, when to everyone else it’s clear they are harming themselves. Someone suffering from the financial one believes they still need more money, when it’s clear they are depriving themselves. While the eating disorder of anorexia can be fatal, financial anorexia can be dangerous to mental health, friendships, and family relationships. Think about how it feels to be with someone engaged more in extreme deprivation than in enjoying life's simple pleasures. Where Does Financial Anorexia Come From? Anorexia is fueled by isolation - the more the sufferer depends upon their own distorted perception, the worse their condition becomes. For example, Ebenezer Scrooge (in the beginning of Dickens’ tale), is an isolated penny-pincher and money hoarder. He is the stereotype of the financial anorexic. Additionally, our culture still worships conspicuous wealth and Twiggy-like figures. “You can’t be too rich or too thin,” sums it up. Most people understand the “too thin” part, but “too rich”? Is it possible to be "too rich"? Financial anorexics typically accumulate an abundance of resources. Their wealth does not come from a healthy relationship with money. Rather, fear is at its root. They might be "too rich" for their actual needs. Further, the more they have, the more they have to lose, or fear losing. What are they afraid of? Fears might include: that it will disappear tomorrow in a catastrophic world event; a very expensive health issue; hyper-inflation; becoming dependent upon adult children; “spoiling” family members; or that self-worth will fall in lockstep with net worth. Certainly some of these things can and do happen. Yet our societal messages, and brains wired to look out for danger, emphasize catastrophic scenarios past the point of their actual probability. At some point in life, many financial anorexics realize, to their immense regret, that they worried more about what might happen, and didn't, than enjoyed what they actually had. What Can Be Done About It? Exposure to new information sources is one method of help. According to Donaldson, “New information will disrupt the pattern.” Support groups, a counselor, and therapy can provide external points of view. For financial anorexia, a visit with an understanding financial professional, who can provide concrete reassurance, often is a good first step. Sometimes the new information has to come from, unfortunately, from a painful life-altering event. How did Scrooge turn around? By exposure to his past, present, and…

Continue ReadingWhat Is Financial Anorexia?

What’s a Holiday Spending Style?

What's a holiday spending style? It's the approach you take to spending money on others. How do you decide what to spend at the holidays, and on whom? In her program, Money Habitudes http://www.moneyhabitudes.com, Dr. Syble Solomon breaks down our money habits and attitudes into several different styles. Here are how a few of those styles might apply to holiday spending. Spending Style: Status After earning my first real money at 15, I made a list and a budget for each person on it. A few years later, at age 20, I looked at the list of names, each with a dollar sign beside them, and thought "Yikes!" It could appear as if each person had a price tag. At the time, I didn’t know it, but I was operating under one of Dr. Solomon's six spending styles, the one involving “status.” In other words, I was too concerned what other people would think about my spending decisions, and as a result, I spent too much. So next,  I made a “total” budget, and tried to keep track as I went along on how I was doing. Yet that didn’t work very well, since I could always find an excuse to break the budget on something to keep it “fair.” Spending Style: Security If you spend very little on others, and on yourself, because you are concerned you may need it for an emergency, you might have the "security" spending style. You might do the bare minimum necessary to get invited back to next year’s turkey dinner. Or you might find ways to celebrate other than spending money. Spending Style: Idealist Idealist – If you reject the materialism of the holidays, then you might give everyone something home-made, like cookies, or your own artistic creation. You have the hardest time of all styles making a spending plan, because you despise handling money matters. Spending Style: Spontaneous This style can’t wait to see what great ideas are presented each year by retailers. Perhaps you make a spending plan, but you have a tough time sticking to it because of all the fun temptations and opportunities to purchase the perfect gifts presented to you right before checking out. Spending Style: Caretaker Caretakers see gift-giving as a way to show how much you care about people. Your spending plan might be more generous than other spending styles (but hopefully not more generous than is financially wise). Spending Style: Goal-Oriented Your most important concern is staying within your spending plan. It may take you longer to get your shopping done in order to find the right gift-cost combinations. What's Your Style? If you exhibit more than one holiday spending style, that is a good thing. The key is not to take any one style to an extreme. If you can make a spending plan that is wise for your situation, shows your love and affection for others, and still allows for some guilt-free spontaneity, you have probably found the combination that will bring you,…

Continue ReadingWhat’s a Holiday Spending Style?

Decision Fatigue and Shopping

Decision fatigue is a real thing. I discovered this poignantly on a recent shopping trip. The mission was simple: Buy a spice rack. I figured the best shot was at Bed Bath Beyond (BBB); a store I had not entered in over a year, much less at the holidays. I had a specific size and type in mind, so there was no doubt BBB would provide all the choices I needed. Little did I know that trip would be the beginning of the end of my day’s productivity. Upon entering, I scanned quickly, bypassing a cart to stay focused on the single item I wanted. Smugly, I glided past the holiday specials to the kitchen department. Lo and behold, there were spice racks. And all kinds of other racks. An embarrassment of choices. Because I like choices (or thought I did until this day), before long, I was nose to nose with shelves and shelves of plastic, rubber, wood, aluminum, and chrome gadgets, and doodads for kitchen storage problems I didn’t even know I had. It was an assault on my single-mindedness. More than once, something other than a spice rack caught my eye. At first, I had the mental wherewithal to ignore them. Decision Fatigue Begins As the minutes wore on, my brain was presented with dozens of items for which a decision had to be made. Does it look like what I came for? If yes, is it the right size and type? If no, move to next item. As this process continued, some strangely gleeful part of my brain, a la Martha Stewart, said, “It’s not the spice rack, but….is it something I COULD use? Hmmmm…it looks very handy. And sleek, too! After all….maybe it could make even more room in the cabinet?” The cabinet, of course, had nothing to do with the spice rack. “STOP IT,” another Jean-Chatzky-part of my brain, said. “You are here to get the spice rack. Move on.” Next doodad. Does this look like the spice rack? No, not quite. Yet, the label showed the entire matching doodad set in a fantasy-organized kitchen. Then that Martha Stewart voice again, “Oh, wouldn’t it be cool if my whole kitchen looked like this doodad’s label?” “STOP IT,” Jean intervened. “You would have to buy every doodad like it in here, which is a) exactly what you did not come here to do and b) doesn’t even include a spice rack. Next item!” And so it went….back and forth over a dozen items for fifteen minutes. My mental wherewithal was waning. Finally, I found exactly what I was looking for and grabbed it. Decision Fatigue Leads to Aimless Shopping By then, Martha and Jean had gone 144 rounds. I felt drained. So why did I feel like, oh, taking a look around? Just to see if there was something I couldn’t live without? I got to the bath side and wondered what got into me. To check out, I had to walk the gauntlet of…

Continue ReadingDecision Fatigue and Shopping

Channeling Jeff Foxworthy – You Might Want a Trust If….

“Do I need a trust?” Although it's a legal question, it's frequently asked of financial advisors. What do they say?  “Hey, I’m not an attorney,” is one possible—but maybe not the most helpful—answer.  “Hey, I’m not an attorney, but I can play one,” may be polite, but inadvisable.  “That’s interesting you bring that up. I’m curious how you heard about trusts.” This reply seems a little better. It keeps the focus on the questioner, and it’s pretty safe legally.  Pros and Cons of Trusts  Answers people may give range from, “I dunno," to citations of articles, websites, conversations with friends, family members, or even an estate planning attorney. All of those mixed messages can get pretty confusing.  For some people, trusts are a mysterious-yet-evil domain of the ultra-rich. This belief isn’t surprising. When was the last time you saw positive media coverage of a trust? It typically pops up when a billionaire’s “trust fund baby” is arrested.  There are dozens of kinds of trusts. For this post, “trust” means a revocable living trust. They tend to be the most common and relevant.  Trusts aren’t for everyone. They are costly to set up. Some people have difficulty implementing and maintaining them. They are powerful. Scary powerful, sometimes.  Rather than answering, “Do I need a trust?” directly, I prefer to channel comedian Jeff Foxworthy’s famous phrase, “You might be a redneck if …” (anyone under 40 may have to look him up). It seems to help people discover for themselves whether a trust might be useful.  You Might Want a Trust If....7 Reasons  1. If you own property in more than one state or country, you might want a trust.  Trusts avoid probate—if drafted, executed, and implemented properly. Property in two states/countries means probate in two states/countries. In many states, probate attorneys charge a percentage of the probated asset value. Dollars spent now on a trust could seem small compared to the dollars spent on lawyers and court fees in two places later. 2. If you are concerned about a grown child’s ability to handle money, you might want a trust.  The child gets the money, no strings attached, if left through a joint account, will, payable-on-death (POD) designation, or beneficiary designation. Trusts let you build strings. One common example is to pay one-third of principal at age 30, one-third at age 35, and the remainder at age 40. As your family ages and changes, you can revise trust provisions like these. Revocable living trusts are amendable. 3. If you have a concern about a child’s current marriage, you might want a trust. Trusts can be written so that inherited assets can be protected in a divorce. Assets inherited other ways, especially if commingled with other marital assets, can be harder to protect. 4. If you have a concern about a child’s future marriage, you might want a trust. Trust provisions can be written for future spouses, too. 5. If you aren’t as concerned about dying as living a long time with…

Continue ReadingChanneling Jeff Foxworthy – You Might Want a Trust If….

Most & Least Financially Literate States

For National Financial Literacy Month, WalletHub's senior editor John Kiernan profiled the most and least financially literate of the 50 states and the District of Columbia. New Hampshire ranked 1st; Louisiana, last. Many different factors were used, including high school graduation rates, households who borrow and bank outside of the banking system; and percentage of households with a rainy day fund. Click below to find out where your state ranks. He also asked me a few questions about how to improve literacy at home, in schools, and in the U.S. How would you have answered his questions? Read more here: https://wallethub.com/edu/most-and-least-financially-literate-states/3337/#holly-donaldson What can you do to improve your own financial literacy? How can you help others improve theirs? What should our policy be in schools and in Congress about financial education topics? Kiernan notes that credit card debt has now topped $1 trillion. Share the data showing how far we have to go with financial literacy. Encourage others. Comment here, or at the WalletHub article.  

Continue ReadingMost & Least Financially Literate States

Will This Be Your Year?

For several years before I started my own practice, I had an annual negative-self-talk ritual. It usually happened near Christmastime. “Another Christmas has come, and I still haven’t started that business. Maybe this will be the year.” For the first few years this happened, I told myself it “wasn’t time.” After two or three more, I realized there was never going to be the “right time.” I would continue to justify my “need” for my corporate salary and benefits, until something more fundamental changed. I would like to say that was the Christmas where the heavens opened, angels sang, a masculine voice boomed something about my destiny, and the next day I walked into my boss’s office with my resignation letter. But no such thing happened that Christmas. What did happen was a metaphorical lightning bolt on my next summer vacation. I was sitting next to my sister on the beach (which to me might as well be heaven). There were no angels; only cackling seagulls. And there was no masculine booming voice, only my sister, saying out loud what I needed to hear. “I don’t know when you’re going to stop talking about this business, and just DO IT.” The magnitude of her right-ness was hard to take, but I didn’t question it. Two months later, my potential first client showed up. Two weeks after that, I resigned from a 20-year corporate career. That was 11 years ago. In more ways than just business, 2017 was my best year ever. There is no doubt I could have quit sooner. Today I would be telling my 2003, -4. and -5 selves, “You think it won’t be ok. It will not only be ok, it will be fantastic. Don’t wait.” Nowadays I have the honor of listening to others share their long-held dreams of starting something new - businesses, careers, retirements, families, and even a mission. Like me, many think it’s not the “right time.” As a financial professional, if I stuck strictly to the numbers, most of the time I’d simply agree. Yep, it's easier to plan for the money we know is coming than the money we don’t. Yet because I know that spirit of longing, instead I ask, “What would you be willing to give up in order to make that happen? What if life didn’t look so bad after your decision? What’s the worst that could result? And what could you do then?” And finally, “But what if you succeeded beyond your wildest expectations?” For those who don't have an outspoken sibling, sometimes another outside party helps us remember both sides of the question. Now, how about you? What would you like to start new? Will this be your year?

Continue ReadingWill This Be Your Year?