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Women: Use Your Clout as a Consumer

Recently, CNN reported, “SnapChat stock loses $800 million after Rihanna responds to offensive ad,” one that she said made light of domestic violence. That startling monetary loss came not because this celebrity stopped patronizing them herself but because she also asked her fans to drop Snapchat as well.

While everyone does not meticulously research the retailers and service providers that get their dollars,  more people are paying attention to the stances the businesses they patronize take on certain issues. You can use your clout as a consumer to express your views on political and social issues, especially if it makes you do more financial planning so you can spend in ways that make you feel useful. You are not obligated to spend money in places where you do not feel welcome or where you disagree with the management. Whether you join a group of people in a organized effort or you find ways to feel better about your own personal spending, consider ways you can spend proactively.

Spending: As The Washington Post reports in, “Why ‘buycotts’ could overtake boycotts among consumer activists,” avoiding a business is not the only way to flex your financial muscle. The article defines a boycott this way: “…used over the years to explain efforts by conservative and liberal consumers to spend money in support of companies with which they agree, especially as a counter-protest to those boycotting the same brands.”

You can support organizations you believe in while not buying from those that don’t align with your values. The difference with the buycott is that you give less publicity to the businesses you don’t support.

Investing:How to put your money where your feminism is”  discusses how you can not only invest in companies that you think are acting responsibly when it comes to gender equality; you can also invest in helping women who need investors to start their own businesses.

Donating: In “13 Easy Ways To Put Your Money Where Your Feminism Is,”  BuzzFeed offers a list of organizatons that are helping women in India. Many such organizations could use your help.

Women Who Blazed Trails in Business and Finance

Madam C.J. Walker

For Women’s History Month, LearnVest published an article about “Female Financial Trailblazers You May Have Never Heard Of” and whether you have already heard about these women or not their stories are inspiring. Even if you know of them, it helps to be reminded of what women can accomplish in business and finance. These women not only stood out for their skill in earning money; they were role models of leadership and left legacies of philanthropy and community service.

Madam C.J. Walker, daughter of former slaves, was orphaned, married, and widowed—all before she reached the age of 20. After supporting herself and her daughter washing clothes, she found she needed more money and started selling a product she had used when she suffered from hair loss. Later, she and her third husband worked to sell hair products she formulated and by 1910 she made an amount that would equal several million dollars in today’s money. Not only did she amass a fortune, she used it to open businesses that employed other African Americans and supported her community through philanthropy.

Katherine Graham, who was recently portrayed in the Oscar-nominated film “The Post,” was the first female Fortune 500 CEO. Interestingly, she stepped into this role after her husband’s death (Graham’s husband had taken over the CEO role from Graham’s father).

Graham stood up to the government when her newspaper published the Pentagon Papers and unmasked those behind the Watergate break-in. She helped make The Washington Post a nationally recognized publication and increased its revenue by growing readership and growing its business ventures.

Muriel Siebert is the first woman to become a member of the New York Stock Exchange (NYSE) and it wasn’t easy to get to that point. Membership costs are high and she had to keep knocking on doors to find a bank to lend her the money needed to join.

Siebert blazed trails in big and small ways: “ [donating] millions of dollars to help other women get started in finance, while also standing up for minorities in the industry.” She also “….famously threatened to have a portable toilet delivered to the NYSE’s seventh floor, near the exchange’s restaurant, unless the chairman installed a ladies’ room there. “

Financial Planning Can Help Women Avoid Poverty

A Moneyweave article, “Women’s History Month: The Paradox of Women & Money” offers statistics about the finances of women in the United States. Over time, women in the country have made strides in education, in pay (although women still likely earn less than men), and in expected life span. This all sounds great so is there really a problem? Yes: part of the paradox is that “While women today control about half the country’s privately held assets, nearly three in four Americans living in poverty are female.”

Women earn less, live longer, are more likely to have a chronic health condition, and also tend to be less financially literate than their male counterparts. Women are also more likely to both be caregivers throughout their lives and need to receive care as they age. Women who are caregivers for their families may sacrifice potential earnings; women who work as caregivers are often not paid well. Overall, nearly 3/4 of older Americans who are poor are women.

The article mentions that there are a lot of studies done to talk about the wealth gap between men and women; what it implies is that while the problem is being recognized, the studies do little to change the reality that many women end up in poverty because of the way our society functions.

The article makes it clear that many financial advisors are not even aware of these issues and that those who are aware may not want to discuss this with clients: “Without good planning  and far too often, women unintentionally assume financial risk. Risk mitigation begins with awareness.”

You need to make sure that you have a Fee-Only financial advisor who is willing to address these issues. Talk to your friends and loved ones, ask them what kind of plans they have in place for retirement since financial planning can help women avoid poverty. Perhaps none of you want to have an in-depth conversation about this. That is okay because change begins with awareness. Just checking it with the women in your life to see if they are even aware of their financial outlook for retirement is a start.

Make Your Retirement Dreams a Reality

A Motley Fool article offers the warning “Don’t Retire Unless You Can Answer These 4 Questions”  and the questions they outline are good ones. Many of us dream of the day when we  can retire but a number of us do not actually plan well for the reality. In the best case scenario, we reach retirement and realize that we have not planned well for our financial or emotional wellbeing and then we quickly make adjustments. In the worst cases, we are forced into retirement earlier than we might have imagined and find ourselves at a loss.

Measuring income: As you examine what you will have to live on in retirement, you can do more than just look at income sources (Social Security, retirement savings, pension); you can do some calculations: “Figuring out your income from retirement savings is a bit trickier, but you can start by assuming you can withdraw at least 3.5% of the total balance each year. Just multiply the total balance in your retirement savings accounts by 0.035 to determine your minimum annual income after you retire…”

If that number makes you panic, call a Fee-Only Financial Planner to start working on how you can change that figure into something that makes you feel more comfortable.

Managing investments: The Motley Fool advises that your investment goals change once you retire. As a younger person, you are interested in accumulation—investing in ways that will earn you as much as possible as fast as is prudent. As a retired person, you will be more interested in preservation—having the pool of money that will last and allow you to keep drawing income from it. It is important to work with a financial advisor who understands this.

Managing healthcare expenses: Having your own retirement savings can make a big difference because as the article notes, “….healthcare expenses are going up faster than overall inflation, don’t expect your Social Security cost-of-living adjustments to keep up with those expenses.”

Talk to a financial planner about long-term care insurance before you need it since long-term care can become burden for some retirees.

Making the Best of Bad Investing Advice

We think it is important to get good financial advice and yet sometimes we also need to hear about times when things went awry. In “Lessons Learned: The Worst Investing Advice They Ever Got,”  a few people spoke to NerdWallet about learning things the hard way, noting that sometimes a dishonest person will give you bad advice on purpose and other times, an honest person may give bad advice without intending you harm.

A college freshman working as a valet heard a cassette tape about penny stocks in a car he was parking. He told NerdWallet that “he didn’t have anyone to vet the idea with “and ending up being swindled by a penny stock broker. He was taken in by smooth talk but rather than give up after he lost money, he ended up working in finance.

Another young man, a recent college grad, decided not to take unsolicited advice and was all the richer for it. A colleague asked the man if he was still paying off student loans, and when he said yes, the colleague advised him to use the money from his 401(k) to pay off his student loans after tax season.

This young man was aware that “An early withdrawal from his 401(k) would incur a penalty (10% for people under the age of 59½).” When he shared this information in that conversation, the colleague insisted that getting rid of all debt  as soon as possible was the best option—even if one had to lose all one’s retirement funds to do it. The young man, however, was impressed with the “very generous”  match offered by his company and did not want to lose what he had already invested nor did he want to lose the chance to let that money grow.

As these two examples illustrate,  financial advice is coming at us from all directions. Consulting with a Fee-Only financial planner is a way to get advice that is tailored specifically to you and your individual needs without worrying that someone is advising you with a commission in mind.

Financial Infidelity Breaks Hearts and Budgets

In “The gift you don’t want for Valentine’s Day,”  CNBC discusses financial infidelity. The article opens with a story about how a spouse ended up revealing the credit card debt he had hidden from his wife during a session with a financial advisor.

The article offers things to look out for but it is not an exhaustive list and noticing one thing does not mean that you should assume the worst.

Hidden information:

If you used to get financial statements in the mail but they stop arriving, look into what happened to these statements. It may be easier to track financial infidelity online if you have access to online accounts but if will be hard to know if your spouse has opened new accounts. Still, there will be a paper trail or some records of financial transactions that were hidden from you.

Changes in behavior:

Has your partner started behaving differently with regards to money? This could mean spending a lot of money, including buying you a lot of expensive things. Or it might look like a spouse who was rather uninterested in budgeting suddenly wanting to know where every penny is going.

While in some instances, financial infidelity is related to a full-blown marital affair, this is not always they case. Deceiving your spouse about finances is considered financial infidelity. This may be secret spending or secret hoarding. And while experts can define betrayal, each individual has their own idea of what is too much to bear: it might be racking up huge amounts of debt or for some it could mean ignoring the family budget, shopping and hiding bags to sneak in later when the your spouse isn’t aware.

The article cites a survey from the National Endowment for Financial Education which found that 2 in 5 people have deceived their partner about finances.

It is a good idea to be aware of household finances in general and not specifically because you fear your partner may deceive you. However, it is easier for one spouse to deceive the other if one does not pay attention to family spending or if one person is completely in charge of paying the household bills.

Debt and Your Dating Life

Would you stop dating someone because of their debt?

Washington Post finance columnist Michelle Singletary admits that while she ‘loathes’  debt, she also would not judge someone based on debt alone. While you do not want someone to take advantage of you or lose out on a good relationship, you also do not want to ignore it if your honey owes a lot of people money.  She offers tips on what to look for in “Is debt a deal breaker when dating? Four signs that it is.”  And before you quiz someone you are dating, you might consider examining yourself if you are also not totally free of debt.

How does this person discuss debt? Does your date seem nonchalant about owing money to people or institutions? You have to not only listen to what someone says about the amounts they owe or how long they’ve owed it but also to the way they discuss this. When discussing just how they came to accrue the debt, listen to whether or not your date has any regrets. Does this person accept responsibility for taking on the debt? Or does the person blame others for both the debt and the fact that it remains unpaid?

How does this person plan to decrease their debt? As you spend time with your date, do you notice that they either spend a lot or discuss frivolous spending? This is not an encouragement to be judgmental but rather a call to pay attention and not ignore evidence that someone may be less than financially responsible.

Singletary adds, “ If your significant other ignores calls from creditors, isn’t opening mail and doesn’t have a specific strategy to get out of debt, you should be very concerned.”

Being around to see if someone is avoiding creditors likely means that you are beyond your first few dates. Singletary is not necessarily saying that you should demand a financial breakdown during those first initial outings; she is suggesting learning about someone’s finances before becoming seriously involved.


Women: Is It a Mistake to Apply for Social Security at 62?

An NBC News article about the mistakes women make concerning Social Security makes it seem as if applying for benefits as soon as you are eligible at 62 is an error. No matter what advice you read here or elsewhere, when it it comes to Social Security benefits, the important thing is to know what some of your options are. You don’t have to automatically apply at the age of 62; you also don’t have to wait until you are 70 or beyond because you’ll get more. You need to figure out what will work best for you in your particular situation. Consulting with a Fee-Only financial advisor can help you make a decision about when to apply for Social Security.

Overall, women tend to live longer and are more likely to run out of income than men. And you may be aware of some of the factors that contribute to why an older woman may run out of income including lower wages and dropping out of the workforce to care for family. And of course, some women can’t afford to wait and the article points out that the decreased benefits may account for why more women over 65 live in poverty than men.

If retirement is far off, see what you can do to maximize earnings, savings, and investment income so you are not in a position where you must rely solely on Social Security for income in your golden years.

Married women can get spousal benefits but what some may not realize is that filing at 62 means you get a decreased benefit whether you take your spouse’s benefits or your own:

“At full retirement age, a woman would be eligible for either her own full benefit or half of her spouse’s, whichever is larger. But if she files at 62, she would only be eligible for her reduced benefit or as little as 32.5 percent of her partner’s.”

Some married women opt to have their spouse claim Social Security first and then claim their spousal benefit while continuing to work until reaching full retirement age. And divorcees can claim spousal social  security benefits if they meet certain requirements including having been married for at least 10 years.


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