Overview & Starters

Start off on the right financial foot, and stay there!

Rework your budget. At any turning point in life, it's important to understand the effect it will take on your finances. You may be starting a new job with a different pay rate, or perhaps your parents will be helping you less, or not at all. Sit down and lay out every form of income and every financial obligation you have, including all debt, like student loans, and plan your monthly budget. Knowing how much money you owe and how much you have available every month will help you keep your spending in check. 

Don't rely on credit cards. Young adults are the most targeted demographic by credit card companies. With newly found financial independence, a credit card can seem like the miracle answer to making ends meet. But be wary, credit cards are one of the easiest ways to accumulate a great deal of debt, and fast. Think of your credit card as an emergency only resource. Unless you know with 100% certainty that you will be able to pay off your bill at the end of the month, don't use it.

Save, save, save! One of the biggest financial mistakes a person can make is thinking that they cannot save money while paying off debt at the same time. No matter how much student loan or other debt you have, make sure to put a little into your savings every month. If you put all of your resources towards paying off your student loans, you'll wind up having to borrow more money should you have an emergency, financial or otherwise. Being prepared for the unexpected is one of the most important pieces of financial advice.

Get Your Goals On

As always, resolutions will be a common discussion in the weeks to come, and financial resolutions will likely top the list for many. Here are a few tips to help get you on the path to financial stability.

Make a plan. Having goals is great, but they're only as good as your plan to reach them. After you identify your goals for the year, lay out the steps you will take to achieve them; the simpler the steps the more likely your success. For example, if your goal is to be debt free, having a step of paying off a large credit card balance isn't very helpful—it in itself is a goal. Instead have your steps be something like, "put an additional $50 toward my balance every month."

Get a buddy. As with many goals, like losing weight, a strong support group can make all the difference on your road to success. Find someone in your life to be your buddy in reaching your financial goals. Perhaps you have a friend or family member that's working towards a similar goal, or has already reached it.

Have regular check-ins and discuss your difficulties and successes. They may have just the solutions and encouragement you need to keep moving forward.

Stay positive. Rome wasn't built in a day, and neither is financial success. Remember that reaching your goals takes time, and even the smallest step forward is something to be proud of. Even if the road gets bumpy in the months ahead, keep your chin up and remind yourself that you CAN do this!


As we enter another back-to-school season, plenty of parents, teachers and students are setting goals for themselves for the school year. It's a good time to reassess where you are now and where you want to be when the final bell rings next spring. When it comes to setting achievable goals, remember the SMART rule. According to the rule, in order to increase the chance of achieving a goal it must be:

Specific: Having something specific in mind is the first step to achieving any goal. Plenty of people set a goal for the year to "save more money," but being more specific makes it more likely to happen. You don't set out on a trip without knowing your destination, and the same goes for goal setting. 

Measurable: To make the goal measurable, set an amount you want to save instead of just saying "more." Decide how much would make you feel more financially stable, and start there.

Attainable: Next, ask yourself if that amount is attainable. If the amount you'd like to save by the end of this year is $1 million, chances are it's going to be difficult to get there. But you might be able to get there by the time you retire, or sooner, depending on how much you have now and how much you are able to set aside each year.

Realistic: Consider adjusting your goal to be more realistic, based on where you are now, your budget and other life factors.

Timely: Making your goal timely will make it easier to figure out how much you need to start saving each month, or, better yet, each day. The amount you determine you need to save each day is how much you need to decrease your spending on a daily basis. The next time you're confronted with a spending decision that might compromise your goal, simply do the math to figure out how many days' savings you'll be giving up. Then ask yourself, "Is having this scarf/TV/extra cocktail at happy hour worth putting off my goal?" Breaking the process into small, daily decisions makes it easier to "find" the money to get you to your goal. Now that's SMART!

3 Quick Steps to Make Sure You Don't Fall Behind

Even if you've let yourself fall behind on your savings goals, it may still be possible to achieve them before the year is over. 
Take some time now to re-evaluate and reinvigorate your goals for the year.

Here are three easy steps:

Make sure your goals are SMART.
Take a look at some of your habits to see if you can make any changes.
Get back on the wagon. 

Even if you've fallen off track throughout the year, it's never too late to get back on. Time is on your side, so don't delay in making your savings goals happen.

5 Financial Terms You Need to Know

When it comes to financial security, there are a lot of words that experts use to describe what savers should do, and sometimes it can get confusing. Here are five common terms you should know.

Asset: An asset is anything you own, like your home, car, cash, retirement accounts, clothing, furniture, etc., that is of value. In other words, anything that you could sell for cash is considered an asset.

Liability: A liability is another term for debt, i.e. anything that you owe is a liability. Liabilities often offset assets. For example, your car is an asset, but if you're making payments on a car loan, that loan is a liability offsetting the value of your car. Credit card debt, student loans, mortgages or anything you owe someone else or a company is considered a liability.

Net worth: To put it simply, net worth is a math equation: Assets – Liabilities = Net Worth. So, the net worth of your car would be the amount you could sell it for today minus any amount you still owe on your loan. The same goes for your home and mortgage. If you add up all your assets and subtract all your liabilities, you will have your net worth. It may be negative if you're still getting started, but the goal is to work to have your net worth grow over time

Securities: The term "security," when used in the context of investing, is a blanket term for assets that refers to stocks, bonds, money market funds and other investment instruments that are traded on an investment exchange, such as the NASDAQ or the New York Stock Exchange. Much like you might say "trees" instead of saying oaks, maples and firs, we use "securities" to mean any of those types of money instruments.

Capital gain/loss: When you sell an asset, like shares of stock in a company, the amount of money you receive will almost always be different than the amount that you originally paid for the asset. The difference between the selling price and the purchase price is what's called a capital gain (if you received more than you paid) or capital loss (if you received less). Capital gains and losses are typically taxable, but there are lots of special rules and exceptions depending on what you sold and what kind of account you held the asset in. A tax professional, like a CPA, can help you understand which rules and exceptions apply to you.
Financial security is more than just having enough money; it's having a thorough understanding of what you own, how it works and how each financial decision affects your overall financial picture. Learning the correct definitions is a great way to ensure you stay financially secure over time.

3 Ways to Make a Difference with Your Money

When it comes to saving money, it’s often the smallest efforts that add up to the biggest difference. You’re probably not going to have $1 million fall in your lap tomorrow, but increasing your 401(k) contribution by one percentage point today will most certainly increase your chances of reaching $1 million by retirement. Here are three other little things you can do to make a big difference in your long-term financial security.

Make sure you’re saving enough for retirement. Check out 360 Degrees of Financial Literacy’s retirement planning calculator to see if your retirement plan is on track.

Set up auto savings (or increase the amount you’re already saving). Even if you can only put away $20 per paycheck, it will add up over time. Always pay yourself first and watch your savings grow!

Check your credit report. You're entitled to receive a free copy of your credit report every year from each of the three credit reporting agencies. It takes just a minute to pull it up at www.annualcreditreport.com and scan for errors. Correcting any errors takes some effort, but it will be worth it when you apply for a job or loan that requires you to have a clean credit history.

Give Back

You don't have to give cash in order to make a big impact; there are lots of ways to serve. Here are a few ways you can give back this year.
Keep it clean. You don't need a large scale community clean-up event to keep your neighborhood looking nice. The next time you see litter on the sidewalk, take a second to pick it up and dispose of it in the closest trashcan.
Make a friend. Consider stopping by a community health center or care facility and spend some time with citizens who may not have much company outside of the health care workers who care for them. Taking just ten minutes to stop in and listen to an older neighbor reminisce about his/her bygone days can provide a bright light in their lives and most likely yours as well.

Look up. The next time you're in line at the grocery or other store, make a point to smile at the clerk, say hello and exchange pleasantries. It's amazing what a mood booster it is to connect with a friendly stranger, and your attention will help make these hard workers' day a touch more enjoyable.
It doesn't take a huge effort to be of service in your community. What ways do you give back every day?  

Avoiding Penalty Flags

Here are a few plays to help you avoid penalty flags with your finances.

Delay of game. Waiting until the last minute to pay your bills can be an expensive by-product of disorganization. Put as many bills as possible on auto-pay and the ones that you can't, set them up for payment as soon as they arrive in the mail to avoid getting hit with late fees.

Too many players on the field. Overdraft charges can take a major toll on your accounts. In order to avoid these unnecessary and expensive fees, set up text alerts through your bank and opt out of overdraft coverage so that debit card transactions only go through if the money is actually in your account.

Personal foul, unnecessary payment. Buying movie tickets, scoring seats to a concert, withdrawing money from an ATM that does not belong to your bank, cash back at the grocery check-out, paying your bills with a credit card… these are all areas rife with convenience fees that can eat away at your savings. Whenever possible, go to the ticket window, use your bank's ATM and send a check if it means you can avoid these unnecessary fees.

Extra Point: When you take that extra step to avoid a fee, consider making a contribution to your savings account in the amount that you saved. It's like a double reward for your effort! Now that's a game winning strategy. 

Money Dates

It's a good idea to have a chat with your honey about money, especially if you're thinking about getting married and/or combining households. One of the first steps for combining finances is to schedule a money talk.

Talking about money can be a daunting task, especially if you're not particularly proud of your current financial situation, but being open and honest with each other is essential to laying the groundwork for a happy, stress-free life together. You have to share it all: the good, the bad and the ugly.

Here are a few things to remember for your money dates.

Schedule it ahead of time. Having a set time will allow you to prepare emotionally and mentally for what can be a stressful topic and ensures that you won't be catching each other off-guard with unexpected money questions.

Leave your judgments at the door. In order to have a productive conversation, you both need to feel safe sharing everything. Your money date is a time for loving, open, understanding conversation, even if you learn something that upsets you.

This isn't a one-time thing. It's far easier to make financial decisions when you're focused on the topic than bringing it up in the car on the way to a party or right before you turn the lights out at night. Try to have a money date at least quarterly, if not monthly.

Above all, remember that you're on the same team, and that it may take a bit to get used to each other's financial "styles." It's perfectly ok if you're not on the same page from day one. Just agree that you will work together to get there over time. 

DIY and Save!

This week's tip is for all the DIYers out there; savers who find themselves exclaiming, "I could make that!" again and again. Here are some of my favorite DIY ideas for the summer:

2x4: 4 Ways to Save Money this Summer. 

You likely already know that making your coffee at home can add up to significant savings, but do you know how to make the most of your windows and appliance use in the summer months? 

Ways to Stay Cool in the Summer:

Frozen Rice Packs
Frozen Fruit Cubes
Lavender Cooling Spray
Natural Flavored Water

Expecting the Unexpected

The worst budget busters aren't usually things like online flash sales or upgrading to the latest home audio system. The biggest challenge when trying to stick to a spending plan is figuring out how to account for those "life" expenses like repairing your smart phone, treating a pet's illness or personal care expenses. Because these things don't happen on a regular schedule and are less predictable, it's tricky to plan for them. We tend not to include them in our monthly plan because they aren't recurring in nature, but chances are there's something like this popping up pretty much every month. If this sounds familiar, try this budgeting trick from a CPA/PFS:

Review the last twelve months of your spending (yes, a whole year so that you capture all the seasonal expenses) and write down all of those little things that came up outside of your normal spending. Include things like parties, costs for seasonal illness like the common cold, vehicle registration fees, etc.
Add all of these costs together.

Divide by twelve.

Plan to set this amount aside each month to better prepare for unexpected expenses. To be safe, you might want to set aside a bit more, just in case.
Make it easier to track your “just in case” savings by opening up a separate account with an auto-transfer on the first of each month—treat it like a bill. This should make it much easier to know exactly how much you have available to allocate toward your savings goals.

Your Financial Playbook

The leaves are turning, everything seems to smell like pumpkin spice and the sound of whistles and crunching pads fill the air – it's time for football! As you reassess your fantasy team picks, here are some serious expert tips for a winning financial strategy:

The Hail Mary: Make sure you're prepared for those times when you just don't seem to have a chance to win. An emergency fund with at least 3 months expenses can save your game when all else fails.

Take the go-ahead points: Don't wait until it feels like you can "afford" to start saving money for retirement – retirement won't wait until you can afford it. Time is on your side, due to the power of compound interest, so start today, even if it's just 1% of your paycheck.

No Monday morning quarterbacking: Avoid buyer's remorse by making yourself wait a few days before making a rash purchase. Online impulse shopping can be the hardest to resist, so set up a filter on your email so that all shopping-related emails bypass your inbox and go straight to a folder. That way if you're planning to shop you can look for coupons, but you're not tempted by flash sales and can't-miss deals on things you don't really need.

How Diverse are You?

Diversity can mean many things, but when it comes to your personal finances, diversification typically refers to investing. And while it is important to make sure you're adequately diverse in your investments, it's also important to make sure you don't take it too far. 

To start, most people understand that it's too risky to put all your investing dollars in one basket, but many don't really get what that means in terms of choosing mutual funds or stocks in their accounts. 

If you are investing in individual companies through an employee stock purchase plan or just in an IRA or taxable brokerage account, you should avoid accumulating too much of your overall savings into any one company. This is when you want to diversify into several companies and /or sectors of the stock market.

A good rule of thumb: Never let any single company's stock grow to more than 15% of your overall savings. Markets may take a dive and bounce around, but they eventually come back. Some companies, however, never recover and your investment goes with it.

Remember, you can always automate: One way to automatically achieve total diversification is through Target Dare or Target Retirement Funds. With these, it's perfectly OK to go 100% into just one fund. That's because a Target Date Fund is made up of several different types of stocks and bonds.