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Finding joy in January: 4 simple steps to sidestepping the post-holiday blues

Finding joy in January: 4 simple steps to sidestepping the post-holiday blues

Ah, December. It can be a whirlwind of activity filled with friends and family, and it seems the whole month is fueled by the motto of “Eat, drink, and be merry!” Even as I write, the flood of wonderful food and delicious drink is flying at me fast and furious. Last week alone I had a holiday party on Saturday, my daughter Jamie’s birthday celebration on Sunday, Hanukkah with the kids on Monday, dinner with a friend Tuesday, my bridge group on Wednesday—and the indulgence didn’t stop there. At home and at work, I’ve been giving and receiving food gifts galore. Latkes. Cookies. Candies. That Harry & David popcorn! And bottles (and bottles) of wine. It seems our culinary generosity goes hand in hand with our generosity of spirit this time of year, and I wouldn’t trade either for the world.

Of course, we all know the party can’t go on forever. Here are four simple steps—starting today—that can help you make the merriness of the holidays last all year round:

  1. Give experiences to make your holidays merry.
    Instead of buying costly gifts for his children this year, my friend Mark opted to take his family to Escape the Place, an “escape room” in Lake Forest for a special holiday adventure. CaroleAnne (our favorite marketing consultant!) gave her mom a day of singing together at the Holiday Sing-Along at Disney Hall. Jamie and I celebrated her birthday with an evening at a special restaurant. Celebrate with experiences that are meaningful to you, and the memories of your time together will last much longer than even the “hottest gift of 2017.”

     
  2. Take actions that deliver generosity—without breaking the bank.
    It’s easy to think that generosity requires spending (and often over-spending) money. But there are many other ways to be kind and giving. On Christmas Day this year, I volunteered to serve meals to the residents at Heritage Pointe while the staff enjoyed a day off. Rather than buying expensive hostess gifts for every party, my friend Laura bakes her “family secret” biscotti, seals a few in a mason jar, and includes a note: “Do not open until January 2!” What a great way to stretch her budget and extend the holiday joy into the New Year!

     
  3. Get moving—and get still.
    The mind/body connection is powerful, and even if you managed to fend off those extra pounds during the holidays, a routine of something—anything!—physical could keep the blues away as well. Walk. Swim. Hike in nature. Head to a yoga class. And if you aren’t already a fan, try meditating. My Sangha meditation group has helped me learn how to reap the benefits of stillness and mindfulness, and there are even mediation apps for your phone (check out Buddhify or Headspace). Whatever change you choose, try to make it your favorite new habit in 2018.

     
  4. Be intentional about changing your state of mind—especially after the holiday excesses.
    Rather than merely accepting the holiday blues, take steps to change your state of mind. I’m a lifelong journaler, and I plan to include gratitudes in my morning pages. Have a date with yourself for a drive up the coast. Visit a museum. Or just relax with a great cup of coffee at a new bistro. Even the simplest things can change your state in a heartbeat: read, move, meditate, laugh, or hang out in nature. With a little intention, you can cultivate a state of mind that exudes positivity.

We celebrate in ways that make the post-holiday holiday blues seem inevitable. It doesn’t have to be that way. Like any habit, creating a joyful state of mind takes planning and practice. With these simple steps and a good dose of clear intention, you really can get there! And if post-holiday finances are creating a bit of less-than-joyful stress, let’s talk. After you finish off that last glass of New Year’s Eve bubbly, remember, as always, I’m here to help!

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Sex, religion, politics… and money. Breaking the silence.

Sex, religion, politics… and money. Breaking the silence.

Most of us learned early on to avoid three things in polite conversation: sex, religion, and politics. Oh, how times have changed! Today, sex, religion, and politics seem to be the hottest topics—in the news and on the tips of everyone’s tongues. Unfortunately, few of these conversations are spurring rational, thoughtful discourse (often quite the opposite). And while it’s unlikely any of us can personally shift what seems to be the new societal norm, the one conversation we can shift is the one about taboo-topic number four: Money.

In my last blog post, I wrote about the importance of having “the money talk” before you get married. But what about the rest of the time? Talking about money before you say “I do” is important, but breaking the silence and keeping that conversation going in every relationship in your life can deliver some fantastic benefits. A stronger financial partnership with your spouse or partner. Better balance between your long-term and short-term goals. More financially aware children. A better understanding of your aging parents’ financial needs. And less money-related stress for everyone.

It’s a grand goal, but fostering healthy money conversations can be a challenge, especially when we’ve been taught that money talk is as taboo—if not more so—as sex, religion, and politics. In my own family, my parents seemed always to be talking about money. While it seemed to be their favorite topic, the taboos still existed. They talked (and argued) about money, but they never, ever mentioned amounts. Were we rich? Were we poor?  I never knew. But I do know I walked away with my own deeply held beliefs about money, and not all of them were good.

I’m not alone in that experience. I meet many people who don’t know a thing about their parents’ assets. They don’t know if Mom and Dad have enough saved to fund their old age (which can have a dramatic impact on the finances of their adult children). They don’t know if their parents have an estate plan, if they have any significant debt, or how they plan to pass on their assets to the next generation. Worse yet, many people carry on that tradition of money secrecy into their own relationships—and bring a whole lot of money “baggage” along for the ride.

It’s a tough cycle to break. Not only do many of us lack the vocabulary to talk about money, but breaking free from our old ways of thinking can be a huge challenge. If a friend or co-worker asks how much money we make, we cringe and wonder, “How can she ask me that?! She broke the rules!” The better question is, “Why wouldn’t she ask?” Does the question bring up negative emotions? Self-judgment? Pride? Ego? Shame? Consider this: What would the conversation be like if we could let go of those emotions and have a real conversation about money?

While you might not be ready for the leap of discussing your salary at work (though I urge you to get there eventually), the place where it is vital to start talking about money is in your own home. The first step: explore your money mindset by looking at the conversations you have with yourself about money. Ask yourself these questions and think deeply about the answers. Don’t be surprised if your answers run the gamut—from easy or exciting, to stressful or shameful, to downright emotional. Remember that there’s no right or wrong. Just be as honest with yourself as you can:

  • Talking about money is                       ?
  • Talking to my romantic partner about money is                       ?
  • Talking to my parents about money is                       ?
  • Talking to my children about money is                       ?
  • At work, money is                       ?
  • My parents taught me that money is                       ?
  • My religion taught me that money is                       ?
  • My biggest fear about money is                       ?

Once you’ve thought about your own responses, ask your spouse or partner to do the same—and then share your answers with each other. It’s a great way to open up the channels of communication and understand your unique perspectives about finances. It may suddenly make complete sense to you (and to him) why your spouse has a hard time putting money away for that next vacation, or why your stomach drops every time you take on even a little extra debt. There’s nothing like good communication to foster understanding.

Of course, understanding your partner’s perspective isn’t the same as agreeing with it. Money problems rank as the number-one reason for divorce, and it’s no wonder. In her book Breaking Money Silence: How to Shatter Money Taboos, Talk More Openly about Finances, and Live a Richer Life, wealth psychology expert Kathleen Burns Kingsbury suggests couples agree to the following rules for whenever money is a part of the conversation:

  • Be respectful.
  • Use “I” statements.
  • Listen actively.
  • Don’t mind-read.
  • Practice curiosity.
  • Agree to disagree.
  • Reward yourself.

Following these basic guidelines can help you turn money arguments into real conversations that spur the rational, thoughtful discourse that can lead to better decisions, better finances, and yes, better relationships. And if you find that you need assistance appreciating each other’s differences and working together toward a more sound approach to your finances, a financial advisor—especially one trained in mediation techniques—can be a tremendous benefit. As always, we’re here to help.

Let the conversations begin!

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Getting married? Unless you’re royalty, it’s time to talk money!

Getting married? Unless you’re royalty, it’s time to talk money!

On Monday, Prince Harry and Meghan Markle announced their engagement, and the media (and everyone I know!) is buzzing about the news. The royal wedding is scheduled to take place in May at Windsor Castle, and I’m sure the bride-to-be already has her eyes set on a wedding gown. The good news for them is that, while I’m sure they’ll have many challenges of their own to face in the years to come, one issue they’ll happily be able to sidestep is money.

Unfortunately, all too many soon-to-be couples who are far from royalty make the mistake of sidestepping the money talk before marrying. It’s a move that can lead to painful consequences.

  • Angela is money wise and has a generous spirit. Her husband Alex is very controlling, especially about finances. They have a healthy marriage, except when it comes to money. She enjoys spending what they can easily afford, but she knows that even the smallest expense will be an issue for Alex. Rather than argue with him, she regularly borrows or withdraws money from her 401(k). They don’t discuss it—until tax time when her 1099 arrives, and her withdrawals are right there in black and white. Her rationale: at least they only argue about finances once a year.
     
  • Bruce is the self-appointed CFO of his family—but he doesn’t have the skills to do the job well. When money is tight, he tries to keep the shortfall under the radar from his wife, Lisa. But that approach only works for so long. Soon the bills begin to mount and the truth is revealed. It’s a pattern that Lisa (and I) have watched repeat itself over and over again.
     
  • Patricia, a long-time client, died recently, and I’m now working with her adult children to manage their inheritances. Her daughter’s husband is already planning how to spend the windfall; he seems to have mixed emotions about the fact that his wife now has her “own” money. In contrast, Patricia’s son and his wife seem to be excellent financial partners; they’ve already placed the funds in a joint account and are working together to decide whether they want to spend, save, or invest the assets.

I have to wonder how things might be different if these couples had ironed out the details of their financial lives together from day one.

Whether you are marrying for the first time, blending families, or enjoying a later-in-life union, your life partnership is about more than your love for each other. Some of the best marriages have been broken by that troublesome nemesis that is money. The good news is that, with proper planning, money can also serve as a foundation for a wonderfully healthy marriage. But it all starts before you say “I do.”

What every couple should understand is that marriage is (hopefully!) rooted in love, but it’s also a business transaction. When you marry, you are forming a legal partnership that involves many rights and responsibilities. Before you take the next step from two legally and financially independent people to becoming a married couple, take the time to work out the business details of your relationship. Think of it like opening a shop together—and have a little fun.

Start by taking a close look at your current financial reality. Consider each of your personal incomes, what you spend, and what you save and invest. Determine your individual net worth and share your credit scores. This information serves as the starting point for your financial future. Next, combine your balance sheets and agree on how, and if, you want to use your joint assets together.

Next, create a set of bylaws and assign roles and responsibility. Who will serve as the CFO (learn from Bruce: don’t assume the role for yourself!) and who will be the bookkeeper? Agree upon how you will make financial decisions, including your household budget and large purchases such as a new home, a major remodel, or a new car. Talk through a process to handle financial challenges or disagreements. (Yes, they will happen!) If there are children from a prior relationship, what do you need or want to do for them? Will you both help fund their education? Will you pay for their weddings? At what age will you stop offering financial assistance? If you have siblings, friends, or aging parents who may need financial help, how and when will you be willing to step in?

Now comes the fun part: creating your shared vision for the future and drafting your strategic plan. This is when you align your dreams and set the path for a happy tomorrow, and it’s one of the most important things you can do as a couple. If your spouse imagines a simple retirement cabin on a lake and you fantasize about the hustle and bustle of Manhattan, there’s bound to be conflict down the road. Share your vision for five, ten, and twenty years into the future, and discuss how to combine your ideas and bring those dreams to life.

The last step is to put your plan in writing. Like any successful partnership, your agreements must be written down. Putting pen to paper clarifies the details, and it’s the best way to avoid miscommunication now and for years to come. Finally, review it all every year—because as we all know, life happens. And when you need help aligning your reality with your goals—or creating a shared management process that works for both of you—a financial advisor can be a tremendous help. The newest royal couple may never have to worry about managing debt or how to invest their nest egg, but for everyone else tying the knot, now is the time for the money talk! 

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Just for caregivers: 7 Dos and Don’ts to protect your financial future

Just for caregivers: 7 Dos and Don’ts to protect your financial future

Caregiving. It’s something I can speak to firsthand. When my late husband Ed suffered a severe stroke decades ago, I suddenly confronted a whirlwind of emotional, physical, and financial stress. It’s no wonder that I found myself having flashbacks when I read the results of a recent survey of 2,000 caregivers. The findings are frightening, but they tell a story that won’t surprise anyone who has been a caregiver for someone they love.

According to the survey, nearly three out of four respondents said that their personal financial situation causes them stress, and 92% said they help manage the finances of the person for whom they are providing care—from paying bills to handling insurance claims to dealing with debt. While struggling to manage another’s finances is certainly stressful, caregivers also tend to allow caring for a loved one to impact their own finances. Of those who help their family members financially, 30% said they’ve cut back on their living expenses to do so. Twenty-one percent have dipped into retirement savings. And 24% had trouble paying their own bills.

It’s a heavy burden. Financially and emotionally. The vast majority of caregivers—nearly 70% according to the National Center on Caregiving—are women. Since women as a group struggle more than men financially, this puts us in even greater peril to achieve financial security and confidence during our lifetimes.

I’ll tell you straight out that it is our giving nature—not our financial smarts—that puts us in that peril. My own story is a perfect example. There I was, a successful financial advisor, helping my clients make the best possible financial decisions. Yet, during Ed’s long disability, I was challenged by my new reality—being the sole earner while also being a caregiver. I was overwhelmed with the emotional side of the equation. As I was leaving the hospital to take Ed home, the case manager’s words filled my heart with even greater fear: “I guess it’s time to start spending down your assets.” And though I knew better, her chilling words cut me to the core. After all, my goal was to take care of my husband, but I was also a financial planner and swore not to put my financial security at risk.

Ed and I had been on track financially. Yet despite carefully managing spending (and feeling guilty every time I turned my focus to money), by the time Ed died, I had gone from financially comfortable to more than $80,000 in debt. Did I know what we were spending? Yes. But I simply couldn’t get myself to look at the numbers. As a result, I made some major financial missteps.

The good news: you can learn from my mistakes to avoid making them yourself. Here are my 10 “dos and don’ts” that can help every caregiver make better, smarter financial decisions—even when you’re in an emotional fog:

  1. DO recognize that your loved one may no longer have the ability to make wise decisions,financially or otherwise. Like caring for a child, you will need to make hard decisions—even when your loved one resists.
     
  2. DO have proper powers of attorney for healthcareand financial matters in place before a health issue arises—and use them when the time comes!
     
  3. DO have a written record and spending plan. Tracking expenses and knowing your budget is vital.
     
  4. DON’T confuse highest cost and what is best for your loved one. Consider the physical and mental needs of your loved one when choosing the best care option. A beautiful facility with extensive activities may not make sense for someone who is confined to a wheelchair or has advanced dementia.
     
  5. DON’T let your personal relationship with caregiver employees impact financial decisions. Be sure you’re paying the market rate for care, and maintain an arm’s length employer/employee relationship.
     
  6. DON’T give in to emotional blackmail.Make the best decisions based on your loved one’s current health and financial situation—not based on old promises to others or to yourself.
     
  7. DON’T neglect to keep your own financial house in order.Caring for a loved one can easily become your only focus, but caring for yourself and your future is just as important.

I learned the hard way what to do—and what not to do—when managing finances as a caregiver. Since then, I’ve focused my practice on helping women make smarter financial decisions, especially in situations when emotions can lead to disastrous results. One of the most important things you can do to help keep your finances afloat is recognize that your own emotional biases can lead to poor financial decisions—no matter how smart you are. To help stay on track, work with a financial advisor who can help you step back and look at the big picture.

As they say before every flight, in case of emergency, put your own oxygen mask on first so you’re able to help others. The same is true when you’re serving as a caregiver. By making your own financial security a priority, you can increase your capacity to care for your loved one—without sacrificing your own future.

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It’s Open Enrollment time! Act now to be sure you’re covered in 2018

It’s Open Enrollment time! Act now to be sure you’re covered in 2018

If Open Enrollment has you perplexed, you’re not alone. Medicare is a messy can of worms, the menu of corporate benefits seems to get bigger every year, and the Affordable Care Act—also known as Obamacare—seems to be changing by the minute. But picking appropriate coverage is one of the most important things you can do to protect your physical and financial health. Here’s what you need to know to get started:


Medicare

Whether you are already enrolled in Medicare or you’re turning 65 this year and are new to the maze of options, the enrollment process can feel overwhelming. Almost everyone is eligible and must enroll in Medicare Part A, which covers hospitalization. There are many Medicare Part B options, and the choice is not simple. Then there is Part C—Medicare Advantage Plans that often sound too good to be true (think free gym memberships, cheaper drug plans, and more) but come with some limitations and costs. Medicare Advantage plans replace Medicare Part B, and not all Part B options may be available if you change your mind—even during Open Enrollment. Making the best possible decision from the start is vital. There are also multiple drug plans, and your best choice depends on your current prescription needs, which means an annual reassessment of your drug plan is a must.

The good news is that help is available. HICAP (the Health Insurance Counseling & Advocacy Program) provides objective information and counseling about Medicare. The service is very good—and it’s free. Of course, we’re always here to help as well. Open Enrollment for Medicare closes on December 7, so be sure to explore your options now rather than rush your decision as the deadline looms.


Corporate Benefits

If you’re fortunate enough to have a corporate benefit plan, take advantage of Open Enrollment (which is likely happening right now) to review and update your benefit elections and make the most of your options.

  • Health Insurance. Most companies offer a variety of options, including PPO, HMO, and HealthSave plans. The costs for these plans vary widely, so it’s important to explore the options carefully to choose the plan that balances premium fees with out-of-pocket expenses based on your family’s expected health needs. If you have access to dental and vision insurance, take what’s available to be sure you and your family are covered.
     
  • Life Insurance. Life insurance is not for you, per se, but to replace your income to support your dependents. Group life insurance offered through your employer is often priced well, so do take advantage of it. However, corporate coverage does not protect your insurability when you leave the company due to a job change or retirement. Plus, because the premiums for group life insurance go up every year, private, level-term insurance is sometimes a better option. Work with your advisor to determine if supplemental private life insurance makes sense in your situation. And while many plans offer coverage for your children, this typically makes sense only if you don’t have funds for funeral expenses.
     
  • Disability Insurance (DI) and Long-term Disability Insurance (LTD). Knowing that the chance of becoming disabled in some way is much greater than the chance of dying early, this is likely the most important insurance you can buy. It’s expensive, but considering that it covers 60-70% of your salary should you become unable to work, it’s well worth the price tag. Note that because you pay for group DI with pre-tax dollars, the benefits are taxable income. Private DI is paid with after-tax dollars, so the benefits are tax-free, which can make it even more valuable. Talk to your advisor to determine your best option.
     
  • Health Saving Accounts (HSAs). If you have access to an HSA and can afford to pay the high deductible required, these plans can be a great retirement savings tool. HSAs allow you to contribute using pre-tax money, invest that money in mutual or other funds to maximize growth potential, and then withdraw assets for qualified medical expenses tax-free.
     
  • Flexible Spending Accounts (FSAs). Unlike HSA contributions that can be used at any time, contributions to an FSA accounts must be used in the same calendar year. FSA contributions can be used for health care and dependent care, and they can help reduce your taxable income. The key with FSAs is to plan well to be sure every penny is spent before December 31.
     
  • Accidental Death & Dismemberment (AD&D). This is one benefit that I rarely recommend. Yes, it’s cheap, and yes, it offers an extra boost to your life insurance benefits in certain cases, but this is one lottery you don’t want to win. Your dollars are probably better spent elsewhere.
     
  • Pre-paid Legal Plans. It’s easy to overlook a legal plan, but it can be one of the more valuable benefits, primarily because these plans offer low-cost access to legal assistance that could otherwise come with a hefty price tag. While I don’t recommend using this type of service for complex legal needs, from updating your Will and Powers of Attorney to reviewing rental and other agreements, a pre-paid plan may be the key to taking care of these important tasks sooner rather than later.

The Affordable Care Act (Obamacare)

Thanks to the current administration’s push to derail Obamacare, there is more confusion than ever about choosing ACA health plans. In California, the Open Enrollment period for 2018 opens November 1 and closes January 31, 2018. This is for all plans selected through Covered California and in the open market. Despite all of the news in Washington, the plan still offers tax credits and cost-sharing subsidies to help those who qualify afford premiums and reduce out-of-pocket costs. That doesn’t mean nothing has changed. Rates for all plans are being raised by about 12% due to the annual rate hike, and silver-level plans are increasing by an additional 12.4%. Actual premiums depend on factors such as where you live, your income, what level of coverage you choose, and which insurer you pick.

Just like with Medicare, it’s wise to get help when choosing your options. The Covered California website offers online videos and information on where to get in-person help from a certified insurance agent.


Choosing your benefits may not be the most exciting item on your to-do list, but Open Enrollment is only open for a limited time, so be sure to make the time to explore your options and make smart choices for you and your family. If you need more guidance, please reach out. We’re always here to help!

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All written content on this site is for information purposes only. Opinions expressed herein are solely those of Lauren S. Klein, President, Klein Financial Advisors, Inc. Material presented is believed to be from reliable sources and we make no representations as to its accuracy or completeness. Read More >