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Lauren’s blog covers topics that impact your finances, your family, and your future. Is there a topic you’d like Lauren to tackle? We’d love your suggestions and feedback.

September is the perfect time for a financial la rentrée!

September is the perfect time for a financial la rentrée!

I’ve been a Francophile for as long as I can remember. I’ve studied the French language (and used to be pretty darned good!). As I teenager, I spent two full summers as a student in the South of France in Aix-en-Provence and Grenoble. I fell in love with French culture, food, literature and, yes, even some cute French boys! When late August rolls around, I’m sure I’m not alone in wanting to emulate the French who, like the rest of Europe, almost completely shut down for a much needed (and completely un-American) two-week-long vacation. But there’s something new about France that I only recently discovered: the French tradition of la rentrée.

As you might expect, la rentrée does have some association with back-to-school season, but it’s about so much more than school children. La rentrée is a time when everyone—school children, yes, but also authors, politicians, and even newscasters—returns from the summer break filled with a nationwide sense of optimism for a fresh beginning. We may be thousands of miles away from Paris, but in the spirit of all things French, I’m on a mission to create our own financial la rentrée right here at home.

The best thing about la rentrée is that it doesn’t feel like a chore. There’s no word to describe it in English, but the closest I can come to putting it into my own words is that while there may be work to be done, each task is approached with hope and happiness and positive energy. Here are five simple steps to kick off your own financial la rentrée this month:

  1. Review your tax strategy.
    With autumn comes the final stretch of the tax year, which means that it’s your last chance to make changes that can have a real impact on your tax bill come April 15. While tax planning is important every year, the new Tax Law makes careful planning particularly important in 2018. As I wrote in my recent tax planning blog post, the current tax tables may understate your withholding, so now is the time to compare your actual withholding amounts with your projected tax bill, and to seek out other opportunities to optimize your taxes.

  2. Check your credit report.
    When is the last time you checked your credit report? Monitoring your account balances and financial transactions is very easy and it’s the best way to prevent identity theft and fraudulent use of your credit history. I recommend CreditKarma which offers unlimited and free access to your credit report, as well as a free credit monitoring service. I also like the idea of placing a credit freeze on your account which requires institutions to contact you before approving any new request for credit. Learn more about protecting your financial privacy in my blog post Getting personal about privacy.

  3. Weigh your cash balances.
    Cash planning is the foundation for any solid financial plan. If you don’t already have a sufficient “freedom fund” of cash, read why it matters and how to get started in my post There’s no such thing as an unexpected expense. If you do have your fund in place, take a look at how your balance has changed in the past year. If your balance is increasing significantly, you’re likely living below your means and may need to review your financial plan to be sure you are making your money work effectively. If your balance is decreasing, take a close look at why. If you’re living beyond your means or not saving appropriately for vacations, household purchases, and other “expected expenses,” an adjustment is in order.

  4. Review your long-term goals.
    Are your financial goals SMART: Specific, Measurable, Achievable, Relevant, and Timely? Are they in writing? As I wrote in my last blog post Am I on the right path?, whether you are investing your time, your money, or both, you need a plan. Reviewing that plan regularly to be sure you’re on track toward your vision of the future is a must. Sit down and spend some dedicated time to explore your goals today—alone or with your partner if you have one—and create a SMART plan to get there on time and on target.

  5. Get help with the details.
    When I was in my 20s, I was able to keep myself motivated and physically fit all on my own. These days, not so much. That’s precisely why I hired a personal trainer. Nancy S. knows how to get me in shape and how to keep me motivated throughout the process. Most importantly, she points out things I didn’t know about how to get and stay fit and healthy. When it comes to your finances personnelles, a Certified Financial Planner (CFP®) can be your dream coach. A CFP is trained to help you identify SMART goals and create a realistic plan to get you where you want to be when you want to be there. No matter where you are in your financial life, hiring a fiduciary advisor may be the best la rentrée activity there is.

La rentrée is all about optimism and creating a fresh start.My personal la rentrée this year has been focused on rediscovering my love for French. I’ve been brushing up on my vocabulary and grammar using the Duolingo app (if you want to discover or rediscover any language, I highly recommend it!), I’ve been nose-down in Martin Walker’s Périgord-based detective series Bruno: Chief of Police, and I just discovered a French-language podcast called Coffee Break French that I can’t wait to start. I’m on my way to better, more proficient French and having fun along the way. I hope you’ll join me by embarking on your own la rentrée to improve your finances. What a wonderful way to slip into autumn. And if you do need help to make it happen, you know where to find me. À bientôt!

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’Tis the season for gifting

Photo credit: Sarah ParrottMost of us receive many gifts during the holidays, and when a beautiful gift arrives that was carefully selected just for you, it warms your heart. That’s how I felt when I received a gift acknowledge-ment from ElderHelp of San Diego last week. ElderHelp is a non-profit organization dedicated to helping seniors stay in their homes, and the note said that a donation was given in our name from Cindi Hill of Hill Compliance Advisors, our compliance consultant. As someone who spends a large portion of my time seeking out innovative solutions to help my clients retire on their own terms, this was a particularly thoughtful gift.

If you’re still looking for the perfect gift for someone who doesn’t need any more “stuff” (or, like me, is on a diet and certainly doesn’t want any food STUFF!), giving to their favorite charity may be just what you’re looking for. Of course, gifting can take many forms, and many are also tax deductible, which can give the ability to be even more generous than you might think.

Facebook CEO Mark Zuckerberg clearly understands the value of a tax-deductible charitable donation. If you’ve been paying attention to the news at all, you’ve surely heard his announcement that he and his wife Priscilla Chan made a promise to their newborn daughter to give away 99% of their Facebook wealth “to advance human potential and promote equality.” And while some have criticized the Chan Zuckerberg Initiative for its tax-deductible status, what many fail to realize is that the tax benefits won’t simply put more money back in Zuckerberg’s pocket. Zuckerberg and his wife have been very careful about how they are donating assets, creating an LLC to maintain a great deal of control over how the gifted assets are used. Theirs is a great example of a well designed charitable giving strategy that truly becomes “the gift that keeps on giving.”

Sure, most of us (I can safely say none of us!) don’t have that level of expendable assets to gift, but there are many ways to support your favorite charities this holiday season while also achieving year-end tax benefits. I know my own inbox is overflowing with year-end appeals from charities I know and love, as well as many that are new to me. Whatever you choose, keep good records and remember that all donations must be made by December 31 to be eligible for 2015 tax credits. Following Mark Zuckerberg’s lead, it’s a great time to take control of your money by directing it to the charities that mean the most to you instead of giving it to Uncle Sam.

Clearly there’s not much time to plan, but here are a few options to consider:

  • Set up a Donor-Advised Fund. These philanthropic funds give you a current-year tax deduction while making thoughtful, intentional gifts in subsequent years. Since many smaller nonprofits aren’t set up to receive gifts of stock or other complex holdings, this is a great option if you’re donating non-cash assets. Plus, by giving to a donor-advised fund, you avoid capital gains tax. Your contribution is treated as a gift to a 501(c)(3) public charity, and you are allowed to deduct up to 50% of your adjusted gross income for cash gifts, and 30% for appreciated securities. If you’re interested in this option, we can help, but call us immediately to be sure we can get everything in place by year-end.
  • Look for charities on www.charitynavigator.org. If you’re not sure where to give—or are worried about your money going to a less-than-reputable organization—the site rate’s charities by financial health, accountability, and transparency, and you can easily browse charities by categories such as human services, environment, education, animals, arts & culture, public policy, and more. All charities listed qualify for 501(c)(3) tax-exempt status. If you do choose to give, be sure to tell you advisor and your CPA to ensure proper tax crediting.
  • Donate from your IRA using a Qualified Charitable Distribution (QCD). If your IRA is overfunded, not only are you in an enviable position, but year-end legislation finally made QCDs from IRAs permanent (in the past, the rules came and went, making it a gamble to take this approach in hopes of a tax benefit). Donations are limited to $100,000 of tax-deferred IRA savings annually, and offer a significant advantage over taking a taxable IRA distribution and then contributing the proceeds to charity, as QCDs are not included in adjusted gross income.
  • Donate household items. If my last blog inspired you to declutter, Boxing Day (the day after Christmas) is a great time to box up items and send them off to new homes via Goodwill, The Salvation Army, the Vietnam Veterans of America (who will usually pick up items at your door within 24 hours). Clearing out your pantry and making a donation to your local food bank is another great option (we give to Second Harvest). Whatever charity you choose, be sure to save your receipts for tax time.

Of course, if you’re just looking to give and tax benefits aren’t a priority, there are always great causes to be found on GoFundMe—helping families in need due to death, injury, or other personal tragedies; supporting individual volunteers, natural disaster recovery, and more. All told, Americans make 30% of our annual donations in December. I hope you’ll take part in the “season for gifting,” however you choose to give.

Need help setting up a donor-advised fund, QCD, or other vehicle for charitable donations? Please contact us right away to be sure we can meet the December 31 deadline. As always, I’m 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 >