The Silver Purse

Seduced by Shopping

2011-12-04T11:15:00.000-08:00

Why do women have the reputation of loving to shop? Probably because we do more of the nation’s shopping than men do.

We buy groceries for ourselves or our families, we buy clothing for ourselves, children, and spouses. If your spouse is like mine, he avoids clothing stores, happily wearing what I buy him. In short, we women spend considerable time in stores.

Marketing gurus, and the clever people hired to create those attractive store displays often cater to women’s interests. The mall is a perfect example. Colorful themes draw us in, glittering jewelry displays entice, and music and the smell of cookies and perfume overload the senses. Everywhere there appears to be an abundance of interesting and useful products that promise to make us happy.

I sometimes find myself walking the aisles of a store, but forgetting what I really needed because I’m distracted by the displays. I might just need some socks, but socks are never in the front. You’ll have to walk by the purses, the shoes (two things women love), the jewelry display and more before you find the socks. They must teach courses in product placement to get us to buy more.

Who benefits from more sales? The stores and corporations do, of course. Who is hurt by unnecessary spending? Mostly women, since we spend more time in stores. It’s our bank accounts that drain down, our savings that stay flat, our future choices that get limited when we focus more on today’s spending and neglect tomorrow’s needs.

Now, I’m not against spending, but unless you’re Paris Hilton, your income is limited and choices need to be made. You’ll need to balance the needs of the present with the needs of your future. In your future, there will probably come a time when you’re unemployed, or staying home to raise a child, or you need to retire after decades of work. Where will your income come from then?

It will need to come from your savings. In the natural world, squirrels and other animals save part of their harvest for uncertain times in the future. Survival and comfort are more assured when we “squirrel away” something for later. At The Silver Purse.com, we recommend saving 10% or more of your current income for later needs.

Worried that you won’t benefit from it today? Relax, it’s still got your name on it in your bank or investment account. You will have planted a seed that will grow over time into a sheltering tree for you and your loved ones. Redwoods can’t be rushed, and neither can your investments.

If you start saving early in your life, you’ll create a solid foundation that will give you more choices later on. And with the power of compounding, the growth of your money over decades can be huge.

So, next time you take that trip to the mall, think about the choices you have, and listen to your future self whispering. It’s calling too. It says, “Send more money!”

How do you avoid spending too much during the holiday season?

How do your money beliefs affect your success?

2011-10-10T16:04:00.000-07:00

Can psychology and beliefs harm or help your financial success?

I just finished reading a couple of books by Barbara Stanny, a leading authority on women and money. Her story is interesting. She is the daughter of one of the founders of the famous tax preparation firm, H&R Block.

In spite of being in a prominent family with lots of wealth, she was never taught financial basics. Her first marriage ended in divorce after her husband squandered most of her inheritance and left her with very little but a million dollar tax bill she couldn’t pay.

Determined to figure out why this had happened, and needing to support herself and 3 young daughters, she studied the psychology of money--especially relating to women. She researched and wrote 3 books: Prince Charming Isn’t Coming, Secrets of Six-Figure Women, and Overcoming Underearning™.

How does this relate to you? Many women find they are dissatisfied with their earnings and/or concerned about their financial future. This translates into symptoms ranging from a mild lack of fulfillment, to stress, strained relationships, and even a life of hardship and unhappiness.

Women tend to underestimate their worth, prioritize caring for everyone else first, and feel undeserving when it comes to “wealth.” This creates a perfect stew of crossed emotions that doesn’t serve us well.

Very few women (or men) have been taught the skills to create both financial success and personal fulfillment. We’d all love to find that perfect balance of work and life that reward us amply, and also provide us with time to recharge and refresh.

Enter the book, Overcoming Underearning™. In it, author Barbara Stanny lists 5 goals for her readers:

1. Change your relationship with money.

2. Explore your blocks and barriers to success.

3. Inspire you to think bigger.

4. Keep you on the path.

5. Encourage you to share what you learn.

I was inspired, challenged and enlightened by the book. Here’s the link in case you want to read it.

http://www.amazon.com/Overcoming-Underearning

I realized no amount of training or knowledge can help a woman find financial success if she doesn’t first get clear about what she wants, how she relates to her finances and self-worth, and what unconscious barriers may be holding her back. And yes, we all have unconscious “blocks and barriers”—some even coming from childhood.

The Overcoming Underearning™ book includes worksheets, inspirational quotes, and exercises. It’s more than a book about earning more or financial success. It’s a book about personal growth, with financial success tagging along in its wake.

One of Barbara Stanny’s recommendations is to find “True Believers, Confidantes, and Way Showers” to help you reach goals. Think about the people in your life who truly believe in you, the people in whom you can confide, and those who can show you the way forward. (Try to steer clear of the “Naysayers” Group.)

If you don’t have appropriate people to help you, consider reading Barbara Stanny’s book or finding additional help through mentors.

I recently spoke with a colleague from New York City, Lora Sasiela, an experienced “money therapist” and Licensed Clinical Social Worker (LCSW). Lora calls herself a "Money Makeover Artist" who specializes in helping women move beyond money barriers and blocks. Her e-book, Girl Meets Money, is a fun and sassy short read with actionable tips. Here’s the link, and the free e-book sign-up is on the right side of the page. Enjoy!

http://www.financiallysmitten.com/meet-lora/

Lora is generously offering a “Breakthrough Session” to members of The Silver Purse community for 25% off. This special offer runs from October 7^th to October 14^th midnight EST. Use the special coupon code “SILVER” to get the discount. Here’s the link to find out more about her sessions, which are done by phone.

http://www.financiallysmitten.com/breakthrough-session/

Whether you dive in with a professional, or just tune in to the topic of Behavioral Finance on The Silver Purse website (Mind and Money)--pay special attention to your beliefs and thoughts. I believe they offer a secret key to long-term financial well-being.

Fairy tales and timing the market

2011-08-28T16:45:00.000-07:00

I loved fairy tales when I was young. They always conveyed a gentle lesson through the power of story-telling--and who doesn't love a good story?

Fairy tales often came in 3 parts: a myth that ends up getting busted (like princesses can't take care of themselves), some magic that might involve effort or a new way of thinking (the princess steps out of her traditional role and saves her people), and a moral (things aren't always what they seem.)

So how does this relate to investing and building financial security? Let's look at one of the biggest challenges people have--when is a good time to invest?

Here's one fairy tale about timing and steadiness.

Fairy Tale: The tortoise and the hare

In the fable, the tortoise and a hare (rabbit) made a bet on which one would get to a finish line fastest.

The hare was cocky because he knew he was 10 times faster. Both started the race at the same time. The tortoise plodded along, slowly but steadily putting one foot in front of the other and not stopping.

The hare, on the other hand, raced ahead, leading by a wide margin, then stopping to indulge in breaks, since he figured he could always make up the difference later. On one of these breaks, he fell into a nap. The steady tortoise finally passed him dozing under a bush, and crossed the finish line first to win the race.

What 3 elements here can be related to your "journey" towards financial security?

Myth: Believing investments are safer to buy only when they show current strong performance is the way to profit.

Magic: Buying small, regular amounts of investments no matter what the market is doing can pay off. The technique of "Dollar-cost averaging" buys more shares when the price is lower and fewer shares when it’s higher. Over the long term, it’s a truer, more secure and steady way to build wealth.

Moral: It’s what you do on a steady, regular basis that determines your long term financial success. Remember, it's the time you spend in the market, rather than timing the market that counts.

Don’t assume everyone else is always faster/better/smarter with their money. And don’t give up before you’ve even begun. Steady investing, even of small sums, can lead to long-term rewards. Reminder--the race can’t be won until you start.

How dollar cost averaging works--Wikipedia link. What's your biggest challenge when it comes to reaching your investing "finish line?"

Desert or Garden in Your Future?

2011-06-12T11:31:00.000-07:00

I attended a conference in Tucson Arizona last week. The conference was engaging, instructional, and full of great networking.

But one of my biggest "Ah-ha" moments happened on route, as I drove through hundreds of miles of desert.

The laser straight freeway dissolved into watery mirages in the distance. Rocky, chocolate-brown mountains lanced the sky with sharp castle-like shapes. Hot dusty winds buffeted the cars and trucks as they whizzed through this dry, almost empty landscape. Landmarks like Tonopah and Coyote Gulch broke up the driving monotony.

It led me to think of how life could be sustained in the desert. In fact, it's harsh and almost impossible unless one can find water and shelter.

The same harsh reality faces people--especially women--who don't put something away for their future and retirement years. They will face a desert, with no resources except the sparse greenery of a small Social Security check.

I ran across an article a while back titled, "Can you live on $987 a month?" It referred to a then-average net Social Security check. This works out to less than $12,000 per year. Most people would be scratching around to make ends meet-- just like the desert tortoise. They'd be in a land of scarcity--just like the desert.

I'll admit here that I spent years of my childhood in a desert, and have a certain fondness for wide-open spaces with distant vistas. But I also learned some skills to survive, and a healthy respect for the dangers of the elements.

So, what does it take to turn your future from a harsh desert into a more comfortable garden, replete with water, sources of food, and creature comforts? You probably know part of the answer, but I'm going to offer you the rest.

You can sign-up for this free ebook/ report called "Six Steps to a Bigger Retirement Paycheck." I promise, it's a fast read and I've thrown in some light-hearted surprises to keep it fresh.

Don't let your future be trying to survive in a financial desert. Plant the seeds now to grow a blooming oasis with foods to harvest. Start here.

Golden Opportunities

2011-05-14T16:03:00.000-07:00

Sometimes life offers you golden moments. Other times, life gives golden lemons. Either way, there is something to learn.

In the last couple of weeks, the wildflowers have been popping up all around my rural home in the mountains. They have offered a golden moment for me. See what they look like here.

Meadows have been covered with golden blooms, hillsides have been sprouting purple and yellow lupine. (The photo is of yellow lupine.)

All this gold in Mother Nature inspires me to think of golden opportunities. How often do we find those special moments, unique offers, or life-expanding opportunities? They may seem rare or few and far between.

In reality, they are present every month--even every week. But they might not be visible if we're not focused on looking for them. I know I've had periods in my life of diversion by worry or set-backs. A negative focus can push all positive (read "golden") opportunities so far into the background that they're almost invisible. You'd need a telescope to see them.

But really, these golden opportunities are just patiently waiting for us to notice them. They're quietly parked in the background, perhaps shining a little in the darkness. We only see the stars at night, when the competition of sunlight is removed, even though the stars are always present in the sky. We only see golden opportunities when there is less distraction in our mind, yet they too are always present.

What does all this have to do with building financial security--the goal of The Silver Purse? Lots.

There are 3 key actions that can lead to more prosperity and abundance in your life. These actions also lead to more personal fulfillment and the ability to help others more deeply. To do them, we must find golden opportunities regularly.

Earn enough to feel your services are valued. Earn enough to save something for your future self and loved ones.
Consider starting a business. Entrepreneurs with insight and patience can build wealth that benefits their families for a generation or more. Women are starting businesses at a greater rate than ever before.
Invest. How do the most successful people grow their money? If it's not a business, it's through investing. Often it's both.

Golden opportunities to do the above things start with mindfullness. They present when we are open-hearted and feeling grateful. They offer themselves up when we give ourselves a rest from daily distractions and look at the big picture.

Opportunities are more recognizable when we've set personal goals, and preferably written them down. There is a power in the written word. It's an affirmation of what we desire from life. It also imprints upon our mind, which then looks for ways to make those goals a reality.

Your golden opportunity may come through attending that networking event, exploring a topic you've always thought would make a good business, or finally opening up that first IRA account. It might be giving yourself a "Me Day" where you focus on goals and your future and daydream a bit. It might be as simple as stopping for 10 minutes to admire the sunset, allowing your mind to open to new possibilities.

Sometimes the most important things in our lives get pushed to the background, patiently waiting to be noticed and acknowledged. They may be the golden opportunities we've been looking for. Watch for them, then go and get immersed in them, like I did with my flowers.

Want to tell me how you stay open to new opportunities?

The Charm Bracelet Style of Saving

2011-04-16T13:17:00.000-07:00

Charm bracelets can personalize jewelry in a fun way. When I was young, I loved looking at all the charms girlfriends would collect. They may have had charms that reflected hobbies, like tennis or knitting. Birthstones or tiny purses and symbols of things we loved (pets) were also popular. No two bracelets were alike. They often grew with a spontaneous purchase. "Ohh, gotta have that!"

But what do charm bracelets have to do with your savings or investments? Many people collect savings or investment accounts in the charm bracelet style. They may have read about a top-performing fund, and wanted in right away. Or perhaps a friend suggested a new "high-yield" account at a particular bank or broker. Accounts may be accumulated in a haphazard way with no overall plan.

Getting recommendations from friends can be a way to discover new opportunities. Or, it can be a crazy quilt way of portfolio building--not really meeting your long-term needs. You may end up with too many accounts of one type and not enough of another, which lowers diversity and can actually increase risk.

Overall, you'll benefit by having a basic plan. The plan should be based on YOUR goals and time frames, not just a whim of the moment. Don't get distracted by shiny-object places to put your money. For example, many people rushed to buy annuities, without understanding the rules and the penalties for early withdrawal.

Your future goals determine how much cash you should keep (more if you have big expenses coming up.) Your plans also determine how much you'll need for your future, such as retirement accounts. Use this page for retirement planning calculators.

You can make long term investing easier with Life-Style or Target-Date funds that select investments based on your age. The Silver Purse website offers a free Members Page that includes a report on the pros and cons of Target-Date funds. Sign up at the silver purse to see this report. (We always respect your privacy, and do not rent, sell or share your address.)

Charm bracelets can be adorable, but collect investment funds in a more planned way for the best success. Care to share your tips for choosing a savings or investing account?

Cathedrals and Your Future

2011-03-30T09:22:00.000-07:00

There is a $6.6 trillion shortfall between what Americans need to retire, and what they will have, according to a report cited by Charles Schwab. Ouch. This is likely to have big social repercussions, and may alter our society.

Is this future lowered standard of living preventable? Mostly it is, but it requires us to do something which doesn't always come naturally--plan ahead, sometimes far ahead.

Big vision projects take wide thinkers who can plan into the future. Consider the cathedrals of Europe. Many of them were constructed in the 12th century, and took over 100 years to build. The architect/designer who started the project likely only saw it half finished by the end of his life. Others carried the dream forward. The vision that planted the seed sprouted graceful tall cathedrals that inspired millions of people for centuries to come.

Saving for retirement is not nearly as challenging as building a Gothic cathedral from stone. It does take some vision and perseverance though. Here are three things you'll need to do.

1) Picture your future and how you will live.
2) Find out what you'll need for the lifestyle you choose.
3) Set up automatic savings to help meet your goals.

#1 is all about finding your motivation. When you can actually picture yourself as your older self, doing something you love, your future becomes more real. If there are hobbies you want to do, or a lifestyle you want to keep, envision that. The more tangible, detailed and real your future seems, the more motivated you will be to make small sacrifices today for a better future next year or next decade.

#2 is the technical side of things. It involves using some financial calculators and/or getting some help with financial planning. If you need $50,000 a year to live on now, and want to keep that same income level, adjusted for inflation, financial tools or financial planners can give you the answers for how much you'll need to save monthly.

#2 part can also involve choosing the best types of investments to meet your goals. Again, this can be technical, or just pick an age-appropriate Target-Date fund that diversifies automatically.

#3 is relatively simple, as it involves setting up savings and investment contributions. Here's where you take steps to fund your future. You previously discovered how much you'll need for your retirement. Now, you'll take that monthly savings target, and start contributing. If the monthly savings target is higher than you can afford, just do the best you can. Contributions you make now will have the opportunity to benefit from compounding growth over time. Compounding can turn even modest regular savings into fatter retirement accounts over a 20+ year period.

The architect of the 12th century may have gone to bed dreaming of sun shining through stained glass windows and choir song amplified by vaulted ceilings. Your dream will be different, but still lofty on a personal level. You'll need to think 10, 20, even 40 years into your future. You're planning income support for the 20-30 year period of your life we call retirement, when no income comes in from employment.

Think big, find your inspiration--then plan to succeed. Your future self will thank you.

What's your biggest challenge when you plan for your financial future?

Financial Preparedness

2011-03-13T16:53:00.000-07:00

The recent devastation in Japan has reminded me how important it is to have some degree of financial preparedness as well as physical preparedness for emergencies. Seeing the images of men, women and children struggling to survive, find food and water and get to safety is heart-tugging. It could have happened here in the United States, and it would have been us in that picture of survival mode.

How can we prepare for the unknown? There are things you can do financially that could make an emergency easier and less devastating.

Have an emergency fund in a bank account. I like to call this a Comfort-cash fund. It should have enough money in it to cover you if your job or income stops for a short time, or there are medical emergencies which you need to pay. It could also give you the means to travel if you need to evacuate your home, or find family members.
Stash some cash. It’s a good idea to keep some cash at your residence. If banks and ATMs are shut down in your neighborhood, you may not be able to reach the money in your bank for a few days. I like to keep a couple of hundred dollars at home available for emergencies.
Insure things you cannot afford to lose. For many people, this means insuring high ticket items such as cars and houses, or a business. If you don’t own these, but have significant household furnishings, antiques, or jewelry, decide if you need insurance on those. In general, you’ll save money by just insuring against catastrophic losses, not smaller losses.
Insure your income, if you depend upon that for survival. This kind of insurance is called Disability Insurance, or Income Replacement insurance. I’m talking about long term disability here, not the short-term policies that cover people for 6-12 months, although that’s better than nothing. See if your employer provides any coverage first. Where do you get disability insurance? Larger employers may offer this (you pay of course), or life insurance agents sell independent policies. To learn more about disability insurance, see Insurance page on TheSilverPurse.com
Insure your life, if you have others that depend upon your income. Dependents could include children, a spouse or partner, parent, etc. See if your employer provides a small amount of life insurance, then factor that in before you buy any more. Be sure to let family members know where you keep any policies you own.

While none of us want to think the worst might happen, events around the world demonstrate life can be precarious . Preparedness can provide some peace of mind, and take care of those we love even if we can’t.

The last part of financial preparedness is to help those in need with donations of money or supplies, even if in a small way. The survivors of 9-11 and Hurricane Katrina said how much it meant when neighbors and even strangers helped them recover. As Mahatma Gandhi reminds us, “All humanity is one undivided and indivisible family.” This is especially true in times of emergency.

Romance Your Money

2011-02-08T15:42:00.000-08:00

Personal finance advice often comes wrapped in red guilt. Managing money takes time and effort, so we often put it off.

What’s the payoff for giving your money some time, attention, and well…love? The payday comes when your money starts loving you back.

In honor of Valentine’s month, here are good reasons to “romance” your money, all beginning with “R.”

Respect it.

Support your hard-earned dollars with some TLC--tender loving care. When money is disorganized or ignored, it won’t do you much good. Boyfriends, girlfriends and spouses don’t thrive on disrespect or lack of attention. Neither does your money.

Are the dollars in your wallet crunched or disorganized? Spend a few seconds to flatten them and organize by denomination so you can find the one dollar bills when you buy your next coffee.

Are your bills sometimes paid late, or getting lost? Set up a system to collect them right after you pick up the mail. Better yet, pay recurring bills online or automatically. Reducing late fees can even earn you enough to indulge in a box of artisan chocolates or a movie date with a friend.

Do you have neglected bank or savings accounts in different places? Consider consolidating them into one account you can monitor more easily. Having one steady relationship is easier than juggling multiple dates.

Read the rest...

Time and Treasure

2011-01-23T10:57:00.000-08:00

What does Time have to do with your money?

First, it’s the driving force behind where you put that money. If you need it next week or next month, you’ll want to put it in a sort of parking garage with 24 hour security. That would be your checking account or a money market fund at your bank.

Where you put your money is related to when you need to use it. Learn this concept and you’ll be a smarter manager of your money. In this article, we’ll focus on 3 time periods for when you need to use that money, and where to put it.

Short-term: Today to 2 years
Middle-term: 2 to 10 years
Long-term: 10 to 40 years

Short-term: Today to 2 years

Very short term needs should stay in a checking or money market account.

Slightly longer term goals can be met with 6-12 month Certificates of Deposit (CDs), U.S. Treasury Bills (T-Bills) or money market accounts. This could include savings for a house or car down payment, a wedding, the start of graduate school, or preparing for a possible lay-off.

You can also use a money market mutual fund. These are the mutual funds’ equivalent of a short-term parking garage. While you won’t get 24 hour security since there is no FDIC insurance with mutual funds, you can get access to a family of other investments.

Stay focused on safety of principal with short-term savings.

Middle-term: 2 to 10 years

Where do you put any money you might need in 2-10 years? This gets a little trickier.

Once you have your short-term funds (today to 2 years away) safely parked, you can put mid-term money into a low-risk but higher growth category. Longer term CDs (up to 5 years) can lock in a little better interest rate than short-term CDs. If we’re in a rising interest rate environment though, you risk locking in a low rate.

Another option is to move some money to a mutual fund company for the diversity a “family” of funds provides. Within the mutual fund industry, companies like Vanguard, T.Rowe Price, and Fidelity offer many mutual fund choices. Here’s where you get to start testing your “water wings” if you’re a beginning investor.

Look for mutual funds that emphasize safety and have a short to medium term focus for that 2-10 year time period. Read the prospectus or summary of the mutual fund. Each fund will tell you who it’s for, what’s inside it, and how it has performed over various time periods.

For example, a short-term bond fund may tell you it emphasizes safety of principal and is appropriate for short-term investors. An income fund may tell you it includes 60% bonds, 35% stocks, 5% cash, and is aimed at those who need regular income. You get to choose your level of safety balanced with growth.

Long-term

Now, what do you do with money you won’t need for a long time, like 10-40 years? This is the category of money that really needs to emphasize growth for most people, as it’s often for retirement years. All of a sudden, you have many more choices.

You can go mutual fund shopping and pick a basket of various Index funds if you want to minimize costs.

One formula for choosing funds--take the number 110 and subtract your age from that. The number left over is the percentage you can invest in stocks, the rest in bonds. This formula assumes you have an average to above average risk tolerance.

For example, Jean, who is age 35, takes the number 110 minus (age) 35= 75. Jean plans to invest 75% of her long-term money into a broad-based stock fund, and 25% into a broad-based bond fund. As she gets older, she’ll need to change the balance to own fewer stock funds near retirement age.

Target Date mutual funds do this adjustment for you. Pick a fund with a maturity date near the date of your retirement. The fund managers change the investment mixture over time to a less aggressive mix as you age. Join The Silver Purse email list for a free special report on Target Date Funds.

Sketch a time line with estimates of when you’ll need your money. Then invest your “treasure” with confidence.

The Un-resolution

2011-01-04T10:57:00.000-08:00

January is the season for resolutions and hoped-for change. It's great to be motivated, and resolutions really can work. Even small, consistent changes can make a big difference over time.

But right about now, I'm tired of hearing about New Year's resolutions. So, I'm proposing the Un-resolution. What, you might ask, is THAT?

The Un-resolution is similar to a resolution, but it involves stopping doing something that doesn't serve you well. Discontinue a behavior that is not productive, banish a bad habit. Just stop doing something that you know is hurting you in some way, small or big.

Let's see how this could be applied to personal finances.

Do you pull out your credit card and use it frequently in the week? This may be a sign that your spending is unmonitored or even that you're living beyond your income.

The Un-resolution here would be to stop using credit cards--move to cash or debit cards only. Put the credit cards away for 30-60 days. "But my card pays me 1% on purchases." Have you considered that the small advantage may be outweighed by the desire to buy more, and the hazardous habit of using credit cards daily? Here's the "logic" the credit card companies are trying to sell you--"Spend more so you can save money." Huh??

Un-resolutions can be applied to many personal finance topics:

Stop paying bills through the mail if you get hit with late fees. Automate what you can.
Stop ignoring your employer's offer to get you onto the 401(k) plan. Sign up and claim the benefits.
Stop complaining about your high car/house/other insurance. Get several new quotes.
Stop wishing you knew more about how to manage your money. Read TheSilverPurse.com (you knew I was going to sneak that in) or subscribe to a good magazine like Kiplinger's Personal Finance.

Banish just one unproductive habit, and you could save quite a bit of money in 2011. OK, my Un-resolution is to stop paying too much on some insurance policies. New quotes, coming up.

What do you think of Un-resolutions? Care to share any more ways to undo bad habits?

Happy 2011 to you all!

Fun Gifts for $4 or Less

2010-12-11T12:14:00.000-08:00

Do you have a gift list that's bigger than your budget? Or maybe you just feel your priorities don't include adding more less-than-useful gifts to people's closets. Your reasons for needing or wanting a more frugal holiday season (or year ahead) may fly in the face of the constant hum of consumerism. Take heart, and don't be pushed to spend beyond your income.

The gifting ideas that follow include 4 gifts for under $4. They focus on fun and interaction, since the biggest gift we can give people is our time and attention. Here are 4 small ways to show people you care.

Collection of photos printed out--Services such as Snapfish.com or Shutterfly.com advertise photos for 9-15 cents apiece. Photos can be sent to your home, or picked up at participating merchants. If you print up photos of an event you shared with the giftee, you'll be reminding them of special moments. E-photos are good, but physical ones are ready for scrapbooks, albums, or frames. Got a special photo? Print it in a 5x7 size ready for framing.
Deck of cards--This can be good for young and old. I've noticed some fun card decks for children's games. My niece and nephew started with a simple "Go Fish" game then moved on to Hearts and Rummy. Or, give a fresh deck for an adult or grandparent. Add in a written offer to teach (or learn from) the giftee a new game. Again, the gift of your time and attention can be special and valued. You might find this is a gift that gives both directions!
Punch balls--These are those large, sturdy balloon-type balls with handles on them. They usually come in bright colors and 2 to a package. You can buy them in the party section of most supermarkets. I've had lots of fun with young relatives playing with these. Try indoor "keep it aloft" games with teams, balloon tag, or invent your own game. You can use markers to decorate the punch balls with faces, quotes, or names. These are real ice-breakers!
Food sharing experience--Who doesn't love an offer to go out for an ice cream cone, root beer float, or pretzel dipped in cheese sauce? These are what I call "fair foods"-- things one splurges on when going to a county fair. They carry the allure of seldom-indulged foods. Make it a snack and visit opportunity, with the emphasis on sharing an experience together. Or, gather some friends or children, and plan a cookie-baking or gingerbread house decorating party. You might find your "gift" idea is their favorite of the season.

Bonus idea--when I was growing up, my parents suggested "chore books" as gifts for us children to give the adults. I prefer to rename them as "gift coupons." Offer to wash a car, bathe a dog, or make a dinner entree. Your labor and time are the gift here. This is a very useful present that appeals to busy adults.

Americans have risen to the challenge of The New Economy--one where frugality is a virtue. People are reaching for a new way of living that moves beyond conspicuous consumption, and adds back more meaning. Use your own imagination and creativity to create fun and memorable gift ideas for the special people in your lives throughout the coming year. Don't forget to add the present of your own presence!

Do you have any more ideas to add to this list?

Personal Finance With a Twist

2010-11-20T16:02:00.000-08:00

The Silver Purse website has some interesting pages tucked away under the drop down menus. This week I'll feature a few. It's the start of the holiday season. While you're lounging, waiting at airports, or web-surfing, check these pages out.

Do you watch the Desperate Housewives reality show? If so, you'll want to drop by this page and see financial planner Laura S. Bykowsky's amusing article on The Desperate Finances of Desperate Housewives. She muses about how these women could have held on to some of their wealth when the recession and downturn hit. There are some good examples here of what NOT to do with your money.

Halloween has passed, but one regularly visited page is Scary Facts for women. There are 5 strange characters here that relate to 5 things women need to watch out for. Oh, and music sets the mood.

Can food help teach us how to grow savings? I created this page with lots of fun references to food or cooking, including 4 tried and true methods to help you increase your own savings.

Then swing on over to Small Change, where you get to open 7 coin purses that include mini personal finance tips.

I've always been a fan of the eccentric fairy tale, Alice in Wonderland, by Lewis Carroll. I thought the story had some relevance to modern day money habits. This was first published on DivineCaroline.com, a place for stories by women.

Black Friday is one of the biggest shopping days of the season. If shopping is calling you with "Yes, yes", but your wallet and budget are saying "No, no," read this page on Overshopping, by psychologist April Benson. She offers successful strategies for identifying and getting your real needs met without splurging on more "stuff."

There is lots more to see, but I'll stop here for now. If you visit any of the pages listed above, feel free to leave your comments after this post. What amuses or enlightens you the most?

I wish you all a week filled with gratitude for blessings realized and to come.

Four Financial Accounts Every Woman Should Have

2010-11-02T13:08:00.000-07:00

Money management can be easier when you have the financial bases covered. See if you've got the right types of accounts to help you with cash needs, emergencies, and your long-term retirement.

1. First, do you have a checking account and ATM card with your name on it? It doesn't matter if you share the account with a spouse or significant other. Just make sure your name is on the account, and that you have the ability to pay bills and withdraw money. Most of us take this checking privilege for granted, but it's the most basic money account we all need.

2. Second, do you have an emergency fund? I like to call it comfort-cash. This should equal whatever you might need to get through unexpected hardships that crop up, from job losses to car breakdowns.

When you're prepared with at least 3 or more months of living expenses, you're less likely to borrow from high-interest credit cards, or sell your retirement investments with penalties or losses.

Where should you keep a comfort-cash fund? Put it in a bank money market account or savings account, or in a money market mutual fund. Yes I know, these don't pay much, but the key here is liquidity. You need to be able to get to those funds quickly when you need them, without suffering any loss of principal.

3. Third, do you have a major credit card in your name only? It's OK to share one credit card account with a spouse, but every woman should also have a different account with just her name on it.

You want to make sure you're building your own financial identity, which tracks to your social security number, and that you are the only influence on that account. In case of a later divorce or loss of partner, you've got your own credit history and FICO score established.

If you don't qualify for a credit card with good terms yet, look into getting a secured credit card, backed by a savings account you set up when you apply. You prove you're responsible with paying off card debt, before moving to a standard, unsecured credit card.

4. Fourth, do you have a retirement savings account in your name? This might be the 401(k) or qualified employer plan at your workplace, or an Individual Retirement Account (IRA). Retirement accounts provide tax-deferred or tax-free savings, which grow faster without current taxation.

If you don't have an employer retirement plan, but you do have earned income, open your own IRA, either Roth or Traditional IRA. If you're not working, but your spouse is, consider a Spousal IRA. These help build retirement accounts for a spouse who has low earnings, or is helping raise the kids at home.

Don't make the mistake of assuming Social Security will cover all your needs. It wasn't meant to, and it won't. And while taxable savings are good, tax-advantaged retirement accounts are even better.

How did you do? Don't worry if you lack one or two of these categories. But make a priority of establishing what you still need. You'll be setting up your own safety net, helping insure access to cash, and building financial security by owning these four accounts.

Would You Choose Chocolate or Vanilla IRAs?

2010-10-19T13:54:00.000-07:00

Do you prefer chocolate or vanilla—or maybe a swirl of each? Let’s look at how that applies to Individual Retirement Accounts (IRAs).

First, if you’re not familiar with the way IRAs work, they’re like a gift bag into which you can place a wide variety of investments. Uncle Sam (the US government) says when, what, and how much you can put into and take out of this IRA gift bag. There are two main types of IRAs.

The chocolate version of IRA

I like to call Roth IRAs the chocolate flavor, for their superior tax advantages. Follow the Roth IRA rules, and you can enjoy freedom from any future taxes on your investment. That can help you build a sweet retirement account.

The benefits can be huge. If you know about the power of compounding, you'll discover that putting money into growth funds and giving it decades to grow can produce big rewards.

Roth IRAs won't give you a current year tax benefit, as they are made with after-tax dollars, but they're terrific for people with more than a decade to retirement. Also, you can pull out your contributions (not the earnings) without penalty if you really need to.

What are the Roth IRA rules to get tax-free earnings?

You have to have sufficient earned income to cover your contribution.
Your earned income must not exceed certain levels. For 2010, single or head of household taxpayers need to earn less than $105,000 of Adjusted Gross Income (AGI) to fully contribute. If you're married, filing a joint return (MFJ), your household income must be under $167,000 to fully contribute. There are phase-out limits a little higher for making a pro-rated Roth IRA.
To keep your Roth investment earnings tax-free, you'll need to hold them at least 5 years and until after age 59 and a half.

Here comes the vanilla version.

Traditional IRAs provide tax-deferred growth rather than tax-free growth. Traditional IRAs give you a current year tax deduction, as they're made with pre-tax dollars. This will lower your taxable income and reduce taxes for that year.

Only when you take the money out of the IRA investment will Uncle Sam come with his hand out for taxes. And please, wait until after age 59 and a half so you don't get hit with early withdrawal fees in addition to the taxes.

Anyone with earned income can make a non-deductible IRA. But it’s better to get the deductible IRA.

What are the Traditional IRA rules to get deductible and tax-deferred earnings?

You must have earned income to cover the amount of the contribution.
Your employer must not offer you a qualified retirement plan. Or, if you are offered one, your income has to fall below certain levels. For 2010, the limit is $56,000 of Adjusted Gross Income (AGI) for singles. You'll get partial deductibility up to $66,000. For married, filing jointly (MFJ), the AGI limit is $89,000, with partial deductibility up to $109,000.
Traditional IRAs come with the requirement to start taking distributions out by the time you reach age 70 and a half.

All IRAs

For both Roth and Traditional IRAs, you may contribute up to $5000 for the 2010 year, and an extra $1000 "catch-up" if you're over age 50. These totals are independent of any workplace contributions to a SIMPLE IRA or SEP IRA.

If you can't afford to contribute $5000, just put in what you can. Many fund companies will accept contributions of $100 per month if you make it automatic. Plus, auto pilot savings are often easier.

If you're not working but your spouse is, you can still contribute to any of these IRAs for which you qualify, through a Spousal IRA. They're a great way to boost family retirement savings.

You can have both chocolate and vanilla versions of IRAs, as long as you don’t exceed the dollar contribution amount each year. I recommend you go for the tax-free Roth if you qualify. You’ll be creating a tasty tax-free fund for yourself.

For the full requirements and rules about IRAs, check with your investment company or the IRSPublication 590.

Financial beliefs--let go the old, and grow the new

2010-10-03T21:41:00.000-07:00

Do you ever catch yourself thinking, “I CAN’T do that”? It might be asking for a raise, or figuring out which investment to choose for your 401(k), or making a plan to reduce debt.

If we pay attention to our thoughts, most of us will find them telling us things we cannot do. Our minds supply us with reasons why. It might sound something like this, “I can’t ask for a raise because the company can’t afford it”, or “I don’t invest because I worry about losing money”, or “I don’t earn enough to pay off these big debts.”

While the above statements might sound true, in many cases, these attitudes are actually limiting us. They may be preventing us from improving our situations. We may be “aiming too low”, and amplifying doubts or fears.

Why do our attitudes limit us? We all carry beliefs formed early in life. Whether they are healthy or dysfunctional, true or false, we tend to carry them around like a child carries around a favorite stuffed animal. Our beliefs are familiar, like a comfort blanket, so it’s understandable that we hang onto them.

What happens though, when those attitudes and beliefs produce discomfort or poor results? Uh-oh. We may have to let go of them, much as a child gives up carrying around her favorite toy. The inconvenience of carrying it around, and the growing maturity that lessens the need, eventually causes the child to leave the toy at home, tucked away on the bed. As adults, we may need to leave some old beliefs behind in order to make room for new, improved lives.

When it comes to money and finance, women haven’t had a generation of female role models yet to teach us how to make money, start businesses, and invest—the cornerstone activities that build financial security.

That’s changing gradually. A recent Time article shows how a small demographic (single, childless, young urban women) are actually out-earning men of their age. This group, even though young, is making ground-breaking progress in salary equality between genders.

How can we, as individual women, improve our own financial security? First, try to identify one or two money beliefs that may involve limitations. Here are some I’ve heard:

I can’t save because I don’t earn enough money.
I’m not involved in my investments because my husband/boyfriend is better at understanding it than I am.
My debts are so large that I’m not sure if I can pay them off.
I can’t earn more, because I don’t have _______ (fill in the blank).

Once you’ve identified money beliefs that might be holding you back, look at how they could be reworded to improve your situation.

Use your hidden advantage. Women tend to be creative, intuitive and collaborative. We like to connect with others, and we’re often very motivated to do things for our family and friends. Here are some ideas for rewording the limiting beliefs above. You may come up with even better ones.

Having trouble saving? Think of how you and your loved ones will benefit from the savings account you open this week and put money into every payday. Can you feel the sense of security when you have a comfort-cash fund set up?
Have you turned over long-term money matters to the man in your life? Get to know an older woman who’s suddenly single, or volunteer at a Senior Center. You might see how women suffer when they’re not prepared with the knowledge to take care of investments and other money matters.
Swamped by debts? Pick up Jean Chatzky’s book “Pay It Down” and read it. She’s like the best friend who motivates you to do what you really need to do, even though it may be hard.
Need a better paying job? Find a trusted friend with whom you can discuss financial and career goals. Look at career web sites like WomensMedia.com. Seek professional training to improve your job prospects.

One proverb says, “The thought is the seed of the action.” Once you think you can do something, chances are you will be able to do it. The limiting beliefs have now turned into a spacious sense of “anything is possible.”

Do you have a money belief you’ve examined, polished up, and made newer and better? Tell us about it.

Apple pie, ipods, and investing

2010-09-14T17:32:00.000-07:00

What does pie have to do with investments? As fall apples roll into the farmers’ markets and stores, my thoughts turn to all the great recipes for apple desserts, and all things apple.

Some of you love your apples in a different way—with an iPod, Mac laptop, or iPhone. Now, what if you had invested in a high growth company like Apple Inc. back when it first went public on December 12, 1980? OK, maybe you weren’t born yet, but just follow my train of thought for a minute.

Apple Inc (ticker symbol AAPL) started being offered for sale at $22.00 per share at its initial public offering (IPO) in 1980. If an apple pie costs about $6.00, that would have been the equivalent of about 4 pies. On September 10, 2010, it was selling for about $263.00 per share, or the equivalent of 44 apple pies. Wow. This would have turned a 100 share investment of $2200 into $26,300.

Did it follow an even growth line to get to that price that was almost 1200% higher? Not at all. In February 2009, AAPL was trading at $80.00 per share, or $183.00 lower than now. Not all companies grow at this rate. AAPL has a dedicated fan base to fuel its sales.

How is this discussion related to you? I wanted to point out the power of investing in companies that sell popular and useful products. If you’re in your 20’s, 30’s, or 40’s, most of your investment “pie” should be in growth stocks for retirement or long term needs.

On the other hand, it’s not wise to buy a hot growth stock like AAPL as your only holding, or just one of several. If something should render Steve Jobs or his team unable to keep good products rolling, the stock could tank.

If you’re under 45, you need the majority of your long term investments in growth stocks of various types. The safest way to get this is to diversify with broad no-load index funds such as Vanguard’s S&P 500 mutual fund, or Exchange Traded Funds (ETFs) like iShares Russell 3000. That way, you’re participating in the larger stock market with hundreds or thousands of companies. The above funds are just examples. There are many others that would be appropriate for long-term investing too.

Target Date funds are mutual funds that provide an asset allocation balance appropriate for your age. They include some bonds as well as growth stocks. Join The Silver Purse email list for a special report on Target Date funds and where to find them.

If you don’t need your money for at least 10 years, put it to work with the companies that sell good products or services we all use on a daily basis. Buying stock funds means you’re part owner of these companies and share in the growth. Buying bond funds means you’re lending to these companies, and get paid a small fee for the service. Know the difference, and use growth investments to your advantage.

And who knows? Over time, you may find yourself with an investment that gives you a tall stack of pies for profit too. Enjoy Fall’s bounty, and remember to save something for your future self!

Financial goals for the 20s, and 30s

2010-08-29T13:42:00.000-07:00

People often wonder how they compare with others their age. Are they on-track when it comes to money matters?

I found a great guide from Kiplinger.com Here, you'll find "10 commandments for your 20s and 30s." First, let's look at that important decade of the 20's. You may have gone to college, or are starting a career or family. What are some of the financial basics that need to be addressed?

The Kiplinger article includes much-mentioned topics like: live within your means, establish credit, and start saving early. Then, there are some surprises: marry wisely, cut the umbilical cord to parents, and have some fun. Here's the link to 10 Commandments for your 20's and Erin Burt's article on declaring financial independence from parents.

Moving on to the 30's, people can build on the foundations they made in their 20's. Do you still need to add more financial tools or skills? This is a good time to do it. When you get through the 30's with a growing understanding of how money can serve your life, you're doing well. In fact, you may be ahead of most people your age. Here's the link to 10 Commandments for your 30's.

For your 30's, you'll see suggestions like: pay off non-mortgage debt (student loans and credit cards), protect your assets, diversify your retirement investments, and continue to learn. If you need to protect assets, here's an article I wrote on The Silver Purse website about which insurance you really need--and what you can live without.

I've heard from a number of women in their 50's and 60's who worry they won't have much of a retirement when the time comes. They may not have known about investing or personal finance, or had life changes like divorce or health problems that stripped their savings away. Whatever the reason, they would all love the chance to start fresh financially, or turn back the clock to do it right.

If you're in your 20's or 30's, you've got that opportunity in your own hands right now. You're the lucky ones. Try to learn or do one new thing this week from the 10 Commandments for your decade. And, feel free to share your own idea for what your "decade" needs to do to move towards financial security.

Women's circles--where finance and support meet

2010-08-17T11:30:00.000-07:00

Financial discussions rarely happen between friends. We may discuss love lives or sensitive emotional feelings, but rarely money. Why is this a taboo in our society? What are our fears?

Do we fear loosing our feminine side if we become adept at money management or investing? Or maybe it's more a lack of interest in a subject that's male-dominated. Perhaps it's a fear of privacy, or being judged.

Whatever the reason, every woman has the right and responsibility to nurture her assets--financial assets included. More knowledge and involvement can lead to more success, and less poverty in later years.

Here's a newly emerging trend that can help--women's circles, or money clubs. We women like to learn things in groups, and in a supportive environment.

I first heard about this when I read a book called, The Smart Cookies Guide to Making More Money, with author Jennifer Barrett and 5 young Canadian women. The Canadian women formed a friendship group for the purpose of learning more about money topics, investing, and reducing debt. They ended up changing their lives for the better, and eventually were invited to Oprah's show.

Next, I found the non-profit Women's Institute for Financial Education (WIFE.org). They were organizing a campaign to build Money Clubs around the country. The goal-- one million women in Money Clubs to help women rise above the many financial challenges facing them. (They chose my website, TheSilverPurse, as a Cool New Friend in spring, 2010.)

These non-commercial Money Clubs are free, and can be done in the living rooms of you and your friends. Share food, stories, and support with women you choose. Learn how to identify websites and books that can help you grow in knowledge. Find people and resources in your community. Need a better bank or insurance agent? Ask the group. Not sure where to put your retirement funds? Get ideas from others, or leads to a trusted advisor.

There are many directions a Money Club or women's money circle can take. For more info, see www.moneyclubs.com And while you're there, be sure to see this inspirational little musical slide show.

The many forms of money

2010-08-03T21:21:00.000-07:00

I was walking beaches in Northern California last week while on vacation. Seeing shells on the beach reminded me that money hasn't always been paper and silver. It's taken many forms throughout history and in different regions of the world.

Early exchanges between humans involved bartering, the trading of one item for another. This could be difficult though, as it was rare that the items being traded between 2 parties were of the same acknowledged value. Money, or currency, was invented to provide a standard trading unit that would be agreed upon by all parties.

Early currency for the Native Americans involved strands of polished shells, among other items. I visited a natural history museum and saw these necklaces of shells, which were portable and compact enough to be carried or worn. Even today, many cultures wear their wealth in the form of gold bangles or rings, necklace piles of beads, or other decorative objects.

In early Europe, silver, gold and bronze were fashioned into coins. First, the coins were crudely shaped and non-uniform. Anyone could take metal and pound it into a coin. Later, the leaders of the realm took over currency production to insure standards and uniformity, and get their face onto the coin.

Gold, being the most valuable metal, was the one most counterfeiters tried to copy. A baser metal coin could be dipped in gold. This started the practice of biting a gold coin to insure its purity. Gold is a softer metal, so scratch marks could be made on a solid gold coin and not on a gold-coated coin.

Early U.S. money was based on the gold standard. At one time, all coins and paper bills were backed by gold in government vaults. Later, the amount of money being produced outstripped the supply of gold. Today, our currency is based partly on confidence and mutual agreement. A paper bill, even a $1,000 bill, has no real value. It's value lies in the fact that we all agree it holds a specific worth.

Moving into the 21st century, money has changed again, to more electronic mediums: plastic credit cards, ATM cards, and services like Paypal.

However, the ancient practice of barter still continues. From vacation home exchanges to swapping services or shirts, barter has a comfortable and tangible feel. If you're short of cash, take a look at what you own. It has value, and can be traded for other things of similar value.

Notice the rise in Internet sites that foster bartering. I've heard of gift cards that can be traded in, phone contracts that can be bought out, homes for sale or trade, and professional services for barter. I'd like to hear about any sites you've used.

Who knows, maybe our culture is moving back to ancient practices. Perhaps I should have picked up some of those pearly shells on the beach. They might be worth something one day.

Finding financial peace

2010-07-17T11:19:00.000-07:00

Is there stress in your life around money? Here are some of the more common situations that can cause stress:

Increasing amounts of debt
Not enough money to pay the bills
Wondering where all your money goes
Confusion about how financial systems work
Feeling out of control, or being "locked out" of financial decisions
Disorganization of financial accounts or papers

Most of us have one or more areas we need to work on. My personal goal for this year is to track expenses better, and organize my investment accounts so my spouse can understand them too.

To find financial peace, we first have to identify the problem, and be willing to work on it. Problems rarely just disappear without action. Sometimes, they grow bigger and more menacing if ignored. Working on them when they're small just makes more sense.

Let's look at some stress busters. If you have increasing amounts of debt, or can't pay all your bills, this is a red light warning. Look at ways to cut expenses, and/or bring in more income.

This might involve setting up a spending plan with a cash-flow software like Quicken 2010, or at Mint.com If you're wondering where all your money goes, you'll need to do this too. It might also require taking a hard look at where your money goes, and removing some large expense or several smaller expenses, or even selling assets.

Consolidating debts into a lower interest rate can help reduce the costs. But ultimately, you'll just need to stick with a good pay-down plan to remove that debt. Join The Silver Purse email list to see more advice on debt pay-down strategies.

If you find yourself with lots of questions, or are feeling out of control, the answer is-- learn more. Knowledge is power, and you might find it's easier than you think. Browse good websites, pick up a magazine like Kiplinger's Personal Finance, or read personal finance books.

Here's one I read recently, especially for women: The Smart Cookies Guide to Making More Dough, with Jennifer Barrett and 5 Smart Cookies women. It's breezy, yet informative, and deals with debt pay off, as well as ways to make money.

Are you "locked out" of financial decisions? If you're in a relationship where you don't control the finances, learn some more, then get involved. Each partner in a relationship should understand her/his basic finances, and have some control over how joint money is spent.

Lastly, if financial organization is your difficult area, pick one part at a time to tackle. It could be as simple as buying a filing box or filing cabinet and some hanging files and putting each account in a different file. I don't recommend keeping everything in electronic form. You should have each year's tax return and the year-end summaries for all investments in paper form too.

Financial peace grows with knowledge, organization, and success. What financial "stress busters" do you use?

Bite-sized personal finance tips

2010-07-06T15:25:00.000-07:00

Knowledge is power. It's also a way to save money. If you're serious about growing your investments or finding the best deals for the dollars you spend, check out Kiplinger's Personal Finance magazine. (And no, they're not paying me to tout it. I've been a subscriber for over 10 years.)

The August 2010 issue is loaded with good advice and well worth the price. I've been skimming this issue during my lunch time. Here are some of the things you'll find:
1. 64 unbeatable bargains on things from investing funds to travel and entertainment
2. A money and ethics column, "Should you wed for money rather than love?"
3. Grad degrees from a distance--top online degree programs
4. Your mind and your money--how we process large amounts of information
5. Make ETFs work for you--a section all about newly popular Exchange Traded Funds
6. Finance basics for partners--protect yourself and loved ones when there's no marriage contract.

The range of topics spans much that touches our spending, saving and living arrangements. At my website, TheSilverPurse.com, I encourage women to learn a little something new regularly to successfully manage their money.

Next time you're looking for some quick reads, try a relevant personal finance magazine as well as the usual fashion or celebrity mag. It's an easy way to grow your financial knowledge.

Are you sailing through life...or drifting?

2010-06-21T20:43:00.000-07:00

The recent drama of the 16 year old girl who was attempting to circle the globe in her small sailboat caught my attention. Was she extraordinarily brave, or not seasoned enough for the challenge? Most parents cringe when they think of their teen facing wide oceans and harsh elements alone. The fact remains that she sailed a good part of the way before a big storm stopped her.

She did it because she was trained, focused, and had set herself a specific goal. To me, that's a powerful act--to set a big goal and go after it.

Goals can come in many shapes and forms. Your goal might be to get a college degree, or save enough to buy a home, or pay off all your debts. Or maybe it's to hike from Mexico to Canada, or start a new business. Whatever it is, it will take planning and some focus.

A life, like a boat, needs steering if it's to reach its destination. Floating with the current may be great for lazy summer raft trips down a shady river. But drifting with the current tends to take you places you may not want to go--like getting beached on a rocky shore, or slipping into a current that leads to a waterfall drop off. The word "drifting" and "drifter" have connotations of aimlessness.

Drifting isn't all bad though. It can be comfortable and easy. We all do it, and parts of our lives need to be on "autopilot." It's usually the bigger, wider, and more rewarding goals that require conscious steering.

Summertime blooms with long hours of sunshine, vacations, and a lighter schedule for many of us. It could be a good time for reflection. Where are you going with your life? What do you dream of doing? Which direction will you steer?

When you have some answers to those questions, it's time for a plan. Reverse engineer it so you start taking some small steps to reach those bigger goals. Many goals require some financial resources too, so getting your money organized, and minding YOU, is important.

If you're feeling stuck in the doldrum currents, try these tips:
1) Dare to dream bigger and wider. Inspire yourself and find your passion.
2) Find a friend, mentor or role model who can help guide or cheer you on towards your goals.
3) Write it down, make a picture of it, and/or visualize what you want to happen. Your mind has to "see" it before it can believe it.
4) Expect waves and other challenges along the way. Most people who have found success have experienced difficulties first. The reason they succeeded--perseverance.

Check out our page on goal-setting. http://thesilverpurse.com/goals.html
Here's to a summer of dreams, plans, and....actions!

Websites, breadcrumbs, and dollar signs

2010-06-13T14:13:00.000-07:00

What do these items have in common? This week, we finally launched the redesign of The Silver Purse. Check it out here http://thesilverpurse.com/index.html

It's still a free, informational site for women to learn how to build financial security. What's new is a fresh look, better navigation (you can find the 35+ pages of content), and the debut of The Silver Purse Club. (It's a free way to access some of our special features.) You can also go straight to the Twitter and Facebook pages now, and join.

Getting to this point has been a journey. I've learned about everything from CSS (cascading style sheets), to favicons (the little picture icon in the address bar), and breadcrumbs (trails that show a reader how they got somewhere). Like sausage-making, you don't really want to know how it all gets made. You just want to enjoy the end product. We'll keep improving it to fit your needs, and our vision.

Now,where do the dollar signs come in? I've noticed a growing number of international visitors to The Silver Purse. Since the content is geared to women in the United States, (due to tax laws, IRAs etc.), we wanted a way to let visitors in other countries recognize this instantly. So, on the home page, you'll see a silver gift bag with a dollar sign, surrounded by good ole U.S. greenbacks.

What can you look forward to? New content will be posted soon from CFPs Laura Scharr Bykowsky and Karen Lee. Plus, enjoy a visit to Alice's Wonderland for some fun financial lessons, also coming soon. As always, I like to hear your questions and comments at this page http://thesilverpurse.com/contact-us.html See you around!

Robin

Putting lazy money to work

2010-05-29T22:18:00.000-07:00

Do you have money parked in Money Market funds? That can be a good thing if you need funds for an emergency or unexpected expense--I like to call it "comfort-cash." It's there for short-term needs and security. You'll also need short-term places to park funds that are destined for purchases, such as a down payment on a home or car.

But what if the rest of your savings is also parked in a savings account, Money Market fund, or other low-yielding place? That's lazy money. It's time to put it to work.

Think of yourself as the boss/employer for your financial assets. Do you really want your funds idling around and not working? If so, your "business" will not grow or thrive, and your retirement goals may not get met.

In this low-interest environment, it's crucial that you put long-term savings to work. But where, you ask, is a safe place to invest?

When you have 10 or more years until you need your funds, you have time to ride some of the ups and downs of the stock market. You can buy stocks through no-load mutual funds or exchange traded funds. Look at some of the mutual fund families like Vanguard.com, Fidelity.com, or T.Rowe Price.com. On average, you'll still earn about 8% per year over the long term. Contrast that with 1%-2% in cash-type accounts.

Visit TheSilverPurse.com and join our free email list to get more ideas to grow your savings. Find out what's the investment equivalent of the basic black dress to shop for first.

Discover where all your money is hiding. Then, get the funds designated for future growth away from gossiping at the water cooler. Put 'em to work!

Of birds and money styles

2010-05-12T22:16:00.000-07:00

Women all have a money personality, or common way we deal with our finances. These different styles can be thought of as types of birds.

The saver—The owl observes life keenly and loves being prepared by stashing things in a hole of the tree. The owl may be preoccupied with planning for the future.

The spender—The splendid peacock enjoys feathering her body with attractive clothes and her nest with things she likes. Peacocks focus on the pleasures and needs of today.

The avoider—The sparrow is industrious, but leaves all financial decisions to others, just blending in to get along. She’s hoping someone else will take care of her.

Now, many of us share some of these characteristics. But we’re usually more closely related to one type. You probably already know which flock is yours. Knowing your current money personality is the first step towards finding a healthy balance.

If you’re an owl, you like to save and think of the future. You’re good at planning for retirement and other long-term needs. Owls can be single-minded, focused on goals, and successful. But guard against getting too hawkish in your pursuit of those goals. Be sure to slow down, share a little of your bounty with others, and enjoy the present. That will make you a wiser owl.

The splendid peacock enjoys using all her income and resources for things that bring her and others enjoyment. She’s a master at bird parties, the long-feathered outfit, and spreading her generosity around.

So, what’s the problem? The peacock may end up old and featherless through lack of planning. That’s a step into the proverbial “doo-doo”. If you’re a peacock, take a tip from the owl and find a place to stash some current savings away regularly. Try to imagine what your “future self” will need to continue a graceful lifestyle. The needs of the future call for some of your attention. Since you’re a style setter, other birds may follow your lead.

The avoider sparrow can be hard working and industrious. She likes to focus on nest building and connections with others in her flock.

If you’re a sparrow, stepping out of your basic role can make you one scared bird. The sparrow wishes others, particularly the male sparrow, would handle all the things she doesn’t understand or want to learn.

The sparrow needs to practice taking responsibility for her own finances. She has more courage than she takes credit for. After all, she’s the one who selects the nest location and rounds up the flock. Some of those same good instinct skills can be applied to preparing for her financial future. The sparrow knows how to find resources, so she may choose to seek financial guidance. Just keep a bird’s eye view on things in your best interest.

For chicks of all ages
We can’t totally change our money personalities, but we can modify them when needed. Know your strengths, but be open to learning things that can enhance your financial life.

There’s an old fairy tale about how the first birds got their colors. They started out being gray-feathered, but one day a rainbow appeared in the sky. The most adventurous birds soared up into this strange colorful air. As they came out the other side, they picked up colors of the rainbow, and delighted in their new plumage.

Women as a group need to step into the rainbow of financial knowledge. A little education can help us avoid poverty, build security, and delight in financial freedom.

Not your mother's jeans

2010-04-29T21:51:00.000-07:00

When your mother was young, she may have had few choices when it came to jeans. She probably had to shop in the men's department, where the choices were limited to dark blue and...more dark blue. No ripped and faded masterpieces or bling-decorated jeans were available. I remember craving some style and color, and embroidering designs on my pockets.

Things were better when it came to retirement planning though. Your mother could count on Social Security and maybe a pension from her employer. Most guaranteed benefit pensions have been phased out now for younger workers, and Social Security may have to limit future payments. The motto now is "What you save is what you get." WYSIWYG

What's a person to do so they can provide for their future self? It's all about planning and regular contributions now. Start early to save every month. The time value of money means you'll get much further along when you start early. See this page on "compounding", that shows how $30,000 can turn into $300,000 with very little work on your part.

If you wait years before starting to put long-term savings aside, you don't get the free ride compounding provides. We're all in favor of doing things the cheap and easy way. By saving early, you don't need to save as much as people who start later.

Providing for your retirement may not be as easy as for your mother, but at least you can enjoy the rainbow of designer jeans she didn't have. Just make sure you think of what your "future self" will need someday, and plan for her too.

Find the wealth in your life

2010-04-15T11:24:00.000-07:00

Ahh, springtime is here. In the mountains where I live that means wildflowers, and today I saw carpets of them. Some meadows are blanketed with tiny gold flowers, appearing like fields of gold.

Now, the color gold reminds many people of the precious metal, wealth, and abundance. That sunshiney color may strike our brains as a life-promoting force.

When most people think of wealth, they focus on the wealth of others, assuming they will never have it for themselves. They may have been raised with that expectation, seen it in their parents, or just figured it's not an important goal. Usually, what we expect is what we get.

What would happen if we focused on the wealth in each of our own lives instead? Since all conscious actions start with a thought, could the recognition and acknowledgement of abundance bring more abundance? There is evidence life works that way.

The Hawaiian islands have a tradition of "huna"--to bless or respond to that which is good in life. What's good in your life? Where is your own abundance? Is is good health, supportive friends and family, or an income that supports your needs? Identify as much as you can of your own abundance, and give it acknowledgement and blessings throughout your day. Try this for a week and see what happens.

Those fields of gold have inspired me to focus more on abundance and less on what's missing or lacking. On the journey to financial independence, we may need to raise our sights, expect more from life, and find the wealth we already have before we can build more.

Four accounts all women should have

2010-04-04T20:58:00.000-07:00

There are a few financial basics that can make life easier. See if you're covered with the right types of accounts.

1)First, do you have a checking account with your name on it? It doesn't matter if you share the account with a spouse or significant other. Just make sure your name is printed on the checks and that you have the ability to sign checks, pay bills and withdraw money if needed. Most of us take this "checking privilege" for granted, but it's the most basic money account we all need and don't all have.

2)Second, do you have an emergency fund? We like to call it "comfort-cash." This should equal what you'd need to help you get through unexpected hardships. And again, make sure your name is on the accounts so you can withdraw money if needed. Most financial planners recommend having at least 3 months' worth of living expense needs in this account.

Where should you keep it? Put it in a bank money market account or high yield savings account, or in a money market mutual fund. Yea, we know, they're hardly paying anything. I saw one last week that was paying 0.01%. But the key here is "liquidity." You need to be able to get to those funds quickly when you need them, without suffering a loss.

3)Third, do you have a credit card in your name only? It's fine to share one credit card account with a spouse, but every woman should also have a different account in her individual name.

Why? Credit reports and FICO scores follow a single social security number. You want to make sure you've established your own financial identity, and that you are the only influence on that account. Then, make sure those bills always get paid on time and meet at least the minimum payment. Preferably, you pay your balance off each month.

The goal is to build a strong credit identity so if you need to borrow in the future, you can. A good credit identity can also help when renting an apartment, looking for work, buying a car, borrowing for college, and many other areas of life.

4)Every woman should have a retirement savings account in her name. This might be the 401(k)or qualified employer plan at your workplace, or an Individual Retirement Account (IRA). If you don't have an employer plan, open your own IRA and contribute regularly. See this page for more on IRAs, http://thesilverpurse.com/retirement.html

Don't make the mistake of assuming Social Security will cover all your needs. It wasn't meant to, and it won't. Especially if you're under age 45, you should plan on funding much of your retirement income needs. The good news is that starting early really helps.

That's it for the 4 accounts we want every woman to have. Are you missing one or two of them? Just focus on setting up one at a time, maybe giving yourself the goal of one every couple of weeks.

If it requires saving money to fund the account (like an IRA or a comfort-cash fund) start soon and keep making whatever contributions you can afford. Pay yourself first and you'll find saving becomes a habit. Before long, you'll be on your way to more financial security.

Your tool box and you

2010-03-17T21:03:00.000-07:00

What, you don't think you have a tool box? If you use money, you've got tools. Money, whether it's in plastic, electronic, or cash form, is nothing more than a tool to exchange for the things we need and want.

Why then does it generate so much worry for some people? And why is the management of it something many women fear, avoid, or ignore? This post certainly can't answer these age old questions, but we can explore the topic of behavioral finance a bit.

Money has traditionally been managed by men in a patriarchal society like the United States. It wasn't until the early 20th century that women started gaining rights to vote and manage their own savings. Somehow, many women in relationships still go along with the previous century's idea that the man should manage the long-term finances.

Sadly, this can lead to a bad case of financial illiteracy. Women often outlive their spouses, and if they do, they can be woefully unprepared when on their own. I hear tales of worry, fear and desperation when an untrained spouse suddenly gets thrust into the role of decision making on financial matters. It doesn't need to be that way.

This is Financial Literacy Month. Guide a friend or relative to start taking small steps to know how to use the tools in her tool box. Remind a friend to set up an IRA account, ask an older relative if they need help balancing a check book or looking for a Long Term Care plan. Subscribe to a financial magazine like Kiplinger's Personal Finance and pass it on after you've read it. Let's make this the new decade where more women step out and use one of the biggest power tools around--their money.

Venture here at your peril

2010-03-08T17:17:00.000-08:00

Are you an adventurous type? Do you like to vary your daily routines, try new foods and activities, and meet new people? Many of us do, to some degree. If you're really adventurous, you may be drawn towards activities and ventures that test your abilities (both physical and mental) on a regular basis.

Most adventurer types thrive on this lifestyle, and are envied for their lively ideas and courage. But what happens when the activity needed is investing money? Slow down now, this is about your future. Adventure and investing are not always good bunk mates. Throwing your money at risky ventures is a little like skydiving without checking for a parachute--or walking into a pirate's den.

We've heard of women who have small amounts to invest and are buying stock in start-up companies, penny stocks or worse. They may be talked into pyramid investing schemes, where they're promised outsized returns if they put in monthly cash. In short, odds are they will end up losing a good part of what they put in to these risky ventures. What they lacked was a cohesive plan that built a balance of short-term, medium and long-term investments that fit their goals.

The smart adventurer will learn her strengths and when she needs to delegate. If steady and appropriate investing is not your "cup of tea", find a financial planner or investment advisor to guide you into things that will grow and also provide some security.

Zone your adventure to give you the daily and weekly excitement you need to stay stimulated. But turn over the investing to someone who can help you make a plan that supports your current and future life. After all, you'll need that money later to take the flying lessons, the European trek, or open that little business you've always dreamed of.

Aim for the mountains

2010-02-15T11:48:00.000-08:00

I took a bike ride today, and my eyes were drawn to the mountain peaks. The recent rains and snows have turned the tall, 10,000-foot-high peaks into dramatic snowy wonders. Their sheer height is inspirational. Their mass dominates the skyline.

Mountains make me think of climbing towards goals. But how many of us set ourselves mountain-sized goals? Do we compromise by aiming for the foothills?

In a few weeks, the hikers of the Pacific Crest Trail (PCT) will begin padding through my neighborhood, on their way from the Mexican border to as far north as they can reach in the time they have on the trails. They will climb mountains, walk through deserts, cross rivers and streams and valleys. In the process they will forge new friendships, test their endurance, and bond with the wilderness. They are the ones who set giant goals and reach them, one step by one step.

The same thing can be done when planning for financial security. If you run the numbers you'll need for retirement on a calculator, you may be faced with Everest-sized figures north of a million dollars. Is it within the realm of possibility?

Most of the time it is. The key is to start as early as possible. Just as the PCT hikers have done, you'll need to plan well and continue with your forward steps.

Join a community of women at TheSilverPurse.com to learn more about the steps to your own personal mountain-sized goals. Remember, all big goals take time and perseverance and a support system. But when you reach those big goals, the view is worth it!

Goals are motivators

2010-02-04T17:25:00.000-08:00

Austerity is never fun. I've read countless articles about ways to save money by spending less. Somehow, it's hard to get inspired. While all these articles and blogs have some validity, I wonder if the missing element is that the goal of "saving money" is so vague.

Maybe making it more specific can grab my attention better. What am I saving money for? Ah ha--now that's more interesting. How about that dream of a comfortable retirement later with the chance to travel a bit? Or, closer in time, I can envision a vacation on a craggy coast where I see whales spouting through the glinting ocean waves.

Your dreams may include something entirely different. Perhaps you want to start your own cafe, stay home to nurture a toddler, or buy a newer car. Whatever it is, define it, picture it, and use it as your motivator to save.

Keep yourself focused by writing those goals down, and maybe finding a photo or picture that reminds you daily WHY you choose to make small sacrifices. Most of us are more willing to make the necessary trade-offs when we're reminded of our goals.

You've probably heard the oft-quoted advice to focus on paying your needs first before your wants. This makes sense because income is limited and choices have to be made for our spending. Ultimately though, many of us would prefer to flip that advice on its head. We want to spend less on our needs so we can spend more on our wants and things that really matter to us.

Some people have already intuitively done this. They scale back their living expenses in order to live the life they've always dreamed of. I read of one couple who saved diligently for five years and rented their home out, then bought a boat and spent the next year sailing wherever they wanted. Extraordinary and memorable? Absolutely. Did it require sacrifices? Of course.

Find your own motivators, and generate your own excitement. Think outside the box about how to spend less on your needs so you can afford more for your wants later. Pass your success stories on. Someone else may need your inspiration on their own journey to fulfillment.

Say hello to your future self

2010-01-23T13:38:00.000-08:00

How many of us think about what life will be like when we're 10 years older? How will we be living even further out into the future when we're retired?

If you're not actively saving money for your later years, it's time to start. Your future self is calling and it's saying life will be easier if you put something aside today/this week/this month.

Women in particular seem to put off investing for their future. They tend to put the needs of others before their own. While that may sound noble, does any woman really want to be in a position of financial dependence on grown children, welfare programs or other public charity?

Even happily married women should have their own retirement plans, as many outlive spouses and the savings the couple may have put aside.

The time value of money, also called compounding, is a powerful force that can grow your savings and investments if you give your money TIME. Start in your 20s to save regularly in an employer retirement plan or an IRA. If you contribute for only 10 years, you'll have more at age 65 than someone who started saving in their 30s and saved for 20 years (twice as long).

The bottom line, it costs you much less to fund your retirement if you start early. Even if you're a late starter, doing something is much better than doing nothing.

Many women will have decades in retirement without employment income. Even if you're in your 50s, investing regularly and letting it grow/bake/mature for 20 years can work magic.

So, be kind to your future self. Stick at least 10% of any income into investments chosen for growth potential over the decades. You'll thank yourself later.

Are you financially literate? Take this quiz.

2010-01-02T10:06:00.000-08:00

New Year's resolutions are efforts to improve one's life. What are yours for this year? The new year is a blank slate to write on as you choose. A worthy resolution is to gain some financial literacy and the security that follows. We'll run through a few questions so you can assess your current financial literacy.

It's not just what you know, but what actions you've taken that will affect your success. The quiz is designed for people of employment age. (After retirement age is a different set of issues.) You're aiming for 12 points to score 100%, but start where you are and build upon what you know now.

Life runs smoother and with less stress when you know you have the money to pay the rent or mortgage next month plus something for hardship times. If you have a comfort-cash fund (also called emergency fund) in a separate cash-type account , give yourself 1 point for planning ahead! If you have a comfort-cash fund that covers at least 3 months of living expenses, add 1 more point. Don't have one? Save the funds and put them into your bank's money market account or a high-yield savings account. You'll worry less--we promise.

The next question in the financial literacy quiz relates to your retirement plan with an employer. If you have an employer who offers a qualified retirement plan, are you contributing enough to at least get the match your employer offers? If your employer doesn't match, are you contributing at least 4% of your gross wages? If so, give yourself 1 point.

Do you have a personal Individual Retirement Account (IRA)? Add 1 point.

Are you contributing to your IRA every year? This is also worth 1 point.

Are you contributing 10% or more of gross wages to all retirement savings plans combined--your IRA, employer retirement plan, or other qualified plan? Add 1 point. Ten percent is a general rule of thumb to get you to retirement with adequate funds. If you started saving late, or need to play catch-up due to investment losses or low retirement balances, you may need to increase savings to 15-25%.

If you have credit cards, do you pay the balance off in full most every month? This is worth 1 point. With credit card interest rates spiking into the 20% plus range, this is a dangerous and expensive type of debt to carry. Pay it off so it doesn't bite you.

Are you debt-free or have a solid plan to be so within the next 12 months? This is worth 2 points.

Do you have insurance to cover losses that might really hurt? Car and home insurance is a necessity if you own those items. Everyone needs basic health insurance. Life insurance is important if others rely on your income. Disabilty insurance is helpful if you don't have savings to tide you over a significant period away from work. If you have the insurance you need, add 1 point.

Do you have a will or a trust? If you have assets over $20,000 you should have at least a basic will. Otherwise your state will dictate who gets your "stuff". Most of us would rather make that call ourselves. Add 1 point if you have a will or trust.

Do you learn something new about personal finance regularly? Read articles online at The Silver Purse.com, Bankrate.com, Kiplinger.com, Motley Fool.com, Yahoo Finance and the websites of your investment company or bank. Subscribe to magazines like Kiplinger's Personal Finance or Money magazine. Take at least 4 periods of browsing or reading every month to boost your knowledge and confidence. This will give you the know-how to invest to reach your goals, and reduce financial risks in your life. If you do this, add 1 point.

You're done! See where you fall on the spectrum of 12 points. Most people won't get a perfect 12 points since many carry legitimate debt like mortgages or student loans. But get as close as you can to 10 points for an excellent score. Now, how about those resolutions? Take this quiz again next year and see how far you've come.

Balancing the future with the present

2009-12-14T21:30:00.000-08:00

The new year is almost here. It's a time to reflect on where we're going and where we've come from. A fresh, blank calendar will soon stare at us from the wall. What will we change?

For one thing, many of us need to think of balancing future needs with the needs of the present. In our financial lives, this means taking some of what we earn today and putting it aside for the proverbial tomorrow. Specifically, most people should be saving 10% of their take home income to provide for their future needs. If your biweekly paycheck is $1200, try to save $120 each pay period. If you have an employer retirement plan such as a 401(k), you can count that towards your 10% savings.

The easiest and least painful way to do savings is by automatic withdrawal. Banks, credit unions, and investment companies can help you set up a periodic transfer from your checking account into a money market account or high-yield savings account, or even an IRA (Individual Retirement Account) or other investment. Your paycheck may already have automatic withdrawals for an employer retirement plan such as 401(k) or SIMPLE IRA.

IRAs are a great place to save for the future and retirement. 2010 offers a new year to do that. I generally fund my IRA in 2 or 3 larger amounts for the year, but I like the idea of funding an IRA in small, regular increments. Some investment companies will allow you to invest amounts like $50-100 per month once your account is opened. Look at TRowe Price for a no-load mutual fund company that gets you into retirement investing with fairly low minimums if you invest with automatic deposits. Vanguard and Fidelity are other investment companies that offer a big variety of no-load mutual funds-- a good place to start investing. See these no-load fund companies with lots of offerings.

The beauty of small regular deposits is that you participate in something called "Dollar Cost Averaging". You'll be buying shares of an investment at various prices, so you're guaranteed it's not all bought at the highest price for the year. Also, if you invest a fixed amount--say $100 per month--over time you'll buy fewer shares when the price is higher, and more shares when the price is lower. Your $100 will buy 10 shares of a mutual fund priced at $10 per share. When the mutual fund drops to $8 per share, you'll be buying 12.5 shares, so you're acquiring more shares when the price goes down. Smart move!

Dollar cost averaging is only one benefit of investing small amounts regularly. Another is that people are more likely to stay with their investing plan if it means small automatic deductions, rather than coming up with $1000 or more periodically. Let that fresh calendar full of scenic pictures remind you that your future will be more picturesque if you save regularly. Start planning now. Visit TheSilverPurse.com for more on how women can build financial security.

Fabulous freebies to stretch your dollar

2009-12-05T12:02:00.000-08:00

The holidays mean extra spending for most of us. There are gifts to buy, extra food for parties or sharing, crafts to put together, and that Christmas tree to pick up. It can be a stressful time for those on limited budgets. I won't remind you the Grinch lurks around the corner for anyone who "pays" for the holidays with credit cards. We'll focus instead on ways to find free products and services now and in the new year.

Here's a great link from Kiplinger.com, with their third annual Fabulous Freebies, http://www.kiplinger.com/features/archives/2009/08/freelist_2009.html Click on the slideshow option in the article to see 30 categories, from free video games, vacation perks, shipping, dining and services. There's something for everyone, and no junk here. I was interested to see the free financial planning tool at Voyant.

Are you one who snaps up free samples or uses coupons? You'll love this site, http://www.yesall4free.com/ Apply for lots of free stuff, including food samples, beauty products, pet supplies, baby items and more. Another good website is The Dollar Stretcher, http://www.stretcher.com/ We can't guarantee you won't end up on mailing lists somewhere, but that's often a trade off when you get free stuff.

Don't ignore the freebies in your own neighborhood. Post a need (or a give-away) on a community bulletin board or Craig's List and see what happens. People like to help others. You may find free mulch with a neighbor's wood chippings, you-haul-it furniture from someone who's moving, or free pets.

In the true holiday spirit, gifts can also be crafted, handmade or gifts of time and effort. Your parent may prefer a card promising a special home-cooked meal, rather than another "thing" to store. Your spouse may appreciate starting the new year with a shiny, clean car that you've washed and vacuumed.

For an inexpensive gift, buy a small flash drive for under $20 and load it with family photos, or put together an album of photos. When you start thinking of alternative ideas, you may come up with gifts that are actually more meaningful. Here's wishing you a fun holiday with no post-holiday credit card blues!

Couples--Shared or separate finances?

2009-11-28T20:55:00.000-08:00

How do most couples own their financial accounts? In the past, married couples almost always shared checking accounts, savings accounts and investments. Today, that pattern is a little different.

Factors that influence this are higher divorce rates, more women earning larger paychecks, retirement account ownership, and a desire for independence and autonomy. It's not unusual to see a variety of practices. "His, mine and ours" is one style. Each spouse/partner has an individual account, but they share a main joint account for household and family expenses.

Variations on this theme include paying proportionate amounts depending on what each person earns or some other criteria. If he earns 60% of the income, he pays 60% of the bills. This feels more like being a roommate rather than a married couple, to me. If each partner is expected to always pay part of the household expenses, what happens when kids are born? Mom may be working 12 hour days taking care of their new baby, but bringing in no income.

Other couples feel it's important to keep most finances shared, and discuss important decisions so each knows what's going on. This is the method my husband and I have used and it's served us well in 30 years of marriage. We don't always agree on how to spend or invest our money, but we talk about it until we come to a shared resolution.

Whatever style you use, it's good practice for each person to have their own credit card so they have a credit history. Also, certain things are always individually owned, such as an IRA, 401(k) or other retirement plan. Gifts and inheritances are also separate property unless voluntarily shared.

Whatever works best for you is the practice to use. But if tensions arise over sharing vs. separate finances, it's good to explore your options. Marriage is based on trust and mutual respect for the partner's opinions. Money can be a common source of conflict, so it's important to build trust, communication and respect into use and discussions of money.

If one person controls the purse strings entirely, tensions often develop. Instead of the marriage being a partnership, it can feel more like a parent/child relationship when one spouse assumes the mantle of decision making and doesn't involve the other. This can be part of the drawback of finances that are mostly shared.

Generally, when one person controls things, it's the man. Women need to learn enough about basic personal finance so they can be part of the conversations and decisions. Don't wait for an invitation. Be proactive and take several short periods of time a month to learn something new. It's your money too. You can start with some favorite links on this page of TheSilverPurse http://thesilverpurse.com/links5.html Statistics show most women will live on their own at some point in their lives. Know the basics of personal finance and be a part of family money management.

Living on a budget can be tricky, as it only takes one person to sabotage the budget. Many healthy marriages allow for small amounts of personal money to be spent without having to account for it to the other. Perhaps he wants a sports magazine subscription, or she wants to take a yoga class. Even if the budget is tight, a little discretionary spending makes people feel they have some independence.

The bottom line is, set your financial goals together, then use the combined experience and wisdom of each spouse/partner to forge a true partnership that will last.

Hiding from your money?

2009-11-15T22:07:00.000-08:00

Really paying attention to a person or a subject means focusing, listening and watching. In these busy times, attention is often divided by two or more pursuits happening at the same time.

Even if only one thing is happening, our minds may be jumping ahead to what comes next, or reviewing what already passed.

Paying attention takes time and focus. If something seems like it will take too much time, we often put it off indefinitely.

This is especially true when the focus also requires learning something new or doing a little research. Retirement planning, or investing for the future is one of those projects that often gets pushed to the background repeatedly. Yet it's also one of the more important projects for our future well-being.

Ignoring our future financial stability is like hiding from our money. When there's no attention directed to it, nothing happens. Zip actions equate to zero dollars.

The future will come, whether we prepare for it or not. Make a conscious choice to do a little preparation for that future.

Here's an easy idea-- set aside at least 15 minutes at a time, 4 times a month, to read, learn or do something to grow your savings or increase your knowledge of personal finance. Surf some of the financial websites, starting with http://thesilverpurse.com/. If you go to the "links" page, you'll find our other favorite money sites.

Take "4 for your future" regularly, and we promise you'll gain more confidence in making good decisions about money and investing. Taking on a big project like retirement planning is all about making small steps on a regular basis. As the old philosophers loved to point out, "The journey of 1000 miles begins with a single step."

Comfort-cash to the rescue

2009-11-12T19:55:00.000-08:00

My car went in for routine work recently, but 4 hours later it came out with a $700 bill. Ouch. The week after, my computer had a melt down and needed to be replaced. Double ouch. My comfort-cash fund came to the rescue.

What is it? Comfort-cash is like comfort food. In times of difficulty it sustains and soothes. It's also referred to as an "emergency fund".

Who needs it? Everyone should have it, since no one is immune to life's challenges, like job losses, car breakdowns, health problems or other expenses. These types of situations can eat through your bank account quickly and leave you with money worries or large credit card bills.

If you want to invest, having a comfort-cash fund in place is a prerequisite. Then, when you need money to cover life's unexpected challenges, you won't have to sell long-term retirement accounts or borrow from high-fee credit cards.

How much do you need? That depends on what your living expenses are. Most financial planners recommend at least three months of living expenses go into the comfort-cash fund. If you have dependents, or large debt, you'll need a bigger pot of funds.

Where's a good place to park this cash? Keep it where you can get to it quickly without losing money. Bank savings accounts and money market accounts, or money market mutual funds are good choices. Three month CDs or Treasury Bills work if you have other sources of cash to cover you for the period of time those funds are locked in.

In the quest for financial security and peace of mind, the comfort-cash fund is the number one thing to take care of. It may not be as cozy as curling up with a bowl of homemade soup and popcorn, but I guarantee you'll sleep better knowing you're more financially prepared.

Here's a link to my website, with more information on comfort-cash and other personal finance topics for women. http://thesilverpurse.com/comfort-cash14.html

(Robin has a certificate in Personal Financial Planning)

Inertia and the future

2009-11-05T14:42:00.000-08:00

Inertia can be almost as powerful a force as gravity. It's always easier to take the course in front of us instead of changing that course.

When it comes to women and finance, almost anything looks more appealing than spending time looking for a good investment, figuring out what's really under the hood of any given mutual fund, or just figuring out what our financial goals are.

Yet, when we do pay attention and lend some time to a subject, it tends to flourish. Children do best when parents are actively involved, and your finances will benefit from regular attention and feeding too.

Women don't need to spend alot of time to build financial security. But they do need to spend more time than they currently are. Why? Because the statistics are sobering. Almost 4 in 10 minority women over age 65 live in poverty. And of those over age 65 living in poverty, the vast majority are women.

The goverment and think tanks are exploring some solutions to get all Americans to save more. Some of the possible solutions might be to have all employer retirement plans shift to an "opt out" feature. You would be automatically enrolled in the employer plan, unless you took the time to unenroll. Now, you have to take the time to enroll, or "opt in" before you're signed up.

My new website, http://thesilverpurse.com/ , explores ways to make personal finance more interesting and engaging for women. We especially want to reach and motivate younger women in their 20s, 30s and 40s. This age group has the biggest ally on their side--TIME.

Join in the discussion about women and personal finance. What motivates you, what turns you off, and how do you plan to reach your own goals?