Jeremy Fulton, Financial Wellness Coach

Tag: Freedom

  • 5 Reasons Why Creating a Will Demonstrates Love

    5 Reasons Why Creating a Will Demonstrates Love

    The reading of the will, as seen on TV: family and friends gather in the lawyer’s office.  The family attorney opens the envelope and clears his throat.  The room goes silent in a instant with anticipation of what’s to come.  As the reading progresses, a mix of emotions and expressions fill the room: elation, joy, anguish, anger, sadness, crying, and the breaking of relationships.

    headstoneHollywood does it’s best to build drama for the audience, but that is NOT what you want to leave behind, is it?

    I remember talking with a client as she was navigating the complex and convoluted process of settling her mother’s estate after she passed without leaving a will.  The time, the difficulties, and heartache of trying to divide up her possessions without severing the fragile family ties was how my client was forced to remember her mother initially, instead of reflecting on all the good memories.

    Writing a will isn’t always easy; to do so acknowledges that you are mortal, that you may loose your loved ones, and that you are not guaranteed tomorrow.  But to do so, to do the hard thing now, is a huge act of love to those who may be left behind.

    Here are 5 ways that creating a will is an act of love towards your family:

    1. YOU decide who gets what.  You are not putting the burden of divvying up your possessions on your executor (legal name for the one who settles your estate).  It is likely that you will have family heirlooms, some wealth, and items that hold sentimental value to your family.  I’m sure you know someone or have heard of someone who experienced a family fall out because someone didn’t get dad’s tie collection.  Communicate your desires ahead of time, so everyone knows where they stand, and why, long before you pass on.  Don’t put that burden on your survivors.
    2. More of your estate stays out of probate.  Probate is the court that settles wills, but probate is VERY expensive and going through it can be very time intensive.  Don’t make your loved ones have to deal with grieving for you AND dealing with the legal system at the same time.  You will also allow more of your hard earned assets to pass to your kin vice the state.
    3. You get to choose who becomes guardians for your minor children.  Before you write your will, talk with your spouse (warning, it can be a VERY emotional discussion) and come to an agreement on who you want to raise your kids should you both pass on.  Then ask the proposed guardians (in person!!! not over text or Facebook!!!!); explain why you chose them.  Then talk to anyone else who might think they would be the guardians and explain why you chose someone else.  It’s a VERY hard discussion, but it must be done to ensure there is peace in your remaining family.  And do you really want the state to decide who gets your kids?   Me either!
    4. It can allow all your possessions to pass to your spouse seamlessly should you predecease him/her.  You don’t want your spouse to have to deal with the courts when she should be grieving.  Don’t add stress to an already difficult situation.
    5. If you have a blended family, it sets up the expectations ahead of time.  Deciding how to divide assets between a spouse and child won’t be easy, but don’t make them duke it out after you are gone; be an adult and allow them to challenge you while you are still around to explain and/or make changes.

    Now, once you have your will (or wills, if married) complete, discuss the contents with all who are affected.  Don’t allow the drama of TV to take place, deal with your decisions now!

    If you have a relatively small and simple estate, you can do your own will, but if you have some wealth, seek out the advice of a quality estate planning attorney.

    There are other ways that a will demonstrates love, how would you feel loved by your spouse/parent/grandparent having a will?

  • How to avoid eating ramen noodles at age 65

    How to avoid eating ramen noodles at age 65

    Retirement.  If you are like me, this is decades away, and doesn’t really enter your day-to-day thinking.  You are probably putting something away for the future, but don’t really have any idea how much you really need to save to make the transition to retirement at the lifestyle you will be living at that time.

    Money in glass jar on wooden tableThe first time I calculated how much I needed to have saved at retirement, my jaw about hit the floor!  To maintain my current lifestyle I will need to be rich!

    Most people spend more time planning a vacation or kid’s birthday party than they do planning for retirement.  They have no idea what they will need to have saved to live at the level they want, nor any idea how much they will need to save each month to get there!

    I don’t know about you, but I don’t want to get to age 65 and realize I have to work to survive, not just work because I want to.  How about you?  Do you know?

    I challenge you to run the numbers in a financial calculator, such as this one to see what you realistically need to save to meet your long term goals.

    What did you learn?  What will you do now?

     

  • Is my landlord responsible for covering my stuff?

    Is my landlord responsible for covering my stuff?

    The smoke detector goes off, awaking you from sleep.  You grab your spouse, children, and pet and rush outside through the smoke.  As you stand on the front lawn, you watch your home disappear in a mix of flame and smoke.  Family heirlooms, photos, your clothes, furniture, and everything is gone in an instant, but you and your family are safe.

    Next comes the recovery.  After finding a new place to live, you call your old landlord expecting him to send you the check to cover your belongings.  Then the other shoe falls; he is not only not liable for your things, but isn’t legally allowed to cover them with his insurance.  What now?

    Fire 2We all know someone or of someone who has lost their home to a fire, flood, or other natural disaster.  We come alongside them and offer them our support, prayers, and hugs.  We wonder why this happened to them.

    Had this family had renter’s insurance, their possessions would have been covered, and they probably would have received money to help them while they found a new home.

    You might be thinking, “Last thing I need now is another insurance payment while I’m working on [insert goal here]!”  What if I told you that the average renter’s insurance premium was only $15-20 a month!

    For the cost of a pizza, you can get $30,000 of coverage!

    So, what are you still doing here, reading?  Get a quote from your auto insurance company (bundling can save $$) now!

    After you buy a policy, please share below what it cost, what city/state you live in, and if it’s an apartment, single- or multi-family house.  Let’s see just how inexpensive it is!

    And as always, if you have any questions on what you need for coverage, let’s talk!

  • How to get more money in your paycheck without working more!

    How to get more money in your paycheck without working more!

    All of us would like to bring home more money for the work we do.  I discovered an easy, legal and simple way to boost your paycheck, without taking more overtime!  If you want to learn what I learned, keep reading.

    Back before I learned this method, I was missing out on several hundred dollars every month!  I look back now and wonder how much more I could have invested, how much faster I could have paid down my debt, how much more I could have saved for trips and ‘toys.’

    What I found out was that I was loaning the Federal Government hundreds of dollars a month at 0% interest!  I bet that you are doing the same thing.  How do I know?

    Almost everyone that I’ve talked to over the years gets a hefty tax refund this time of year.  They look forward to it.  They are happy that they get a huge check.

    What they don’t realize is that it’s not free money, but money that they overpaid to the IRS!  And like I used to do, they tend to blow most, if not all, of it on spontaneous unplanned spending.

    Wouldn’t you rather be able to use that money as you earned it?  Or at least put it in a savings account to earn some interest?  What financial goals are you working towards now, that having this additional income would help you achieve?

    Now for the action part.  There are many W-4 calculators online, including the official IRS one; you can even ask your HR department or CPA for assistance.  Once you have calculated your new withholding amount, fill out a new W-4 and submit it to your HR department.

    The goal is to have as small a refund as possible ($100-200) without owing anything.

    So, how much more will you get out of your next paycheck?  Encourage others with your results!

  • How to Understand Health Insurance

    How to Understand Health Insurance

    HSA, FSA, Co-pay, high deductible, Obamacare, lifetime limits, in-network, out-of-network, and so on.  Its enough to drive one crazy trying to understand all the jargon.  And then to be expected to make an “informed decision” on what is best for you and your family? Forget about it!

    Maybe you just got a new job, lost your job, or are in “open enrollment”, or just want to know how to navigate the labyrinth known as health insurance.  Let me break it down for you, in a way you can understand.

    “The art of medicine consists of amusing the patient while nature cures the disease.”
    ― Voltaire

    I can’t cover everything here, but I will attempt to break down the most common terms, concepts, and offer my advice on selecting a plan.

    I can remember starting a new job back in college, and being given the tri-fold pamphlet showing me the health insurance options.  It was full of acronyms, 5-dollar words, and jargon that I didn’t understand.  My new boss wasn’t much help; all he could tell me was, “I picked that one, ’cause its cheaper.”

    As time has gone by, insurance has become more complex.  I didn’t really understand it well until about 7 years ago, when I left the Navy and no longer had 100% coverage for anything & everything.

    So, here is a list of the most common terms/concepts you will come across, an explanation in layman’s terms, and what I think about it as a choice (if it’s something you can choose):

    • HSA – Health Savings Account; a benefit accompanying some High Deductible plans that allows you to save for specified medical expenses with pre-tax dollars.  You can have part of your paycheck automatically deposited in this account where it will stay until you use it.  It can act like a savings account for large medical expenses or used to get more bang-for-your-buck with routine expenses.  If you have a High Deductible plan, I highly recommend this.
    • FSA – Flexible Savings Account; similar to an HSA, but any money left in at the end of the year is lost.  As in gone forever and not yours anymore.  If this is offered, you need to plan out how much you think you will spend in a year and only put that amount in.  Like the HSA, it is pre-tax, so you can save money by using it, but if you don’t spend it, you will loose it.  I only recommend this if you can predict reasonably well your annual medical expenses.
    • Deductible – the portion of the medical expense that you have to pay before the insurance company starts to pay.  For a High Deductible plan, it could be several thousand dollars.
    • High Deductible Plan – A health insurance plan that has a high initial deductible (compared with other plans), usually starting at $2,600 for families.  After you meet the deductible, medical costs are split between the insured (20%) and the insurance company (80%), until a “max out of pocket” amount has been reached.  At that point, the insurance company picks up all remaining expenses.  Some plans have a lifetime maximum that is covered, so look at your plan and see if it has one.  An HSA usually goes along with this type of plan, and it is usually much less expensive than a PPO or HMO plan.  I highly recommend a High Deductible plan for two types of families: you are very healthy (i.e. you rarely visit the Dr. so don’t have to worry about paying for lots of office/hospital visits) or you are very sick (you will quickly reach the max out of pocket amount, which could be less than what you would pay with a PPO/HMO plan).
    • HMO – Health Maintenance Organization: A type of insurance where the insurance company gets certain providers (Drs., pharmacies, specialists, etc) to accept a lower rate for service.  This is the “network of providers” and you pay a co-pay with each visit and/or pre-arranged fees.  To visit a provider who is “out of network” means paying a LOT more.  Your favorite Dr. may not be part of the network.  Premiums (what you pay each month) are higher than with a High Deductible plan, but your per-visit costs are lower.  I recommend this for families that know they will make many visits to the Dr and/or hospital.
    • PPO – Preferred Provider Organization : similar to an HMO with a couple differences: you don’t need to designate a primary care doctor, nor do you need a referral to see a specialist.
    • Cost Sharing Network/Ministry – This is not insurance, actually, but a group of people who decide to share the medical costs of the group across the group’s members.  Depending on the specific organization’s set up, members either send a monthly payment into a large pot from which expenses are paid from, or members write checks directly to other members.  In a Cost Sharing Network/Ministry, money is paid directly to the members who then pay their bills themselves.  While this is not insurance, it does meet the “insurance” mandate of Obamacare. In contrast to insurance, the organization is not legally liable to pay out for claims, but the good ones will uphold the stated policies.  Most of these do not ‘cover’ routine medical expenses, such as physicals, but will cover for sickness, injury, and/or maternity costs.  If you are self employed and/or not eligible for a group insurance plan, this type of ‘coverage’ could be the most cost effective.  I currently use and strongly recommend Christian Healthcare Ministries.
    • Co-Pay – Under a PPO or HMO plan, this is the portion of the cost that is your responsibility.  For example, you might have to pay $20 each time you visit your doctor, or $500 for the emergency room.
    • Network of Providers – Under a PPO or HMO plan, this is a group of service providers that have agreed to charge lower rates to members of a particular insurance plan.  If you decide to use a provider outside of the ‘network’ you will pay much more in either co-pay or have a higher deductible.

    There are many, many more words & terms that I could describe, but I think I covered the most important and common terms that you will run across.  If there is one (or more) that I missed, please post it in the comments and I will address it.

    Feel free to bookmark this post for future reference and share it with your friends and family!  If you need help deciding on what what is best for your family, give me a call and I’ll help you navigate your specific situation!

    860-469-2274
    jeremy.fulton@me.com

  • What if this one thing did happen to you?

    What if this one thing did happen to you?

    He never thought it would happen to him, that it could happen to him.  He was careful: he never took huge risks, thought through his actions before taking them.  But it wasn’t enough to protect him from this.

    He fell.  He fell far, and by the grace of God he survived the fall.  He should have died, but by a miracle he survived.

    But now he can’t work; this hardworking, family man can no longer provide for his family, through no fault of his own.

    1 out of every 4 people in the US will suffer a disability before retirement.

    What if it was you?

    What if something happened to you that removed your ability to provide for your family?  How would they eat?  How would the rent get paid?  How long can you go before they cut off your lights and heat?

    The way to protect your family is with Long Term Disability Insurance (LTDI).

    But you are still thinking that you won’t ever get hurt.  1 out of every 4 people in the US will suffer a disability before retirement.  And every second someone becomes disabled!

    LTDI usually pays out 60-65% of your gross pay for the duration of the disability.  This works out to be pretty close to most people’s take-home pay!  And if you buy it with after-tax dollars, it is not taxed!

    You may still be thinking that you don’t need any more deductions from your paycheck, and besides, isn’t that what workman’s comp is for?  Workman’s comp won’t cover an injury if it happens outside of work, and knowing many people who have had to fight them for what is due, I wouldn’t recommend relying on that to cover you, either.

    • Many employers offer LTDI (and short term disability insurance), and purchasing it at work is the most affordable way to get it.
    • There is an ‘elimination period’ of usually 90 days before LTDI kicks in; cover this income gap with your emergency fund.
    • You don’t need short term DI because you have an emergency fund.
    • Purchase your LTDI with AFTER-tax dollars, if given the option, so that you won’t be taxed on your benefits.

    If you are not sure what your employer offers, talk to HR and enroll if it is available ASAP!  If you want to review what your employer offers before signing up, contact me and I’ll help you understand each benefit your employer offers, and help you decide what is best for you and your family.

    Share with me your experience with LTDI and/or workman’s comp!

  • How to save money every day the way I do

    How to save money every day the way I do

    Here at the Fulton’s we are always looking for legitimate ways to save money.  Especially when it comes to every day expenses.  Some of these you probably already do, others will seem extreme, and the rest you will want to start doing today!

    Everything I’m about to talk about is something we currently do, use, buy, own, or have previously done, used, bought, or owned.

    • Ting mobile phone service.  Ting is a pay-per-use service, so you can control your bill!  Our bill, for two smart phones, went from about $150 on Verizon to about $35 with Ting!  Ting uses the Sprint network, so it’s reliable.  They will even credit you up to $75 to get out of your current contract!  Click here to see how much you can save.
    • Menu Planning.  My wife plans out two weeks of meals at a time, then generates the shopping list based off of this.  Between having a plan for what to cook/eat and shopping with a list, we cut our grocery bill by 25%!!!  My wife uses this App/service; it’s not perfect, but works for us (let me know what you use)
    • GasBuddy.com.  If you want to compare gas prices before you head out the door, this site is great!  Prices are reported by users of the site and app (yes, there is an app that you can use!).  Don’t waste your time/fuel driving around to find the best deal!
    • Lower the thermostat.  In the winter, we keep the thermostat pretty low (55F!) and wear warm clothes inside, and blankets while sitting on the couch.  We both work in the same room/office, so we use a small oil-filled space heater to keep that room at a reasonable temp.  In the summer we use fans, except when it’s too hot for that.
    • TV.  I cut the cord years ago, “giving up” traditional satellite TV service.  We will check out movies (and TV series) from the local library (they can get movies from other libraries if it’s one not in stock),  or use Redbox.com for a new release (pro tip: reserve online or w/ the app to ensure the movie you want is at the kiosk closest to you).  Also, now there is the option of streaming content from the internet; devices such as a Roku, AppleTV, ChromeCast, or Fire TV allow you to stream free content or inexpensive subscription programs such as NetFlix, Amazon Prime, or Hulu+.
    • Cloth napkins.  And no paper towels.  Not only do cloth napkins add some ‘class’ to your meals, they don’t cost anything to re-use (they will fit in your normal laundry load)!  We use old hand-towels instead of paper towels.  Again, they don’t add measurably to the laundry (and are tougher/more absorbent than paper, anyway!).
    • Cloth diapers.  With Baby-J on the way, we wanted to find out how to keep costs as low as possible.  We calculate that we will save several thousand dollars over the course of two children; this includes the cost of buying quality diapers, extra laundry loads, and our time.
    • Amazon Wish List.  This may seem counter intuitive, but hear me out.  I’m a spender.  So I’ll put stuff I want or think I need on the list instead of buying it right away (even if it’s in budget).  I’ll take some time to price shop and to just let it sit.  Many times I’ve removed something from the list, either because I realized I didn’t really want it that bad, or I found a better option.
    • Buy used.  Craigslist, eBay, etc are all great  places to find used, quality goods (80% of my furniture, and my last 4 cars were found on Craigslist).
    • Buy quality.  When it counts.  Some things, like baby clothes, don’t matter, but with many things, buying it once, for a little more, if better than buying it many times.  Or the usability factor can make it worth while to buy the better model.
    • Cash Flow Planning.  This is the single BEST way to reduce your spending and save money.  It forces you to be intentional about your spending.  It is how we ensure we only spend on what is important to us.  It reigns in the impulse spending and prevents overdraft fees.  We use You Need A Budget (YNAB for short) as our budgeting software.  It is super easy to use, has a free mobile app, great resources, forums, FB group, and even has a good looking interface!  I’ll be writing a formal review on it, soon.  But for now, download the free trial here.  If you want to buy it, save $6 by using this link.

    What money saving tips would you like to share?

     

    Disclosure: some of the links provided are for referral programs.  By clicking those links, I will receive an account credit or money.  You may also receive a credit from those same links.

  • Mutual funds; the good, the bad, and the ugly

    Mutual funds; the good, the bad, and the ugly

    First things first, what on earth is a mutual fund?  If you remember, I said that I recommend investing in them as part of your investment portfolio.

    According to Investopedia.com, a mutual fund is:

    An investment vehicle that is made up of a pool of funds collected from many investors for the purpose of investing in securities such as stocks, bonds, money market instruments and similar assets.

    In simple-speak, a bunch of people pool their money with a professional fund manager to take advantage of opportunities not normally available to small investors.

    Like all things in life, there are pros & cons to investing in mutual funds.

    The Good

    • Diversification – your invested money is spread among several stocks.  This is the opposite of “keeping all your eggs in one basket.”  If one company does poorly, the effect on you is limited.
    • Professional management – most people (myself included) don’t have the time to evaluate, in depth, all that should be evaluated in a stock before buying it.  The fund manager’s only job is to maximize performance of the fund, by picking good stocks.
    • Economies of scale – since the fund manager is buying huge amounts of stocks at a time, the transaction fees are much lower than for you or me.
    • Mutual funds are liquid assets – they are easy to convert to cash, unlike real estate or bonds.
    • Simplicity – investing in mutual funds can be as simple as an automatic bank draft, payroll deduction, or buying from the fund’s website.
    • Variety – If there is a sector, stock style, social impact, or any other area you want to invest in, there is a mutual fund for you.  In fact, there are more mutual funds than stocks!

    The Bad

    • Professional management – Not all managers do as well as they should.  Just because the fund is professionally managed, doesn’t mean it performs well.  Look at the manager’s track record, along with the funds track record before investing in it.
    • Over diversification – if the fund has too many stocks, a great performance by one or a few might have minimal effect on the overall fund value.
    • Taxes – all capital gains taxes are passed on to the investors.  If the fund is churned a lot (the manager buys and sells the fund assets a lot), investors could be liable for more capital gains taxes.  You can look at the fund’s turnover rate, or having the funds as part of a tax-preferred account such as an IRA or 401(k).

    The Ugly

    • Fees – Fund managers have to be paid.  There are costs associated with the administration of the funds.  There is no such thing as a free lunch!  Fees, referred to as expense ratios, can range from as low as 0.2% for some index funds, to over 2%!  The fees will be listed in the fund’s prospectus.  These take away from the fund’s overall performance, so look carefully at them.  Another fee to be aware of is a sales charge (load).  This is how some advisers get paid (think commission on sales); there are many different ideas on the value of advisers and what the best fee structure is (I won’t go into it here), but I will say is that a good adviser is worth his/her compensation.  With loads, the more you invest in one fund company, the lower they are, and at some point they usually go away.  If you pick a low fee fund and invest regulatory, you may end up paying less in fees than you would buying several different stocks each month on a self service site (up to $9/trade).

    Final Thoughts

    It’s important to know the details of a fund before deciding to invest in it.  A quality adviser will teach you why he/she recommends a particular fund or group of funds.  They will help you pick funds that have a low expense ratio, a good track record of performance over the long term, and are appropriate for your needs.  Mutual funds are a great investment tool for average Joes like us!

    If you are ready to start investing, I can put you in touch with a qualified investment adviser who has the heart of a teacher!  If not, I can get you ready.  Contact me today:

    jeremy.fulton@me.com
    860-469-2278

  • Should you should KISS your investment strategy?

    Should you should KISS your investment strategy?

    You know what K.I.S.S. stands for

    Keep It Simple Silly

    And you thought I was going to insult you!

    We’ve both heard that “serious investors” have complicated and advanced investing products and strategies which enable them to make more than us mere mortal investors.

    • Hedge Funds
    • REITs
    • High Yield Bonds
    • FOREX trading
    • Commodities
    • Penny Stocks
    • Etc, etc, etc

    I will admit that there is potential that someone could make a lot more with these. There is also the potential that you could loose it all!

    I have one overriding investment philosophy that I teach my clients:

    Never invest in anything you don’t understand well enough to teach it to someone else.

    Think about it; if you have a thorough understanding of your investments, how they work in the market, and what makes them ‘go up’ or ‘go down’ then you are a lot less likely to panic and worry when the Dow Jones dips. In fact, you might even see a silver lining in market drops!

    It is possible to learn all the ins-and-outs of the more complex investments, but what will it gain you? Do you have the time and desire to become an expert? Or the time and desire to manage those investments?

    I’ve been trained in all that stuff (through the Certified Financial Adviser program) and I could teach you a lot of it, but I still don’t have a “sophisticated” investment strategy.

    Because I don’t have the time to manage my portfolio every day and want to keep my risk to a manageable level, while taking advantage of the long term growth of the market, I stick with mutual funds.

    Mutual funds are easy to understand, have high diversification (my eggs are in lots of different baskets), and are easy to invest with. I even invest in mutual funds that cover different market sectors to increase my diversification even more! (If you are not sure what a mutual fund is, please ask!)

    Boring? Yes. Simple? You bet! Do I know enough to teach you how they work? Of course! Give me a call and I’ll teach you today! Then you, too, can have confidence in your investments!

    What are your thoughts?

  • My Confession To You

    My Confession To You

    I am not perfect

    No surprise, right?

    I am not perfect with money

    There, I said it. It’s true. Even though I’m a Financial Wellness Coach I am prone to making mistakes and not enjoying everything I have to do to succeed with money.

    Sometimes the only thing keeping me from raiding my emergency fund for new camera gear is my wife.

    Sometimes I don’t want to spend the time saving for something and get a credit card to get it now.

    Sometimes I forget to write my budget before the first of the month.

    Sometimes I get a credit card offer in the mail with a “great” points system and think that I could get free stuff and not develop bad spending habits.

    Sometimes I see Amazon.com’s offer of free money to sign up for their card and want to “take advantage” of the offer.

    Sometimes I overspend a budget category.

    Sometimes I forget to pull out cash to use for our grocery budget and use the debit card, hoping I don’t overspend the budget.

    Sometimes I want to not invest 15% of my income for the future and enjoy my hard work today.

    Sometimes I don’t want to act like an adult.

    But I am an adult

    And my wife & future child depend on me being responsible. Sometimes when I do what is right, its not because it’s fun, easy, or makes me feel good. It’s because as an adult I force myself to see beyond myself, beyond now, beyond how I feel.

    When I make a mistake, I look at the WHY. I try to learn the cause of it and change my behavior/habits to not make the same mistake twice.

    What keeps me on the straight and narrow, financially?

    My wife, first of all. She is my accountability partner and any mistakes I make will be known and addressed (with love and forgiveness).

    You all; Writing, teaching, and coaching about responsible personal financial actions & habits forces me to do the right thing. I know that the moment I sign up for a credit card or car loan, my credibility with you is lost, maybe forever! I would not trust a coach who acted opposite of the way he/she coached.

    What do you struggle with? How do you overcome those struggles?