Finance Made Simple

Whether you yourself are currently experiencing widowhood, or you know someone who is - I want to take a moment to acknowledge your strength. When you lose a lifelong partner, there are moments where it might feel numb, as though moving forward and creating a next-steps plan is outside of your capacity. That’s completely understandable.

Sometimes taking baby steps to protect yourself financially is the best approach. Biting off too much at once could become overwhelming, while not acting at all could be equally detrimental in the long-run. You can stay focused on three simple financial action-items to get started.

 

1. Take Your Time with Changes

It might be tempting to completely change your routine, goals, or living space right now. It’s important to take a step back and give yourself a bit of time before making any major life changes. Often, when we’re in the midst of grieving, change sounds like the perfect way to escape, improve, or push forward past the emotional pain.

However, as is the case with most aspects of your financial plan, impulse decisions don’t usually work in your favor. Taking a moment to think about any changes you’re thinking of making - like moving to a new part of the country, making a major purchase or paying off your mortgage - and discussing them with a trusted financial planner is your best course of action.

 2. Review Your Financial Obligations

Retitling bank and investment accounts, reaching out to creditors, moving utility accounts to your name, and canceling any payments (like a gym membership) in your spouse’s name are a handful of financial obligations you’re likely facing right now. You’ll likely also need to reach out to the credit bureaus to put a death notice on your spouse’s credit.

In most cases, financial institutions and other organizations will be more than willing to work with you to make this process easy. That being said, if this process is sapping your limited energy, enlist help. Having your kids, a close friend, or your advisor help to make the necessary phone calls can be a significant relief.

 3. Start Thinking Ahead

You’ll need a plan to protect your finances both right now and in the future. Part of your new plan may be a payout from your spouse’s life insurance, or Social Security survivor benefits. If you haven’t spoken with a financial advisor yet, now may be the right time to find someone you trust to help you build your financial future during this new phase of your life. Having an advisor on your side to support you through this major life change can relieve a lot of the financial pressure you may be feeling to handle everything alone. It can also help you to avoid any missteps that could affect your financial security.

At Wood Smith Advisors, we help women in all stages of their lives create unique financial plans that address their individual goals. We pride ourselves in being supportive, and walking with our clients through their journey at a pace that’s comfortable for them - especially during a transition into widowhood. If you need help with your finances right now, or just need someone to talk to, we encourage you to reach out. We’d love to support you in any way we can.

Wood Smith Advisors, a woman-owned Registered Investment Advisor (RIA), is a fee-only financial services firm that partners with its clients to simplify their financial lives. We focus on women, entrepreneurs and individuals with complex financial situations, providing objective and competent advice, education and services to help them develop and build their businesses and reach their financial goals. We can be reached by clicking here.

"Finance Made Simple" blog posts are intended for educational purposes and not for specific advice. Each person’s situation is different. Consult your financial advisor for advice relating to topics discussed.

Three generations of women

In most cases, there’s a motivator beyond ourselves that keeps us on track to achieve financial success: our family. We want to make sure our spouse or partner, parents, kids, and grandkids are well taken care of. More than that, we want them to experience the financial freedom to chase their goals, and to achieve big, exciting things with their lives.

You might even have an estate plan in place that provides generously for your kids, grandkids, or great grandkids. But you know what they say about best laid plans of mice and men.

Thinking about purchasing a home but worried you can’t afford it due to student loans? You aren’t alone. According to a study by American Student Assistance, “55 percent of student loan holders said their debt is causing them to put off homeownership.” Most of them believe their student debts would make purchasing a home impossible. The reality, however, is that owning a home is possible even with student debt. Here are some tips on how to purchase a home while still paying off student loans.

Do the following words have you holding your head in fear and confusion - Recession, Depression, Bubbles, Bull and Bear Markets? Do you wonder when morning shows use them whether you should be celebrating or stuffing your money into a mattress? If so, you’re not alone. It can all be a bit bewildering. Good news is, we’re here to help. Let’s discuss the history and definition behind all these terms and what they mean for you.

Buy low and sell high. It’s pretty simple. The problem is knowing what’s low and what’s high.” - Jim Rogers, Chairman of Rogers Holdings and Beeland Interests, Inc.

Buy low, sell high, four words that make the idea of investing in the stock market seem exciting and simple. The reality, however, can be overwhelming and frustrating, particularly if your investments aren’t performing as well as you expected in the markets. Maybe you heard the latest buzz about a new and upcoming technology that had you jumping at the chance to be a part of the action – only to realize later that you purchased high and now their stock price is dropping. You’re not alone.

Blackrock reports, “The average investor, over a 20-year span ending in 2015, underperformed the S&P 500 by six percent.”

Below are a few key reasons that uninformed investors don’t make more money in the stock markets.

In our previous article, we reviewed five tips that parents could teach kids on being ethically responsible with money. This week, we’ll continue our financial education discussion with how we can teach kids about budgeting and saving from an early age.  

How many of us wish we were taught more about money during our childhood? One of the best ways to help our kids avoid financial mistakes in the future is to teach them to manage money.

According to an EverFi, Inc recentsurvey, “More than a quarter of students believe they will be unprepared to manage their finances upon high school graduation. In addition, students surveyed demonstrated that they do not understand basic financial facts and concepts.” Teaching kids basic financial tasks like developing and sticking to a budget will result in strong habits that they can carry into the future. So, now the question is, what financial skills do you teach them? Well, it really depends on how old they are.

Truth, responsibility, respect, compassion and fairness tend to be the global understanding of the values we associate with ethics. But what about financial ethics? How do we teach our children to be ethically responsible with money?

Research shows that the best way to teach children morals and ethics is through example. From an early age, children observe their parents spending, saving and discussing money. They pick up on their parents’ views regarding money just by watching them.  

Last week, we discussed two types of funds – lifestyle funds and lifecycle funds – that aim at simplifying investment strategies for individual investors who may be choosing their employer retirement plan investments with limited options, or just beginning to invest. Lifestyle funds blend stocks, bonds and other investments in order to maintain a consistent level of acceptable risk. Lifecycle funds on the other hand, focus on managing your investments towards a target end date. This week, we will look at whether or not these are options that will best help you meet your financial planning goals.

Do you find the idea of creating a plan for allocating your assets overwhelming? How about choosing a mutual fund? Or designing your investment portfolio? If you’re like many people, investing in your future can be confusing.  

In Part I of this series, we provided a basic definition of deferred compensation plans and introduced questions to ask your financial advisor.

We said a deferred compensation plan is one in which a portion of an employee's pay is held until a specified date, usually (though not always) retirement. A deferred compensation plan:

Congratulations! You’re an executive and you now qualify for deferred compensation plans. But what does that mean?

You might have heard the term “deferred compensation plan” before. If not, you might be more familiar with the idea than the term, so this definition might ring some bells when you put it in context: A deferred compensation plan is one in which a portion of an employee's pay is held until a specified date, usually (though not always) retirement.

Go onto the IRS website or any financial planning site and start looking up retirement plans. Assuming you don’t work in investing or human resources, we can almost guarantee you will be tilting your head and asking, “What the…?” by the time you hit the second or third paragraph. No, it’s not just you. The way this information is presented is daunting at best.

Welcome to A Deeper Look series. One of the ways of understanding finance is understanding many of the terms you are not used to hearing every day. These terms may sometimes be confusing, so it helps to get some background and perspective.

Today, I would like to share the term “asset allocation.” Asset allocation is an investment strategy that incorporates the risk tolerance and investment time horizon of the investor. It may sound simple, but there are many ways to allocate assets within an investment portfolio. Most approaches consider three main sets of asset classes: equities, fixed-income and cash or cash equivalents.  Each class has a different level of risk and expected return, and each will generally perform differently than the other. There are additional classes such as “alternatives,” real estate and precious metals that can also be considered as part of an allocation.

Years ago, in many junior and senior high schools, our youth attended classes about basic budgeting and finances. And often, the only classes were part of a Home Economics track as Life Skills. Sadly, along came budget cuts, and these classes were removed. During my career, I have spent some time in classrooms as a guest teacher, sharing insights and tips for students to become more financially savvy.

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Finance Made Simple

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