Coming Soon! Lori will show you how to prioritize your expenses, understand what you earn and what you burn so well that you do not need to write down every item you buy or every time you spend money.
Lori Atwood's groundbreaking new product to help you gain more control over your finances and have less stress about money.
Feel the confidence and freedom that really knowing your finances, understanding your goals, and sticking to a path to achieve them will bring.
Videos on Critical Financial Topics
Lori Atwood's live seminars show you how to create a household budget, cut monthly expenses, set financial goals and reach them without fights with your partner, or hours of free time spent in front of a spreadsheet! Register here and come get your financial questions answered.
Come see me speak at the following events:
Lil' Omm Yoga
Financial Goal Setting
Sunday, January 26th
4708 Wisconsin Avenue NW
Washington, DC 20016
You and you partner see eye to eye on so many things. You’re best friends, you have similar tastes and even spending habits, yet something seems misaligned with your household finances. You both work really hard and yet you’re not achieving what you want.
Lori Atwood shows you practical ways to discuss your current household finances and financial goals with your partner. She will tell you how to recognize your security and lifestyle needs as they relate to your household finances. Lori will take you through examples of conflicting goals with you partner and how to analyze them to see which goal is really best for your household. She will show you how to negotiate and compromise when it comes to household finances.Cost: $30/family
Consulting Women Seminar - Free
5 Key Financials Every Consultant Should Know
Thursday, 1/30 6:30-8:30pm (7pm Seminar Start)
Shaw Library Conference Room, 1630 7th St NW, Washington, DC 20001
Metro stop Shaw-Howard (yellow/green) or street parking
Lori Atwood shows you how to look at your business from a financial
perspective and how to figure out the critical financial information you
need if you're not a spreadsheet whiz. Knowing what your business looks
like financially is the key to understanding how to achieve your financial
She will talk about knowing your top three financial priorities for
your business, how many hours, clients or projects you need to have to
achieve your goals, how to prevent financial missteps and secure your
business into the future.
Lil' Omm Yoga
Expectant Parents and Money
Sunday, March 16th
4708 Wisconsin Avenue NW
Washington, DC 20016
Amid all the excitement, joy and downright nerves you may have about being a new parent, you may also have a niggling little feeling that your bundle of joy may cost a bundle of money. Lori Atwood shows you how your household finances change after you bring home your baby and how your family financial goals may change, too.
Lori will show you how to assess the changes in your financial life, prepare for them and even feel a little less worried about money. She will discuss how lifestyle choices (staying home with your child, daycare, larger home) will have an impact on your wallet and how to prepare for these changes. Lori will also give you strategies for tracking expenses, watching your savings and achieving your financial goals.
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The Difference Can Cost You Thousands! Load vs No-Load Mutual Funds
Know how your mutual fund fees work or you could be paying too much and eroding your return. If you have between $500 and $500,000 to invest, you probably either owned or thought about owning a mutual fund. It may have even been your first investment right out of college or the investment you made through your child’s 529 plan, but how much do you really know about mutual funds?
A mutual fund is made up of funds from a group of investors who (probably) would not have access to professional money management on their own. The funds are professionally invested in stocks, bonds or other securities with the hope of growing the overall investment (more here).
Mutual fund fees can be high and erode your investment if you’re not careful. Typical fees:
- Expense ratio – operating & administrative expenses/total fund assets - the lower the better (1.3-1.5%). Higher expense ratio does not necessarily mean better performance (see more here)
- Redemption fees – usually a flat fee around 1% for withdrawals made within 1 yr of purchase
- Sales fees – also called Load – paid t to the brokerage firm, financial planner or whoever sells the fund to the investor for “services rendered”.
Let’s talk about load, shall we. Loads can be as high as 8%, but are usually between 3-4%, and the fee is deducted directly from the amount invested. If you invest $1000, you’ve just given $40 to the broker for Load only (this example doesn’t include expense ratio). Now you have $3960 to invest and if you understand compound growth, you will know that you want all your money growing for you.
Load does not pay the money manager (part of expense ratio), who is responsible for getting you the best return possible. As a result, Load does not buy better or more expert money management. Also remember, Load is in ADDITION to the expense ratio, it is not included in the expense ratio calculation. So you must ask or research whether there is a Load on a potential mutual fund investment and how much it is.
There is no reason for you to pay Load, especially with the vast availability of no-load mutual funds. If you have a broker (see last week’s post about how your broker makes money), request no-load mutual funds. If he or she cannot sell you no-load mutual funds, you probably should be using someone else to help you manage your money.
5 Household Money Savings Tips You Can Use This Week!
1. Buy a water filter instead of bottled water
If you buy 1 (16-20 oz) water bottle a day, you're talking about saving anywhere from ($5/24 case) $76 - $730 per year ($2 bottle/365 days). We use a PUR water filter at my house, but you can put a filter on your sink spigot, use a filtered water pitcher or fill your bottles from the refrigerator filtered water dispenser.
Either way, you save a lot of money on bottled water and it's good for the planet. I bought six bottles (REDUCE bottles are great) fill them with filtered water and have them in the fridge all the time. I grab one and then run it through the dishwasher after a few uses. No PBAs, no plastic in the landfill and no worries...
2. Buy regular gas instead of premium
If your car's owner's manual does not require high octane gas, DON'T buy it. It does not offer any benefits to your car and it's expensive. Even if your car's owner's manual does require high octane, you should't need to use high octane at every fill up. You can alternate to save some money without doing anything bad to your car.
if you fill up twice per month with high octane and your tank takes 20 gallons you would save about $4 per tank ($0.20 more per gallon for premium gas) by only using regular gas!
3. Get rid of unread or unused subscriptions !
You know who you are: magazines come every week and you only look at the cover. Netflix sends 5 movies/month and you get through 2 at best, you get recipes every month and you've made 3 in the 4 years since you signed up. GET RID OF THEM!!
if you are more than 3 months behind on any subscription, get rid of it. If you don't open the magazine (i.e. you read only the cover) get rid of it, and here's how: Google will let you cancel just about any magazine with one click!
4. Make one extra meal instead of one night of take out
I know, you don't like, know how to, or have time to cook. That's a load of... Unless you have a newborn or a family member in the hospital, you can put a pot of water on, roast a chicken, or scramble some eggs. Get the kids involved - cooking with your kids benefits everyone.
Saving yourself from take out for one dinner a week could save you about $2000/year for a family of four ($40/meal).
It's a commitment, but it's an easy one with so many health, financial, family time benefits that outweigh the inconvenience any day. I like to make large meals on the weekends and we have left-overs two nights/week. If you don't eat leftovers, make a casserole or pasta dish on a weekend when you have a minute and put it in the fridge or freezer for later in the week.
5. Do only FULL loads of laundry and chill on the temp!
Save on detergent, time, water and electricity (and maybe gas if you have a gas dryer) by washing only full loads. Unless you have very hard water at your house, you can also wash your whites in WARM or COLD not hot and get the same results. You can also save about $200/year washing in mostly cold water.
You can save up to 3400 gallons of water/year by doing full loads. I know, Johnnie's uniform is dirty and Susie's favorite dress has jelly on it, but you don't need to do partial loads. Set a laundry day in your house and only do laundry on that day (or 2 days).
My guess is you and your kids have plenty of clothes for the week and it helps kids learn to plan. Just try it. You will see the house won't fall apart and you spend less time doing laundry and Oh yes! You spend less on detergent, electricity, water and gas (if you use a gas dryer).
"DON'TS" (& 1 DO) FOR PAYING DOWN CREDIT CARD DEBT
If you have balances on more than one credit card, what’s the best strategy to start paying them down?
First, there are a few DON’Ts:
- Don’t consolidate even though it “feels” better to have only one payment, you may end up paying more in interest or fees by consolidating to one card.
- Don’t rush to move everything to an “introductory 0% financing” credit card unless you have read the fine print and know how long and under what conditions you have 0%. Life happens and you may not be able to pay off your balance as quickly as you want and suddenly 0% goes to 23%.
- Don’t start paying down your debt until you have at least $1000 saved, because when little things come up like car repairs, or camp, you will end up charging them again and building your debt if you don’t have a little cash saved to pay for them.
DO - Pay down the smallest balance first so you feel some success and “snowball” your payments onto your other balances. Let’s say you have 3 credit cards and their balances are something like this:
1. Credit card A - $2500 at 19%
2. Credit card B - $5000 at 11%
3. Credit card C - $600 at 16%
COVERDELL ESA: ALTERNATIVES TO 529 PLANS FOR COLLEGE SAVINGS
I did a Primer on 529 plans and a Pros and Cons of 529s article as well, and today we’re going to talk about a different way to save for your kids college: Coverdell Educational Savings Account (which I will call ESA for the rest of the article). Basic things to know from the IRS:
- You can put up $2000/year but you are still limited to $2000 even if you have several accounts
- Beneficiary of ESA must be under 18 years old throughout the time you’re making contributions
- ESA contributions are NOT deductible, which means you pay taxes on the amount you put in each year normally on your return as you would any other money you make
- Growth on ESA contributions are tax free as long as you use the money for qualified education expenses at an eligible educational institution.
- You can use your ESA savings on elementary, middle, high school or post-secondary education. Yes, you heard me: you can use your money on private school!
- If your child (Beneficiary) doesn’t go to college, the funds in the ESA are distributed to him/her and NOT back to you. Deal with it!
- ESA is treated like a 529 plan for financial aid. It is considered an asset of the parent/guardian
- ESA funds MUST be distributed to a beneficiary or rolled over to another beneficiary by the beneficiary’s 30th birthday. Could be a problem for late bloomers.
- You can use the money for PRIVATE SCHOOL or elementary, middle and high school. You cannot do that with a529 plan.
- You get to choose how to manage the money in the account; stocks, bonds, cash or a combo. In a 529 plan you have to choose a manager who makes the decisions and you pay the manager.
- Yes, your money grows tax free if you follow the guidelines outlined above.
Not so positives:
- You can only contribute $2000/year
- You cannot make ANY contributions if their annual adjusted gross income is higher than $110,000 (single) or $220,000 (married)
ESAs are a nice ‘supplement’ to your college savings or a fund from grandparents, but are not going to get you there. At $2000/year, when you fund an ESA at the birth of your child, assuming 4% annual interest, you will have just over $55,000 when your child turns 18. One year of an Ivy League school and maybe a couple of years at a state school depending on the state.
For private school, you’re talking about up to $30,000/year for elite private school in big cities and several thousand for parochial or private schools elsewhere. ESA savings at $2000 per year simply won’t help much on private school because you will use it faster than you can save and grow it in an ESA.
Bottom Bottom Line: I just wrote a blogpost about something that I wouldn't recommend for most people, but you should know it's out there. If you can only put a little aside each year, and you want to control (completely) how it's managed, a Coverdell ESA is a fine product, but really it's not much help to the rest of us.
Beware if your broker is pushing one on you, because it's not that helpful for college savings.
Top 5 Financial "Must-Haves" for Any Household
Lori Atwood shows you her TOP 5 FINANCIAL "MUST-HAVES" for Any Household.
1. KNOW WHERE ALL YOUR ACCOUNTS ARE AND HOW TO ACCESS THEM!! Just in case. I know it's morbid, but just do it then have a little celebration and never worry about it again.
- Step 1 - make a list of all your financial accounts, passwords, keys, ID cards or any other information you need to access these accounts (my video will help you make the list).
- Step 2 - Put the list in a locked safe, or password protected/encrypted or secure app.
2. YOU MUST HAVE A WILL. Morbid again... I know, but if you have a child you DOUBLE MUST have a will with directions as to the care of that minor child.
- Step 1 - Get help from professionals. I used Quicken Willmaker because it's easy and reasonably priced, but Legal Zoom or other sites like it can help too. Just do it!
- Step 2 - Think about the care of your minor child/children - morbid, again, but it has to be done. Ask the person/people you want to take your child if they are willing to do so.
- Step 3 - Sign the WILL and give a copy to the person you named Executor and keep a copy in your safe place (safe deposit box, safe, locked drawer etc.)
3. EMERGENCY SAVINGS... when is something on this list not going to be about dire circumstances, well...
- Step 1 - My video will show you how to figure out exactly how much you need, but to be safe, have at least 3 month of current monthly income and work toward 6 months.
- Step 2 - if you don't have an adequate amount in emergency savings, create a plan to get your emergency savings up to snuff. Watch my video for help.
4. HAVE AN IRA OR OTHER RETIREMENT ACCOUNT! Get in the habit of saving for retirement.
- Step 1 - open an IRA, your bank can help or try a reputable discount brokerage. Find the best online casino kiwi http://onlinecasinokiwi.com/ and win real money! You don't need a lot to start.
- Step 2 - deposit the maximum this year if you can, if not deposit the maximum you can afford. Get started now!
5. HAVE A LITTLE "SLUSH FUND." Finally, good news! You will stay on your plan longer if you reward yourself once in a while.
- Step 1 - put aside whatever you can even $10, $50 or $100 from selling something or a gift. Stash it somewhere safe in a drawer or a sock.
- Step 2 - When you hit a milestone like you've paid off your first credit card or you've saved your first $5,000 for a house down payment, use it to celebrate.
- Step 3 - replenish it as soon as you can for your next milestone.
HOW MUCH CASH SHOULD YOU CARRY IN YOUR WALLET?
How much money should you keep in your wallet? I get this question a lot. Remember, if it’s in there, it will be spent, so let’s think minimalist here.
First, “cash” in your wallet is for stuff that comes up that doesn’t fit into your regular monthly expense categories (e.g. gas, food, entertainment, electric bill): it's your “walking around money" A few weeks ago, I talked about how to track monthly cash usage (the speed at which you go through cash). Today, I’m talking about the minimum walking around money you should keep in your wallet at all times.
For “walking around money” I like to look at it this way:
USER A: rarely needs cash. Pays with credit card or debit card. Always have $10 cash, just in case.
USER B: takes public transport, cabs, pays tolls or uses newstands, kiosks or food trucks - $20
USER C: splits checks a lot, goes out for drinks, dinners or lunches on short notice = $50
If you are USER B and you want to have $20 at all times, you could use your $20 in one day ($20*30 days = $600/month) or one week ($20*4 weeks/month = $80/month). Your cash USAGE is very different, but "walking around money" remains at $20. It's all about pace!
REMEMBER: your cash USAGE (the pace you spend your Walking Around Money) should be no more than 5% of your HOUSEHOLD take home monthly pay for the month.
Let’s do some math, shall we?
If you’re monthly HOUSEHOLD take home pay (your paycheck after taxes) is $5000, then a maximum of $250 per MONTH should last you just fine for “walking around money.” If your household has two adults, and your household monthly take home pay is $5000 then your “walking around money” total for the month should be no more than $125/adult for a total of $250 or 5% of your monthly take home pay.
Make sure you have a minimum in your wallet based on user type (A, B or C above) and take cash as you need it during the month up to that 5% ceiling. STOP when you hit that 5% ceiling for the month (sorry, but you’re going to be pretty slim on cash until the next month). You will learn how to pace yourself on cash if you STOP at your 5% ceiling per month.
If you pay for certain monthly expenses in cash, say, dry cleaning, figure out how much you spend on dry cleaning each week or month and take enough cash out to cover it in addition to your Walking Around Money. They are separate expenses. If you spend $50/month on dry cleaning, take out $50 each month and use it for your dry cleaning. Try not to keep it in your wallet all the time because you may end up using it for something else. Take it when you need it for dry cleaning.
Don’t forget to watch for upcoming blogposts on “my kids ask for cash all the time” and “using cash instead of credit cards.” Visit my blog for my other articles on housing costs, gasoline usage and credit card debt.