Stacy’s Savvy Financial Advice
Stay Savvy with our founder Stacy Francis’ latest articles on financial planning, budgeting, debt management, investing, divorce, retirement planning, and more.
Stacy Francis founded Savvy Ladies® in 2003 with the mission to educate women about their finances and empower them to make proactive choices. Inspired by her grandmother who stayed in an abusive relationship due to financial reasons, Stacy has been determined to never let another woman become powerless by financial instability.
Get the resources, knowledge, and tools you need to make smart and informed decisions about your money and your life.
In addition to being the Founder and Board Chair of Savvy Ladies®, Stacy is the President, CEO of Francis Financial, Inc., a boutique wealth management and financial planning firm. A nationally recognized financial expert, she holds a CFP® from the New York University Center for Finance, Law, and Taxation, and is a Certified Divorce Financial Analyst® (CDFA®), a Divorce Financial Strategist™ as well as a Certified Estate & Trust Specialist (CES™).
Stacy has appeared on CNBC, NBC, PBS, CNN, Good Morning America, and many other TV & Financial News outlets. Stacy too is ofter sought out for her advice and can be found quoted in over 100 publications such as Investment News, The New York Times, The Wall Street Journal, USA Today. She shares her wisdom and expert financial advice here for you to learn and get savvy about your finances.
Financial Knowledge is Power. Be Empowered and Find the Advice You Deserve.
Know that Savvy Ladies® is here for you! Should you like to seek advice on a personal financial question, please visit our Free Financial Helpline and get matched with a pro bono financial professional, click here.
STACY’S $AVVY ADVICE
Top 5 Tax Savers
by Stacy Francis, CFP®, CDFA
My friend, who would normally never talk to anyone about money, invited me over for dinner last weekend to discuss her financial situation. Her husband’s salary dropped significantly and they’re struggling to survive on her salary alone. They just crunched some numbers in their efiling software and learned that they owe the IRS almost $8,000. With no savings left except for the money stashed in their IRA accounts, how are they supposed to come up with the money?
Before you pull cash out of your IRAs or take out a loan, I told them, let me take a look at those numbers and see if I can shrink that tax bill. Many people pay more tax than they need to because the tax code is complicated and the thought of studying it in detail makes them queasy.
If you are one of these people, at least make sure you are aware of these top five tax savers.
-
Investment losses. I expect this to be one of the biggest tax savers. If you sold these types of securities, you may be able to deduct the losses from your tax basis. You can offset capital gains against capital losses. If you still have losses left over (as many of us do) you can deduct up to $3,000 off your taxes each year until you have used the total loss.
-
If you have an IRA, take your contributions to the limit. As long as you opened the account before the end of last year, you have until April 15 to add more money – and deduct it from your taxes if your income is low enough that you qualify to deduct your IRA contributions.
-
Itemize. Most people use the standard deduction – to their loss! True, the paperwork involved in itemizing can be substantial. But many times your savings are, too.
-
Skip your AMT. While difficult and best done by an accountant, in some cases you may be able to skip out on this tax (yes, legally) by taking smaller deductions in certain places.
-
Save receipts for those charitable donations. Even my yoga studio has switched over to a donation-based not-for-profit. Keep track of your receipts and you can lower your tax basis.
5 Money Lessons for Teens
by Stacy Francis, CFP®, CDFA, Founder Savvy Ladies
Practical Money Tips for Raising Financially Mindful Children Start at Home.
I read in the newspaper the other day that in a survey, high schoolers answered only 48% of basic personal finance questions correctly. The number was only slightly higher – 65% – for college students. This is scary, as good money management skills are crucial for success – and for peace of mind. It all can start at home, where you, as a parent, can teach your children important financial skills about money.
Five Great Money Lessons that Can Help Your Teens Get Ahead in Life.
Money is not an intuitive skill; it takes practice, time, and education to learn how to be responsible with money. Teaching your child about money is an essential life skill that will benefit both of you in the long run. So, first and foremost, have open and honest conversations about your own money and the family money so your teens understand the value of having money conversations – start the conversation over a meal and make it a monthly habit to ask and talk about money with your child on a regular basis.
- Explain the importance of budgeting. How many teenagers do you know who always run out of money mid-month and beg their parents for more? Teaching your teens to prioritize can make a huge difference as they grow into adults. Understanding saving and spending with their own bank accounts and debit cards is an ideal way for your child to see how the money flows in and out of their account.
- Establishing credit. Regardless of how you feel about credit, the minute your teens are off to college, their mailboxes will brim over with credit card offers. If you teach your teens to handle credit while they’re still at home, the damage is likely to be much smaller. The biggest advantage of a student credit card is the ability to build credit, but your teen needs to be responsible for paying the bill each month, or it can adversely affect future credit if not used responsibly. When looking for the right student credit card, your teen needs your guidance to help understand the fees associated with having a credit card, the monthly payment plan options, and the importance of not spending and charging beyond the monthly means. It’s all a good lesson, but it’s best not to be caught short and have to pay fees each month and get into credit card debt.
- Differentiating wants from needs is, in essence, knowing the definition of fixed vs variable expenses. This is a crucial skill in all aspects of life and no less important when it comes to money.
- Filing tax returns. By becoming familiar with the filing process and learning a few tax smarts, your teens can save a ton of money later on.
- Creating an Emergency Fund. Taking all costs of living into consideration so if a job is not available or job cuts happen, your teen has saved 6-9 months of living expenses to cover the unexpected. Many teens tend to forget about things like insurance, maintenance, and repairs when estimating how much their next car is going to cost them. Taking all variables into consideration when making money decisions – no matter the specific circumstances – may be the most valuable money lesson of all.
Having financial conversations with our children shows that you, as the parents, take money seriously, and you will be setting up your teen with the essential money management skills for a lifetime of financial success.
5 Reasons Why the Recession Rocks!
by Stacy Francis, CFP®, CDFA, Founder Savvy Ladies
The conference I attended last week was a study in pessimism and negativity. I feel that right now, people are paying far too much attention to the negatives and far too little to the many wonderful aspects of the current financial situation. For inspiration, see below!
Five Positive Takeaways When Faced with a Recession
- We save more. For ages now, Americans have been living on plastic, spending far more than we earn, not giving tomorrow that much thought. When faced with fears of financial hardship, we start to set cash aside for emergencies – a first, staggering step toward a sounder financial future.
- We get ourselves out of debt. It may seem controversial: how are we supposed to pay down debt when we make less money? But statistics show that Americans are now shredding debt instead of adding to it – for the first time in ages.
- Investments become cheaper. Stocks, mutual funds invested in stocks, real estate – it seems these days, bargains are everywhere! True, many people have suffered immeasurable losses . . . but always remember that there are two sides to every trade. For every person selling a house at a loss, there’s another person buying it at a discount. If you have the money, this is a fabulous time to invest.
- We learn to prioritize. When money is easy come, easy go, we can have it all. When the supply is cut short, we are forced to set priorities and differentiate real needs from fluff. This will enable us to get more out of our money once we head for the next boom.
- We discover what really makes us happy. It is all so easy. We take a job we never really wanted because we need the money. We get a couple of promotions and raises and adjust our lifestyles accordingly until we are completely dependent upon our income. Meanwhile, our dreams and passions slip further and further away. When we are thrust out of that security blanket and realize that we can survive on much less, we get another chance to give those dreams a go.
What Health Insurance Plan Is Right for You?
by Stacy Francis, CFP®, CDFA
With the birth of my daughter just around the corner, my husband and I spent Sunday afternoon reviewing our family’s insurance coverage. Many times, the addition of a new family member means that a different provider or different type of plan becomes more beneficial overall.
If you are shopping for health insurance on your own or if you are covered through your (or your spouse’s) employer and your open-enrollment period is coming up, below are a few must-knows.
Most health insurance plans fall into one of the following two categories: HMOs or PPOs. When enrolled in an HMO, your co-payments tend to be reasonable, but you must stick to doctors within the network. Many times, you need approval from your primary caregiver in order to be entitled to specialist care or certain procedures.
With a PPO, you have much greater flexibility to choose your providers, but co-payments are typically higher and many PPOs have high deductibles. If you are young and healthy, many times it pays off to select a PPO. If, on the other hand, your children are sick often or you have a chronic condition, chances are you are better off with an HMO.
Whichever type of plan you opt for, there will be a number of different providers available. You can research them online at www.ncqa.org.
Taxes: How Much Should You Withhold?
by Stacy Francis, CFP®, CDFA
With only weeks to go before the arrival of my daughter, I go to a great deal of routine checkups. Fortunately, my doctor’s office is an efficient one, and I rarely have to wait for more than ten minutes. Yesterday, the other mother-to-be in the waiting room was quite chatty. Upon learning that I am a financial planner, she told me all about her savings strategy. She claims zero dependents even though she is the main breadwinner in her marriage and has a son. Consequently, every spring she receives a huge tax refund. She splits the money evenly between vacations and her savings account.
While it can be a major relief to receive a check rather than a bill from the IRS, her strategy has one drawback: in essence, she is granting the IRS an interest-free loan. If she would claim the correct number of dependents, she would keep a larger portion of her paycheck every month, and thus be able to invest the money earlier and start to make returns.
But before you slash your withholdings altogether to reverse the situation, so that you get an interest-free loan from the IRS, note that paying far too little taxes throughout the year can easily result in a $20,000 – or even a $50,000 – tax bill, enough to give the healthiest amongst us a stroke!
So what’s the golden number? Opt for the middle of the road, so that in the spring you get neither a terrifying bill nor a huge refund. That way, you safeguard yourself from financial panic and make the most out of your investment capital.
Top Ten Money Mistakes New Parents Make
by Stacy Francis, CFP®, CDFA
When I showed up at a recent Savvy Ladies seminar with my big belly, naturally, the conversation gravitated toward money and parenthood. Many soon-to-be and new mothers expressed concern about making financial mistakes that could hurt their babies. Below is a list of ten common money mistakes new parents make, so that you can learn from them and make wiser choices.
- Ditching life insurance. Death is an awkward topic – but so is the one of your child not being provided for in case of an accident.
- Ditching disability insurance – ditto.
- Missing out on the tax benefits generated by their newborn. Talk to your accountant or financial planner – you’ll be glad you did.
- Overspending on baby stuff. Your new baby needs many things in order to be comfortable, safe, and happy – but not a $2,000 stroller and an all-label closet.
- Acquiring life insurance for their child. Life insurance is supposed to make up for the loss of income your family would suffer if you kick the bucket. While the loss of a baby surely would be a major tragedy, it would hardly cause financial hardship.
- Getting so worked up over the baby’s savings, they forget to set money aside for their own retirement.
- Delaying college savings. No dollar will matter more than the ones set aside early on. Even if you can only afford tiny contributions, keep at it.
- The UGMA account trap. Not only will your child be free to do whatever he or she wishes with the money when he or she turns 18 or 21 (this varies by state), but large savings in your child’s name will reduce the amount of financial aid for which he or she is eligible.
- Not writing or rewriting their will. Make sure your baby’s fate is in your hands and not some stranger’s.
- Making the decision of whether to stay at home or keep working all about salary versus childcare costs. It’s much more complex than that! You also need to consider things like commuting costs and the value of the benefits package provided by your employer – and of course what you want to do!
Stacy Francis, Savvy Ladies
Family Budget: Keeping Your Kids’ Expenses Down
by Stacy Francis, CFP®, CDFA
I met with a group of new mothers last week, who were eager to sort out their budgets now that two had become three. They all had a good understanding of the types of costs involved, but like many new parents, had underestimated the dollar amounts.
The great news is that kids’ expenses is an area where an ounce of attention really can make all the difference – translation: several hundred dollars per month. So whether your child is a newborn, toddler, grade schooler or teenager, below are a few tips on how to keep staples spending under control, so that you’ll have more money for the fun stuff!
- Brown bags. If you are consistent and make your children lunch-to-go every day, they won’t even know fast food is an option. You’ll have more money – and they’ll be healthier.
- Vintage. It’s very fashionable these days! When your children are growing quickly, while there’s no need to deny yourself the occasional splurge, buy the majority of their clothes in vintage stores. When they have outgrown them, resell. You’ll be saving the planet, too!
- Outlets. For many teens, the world centers around labels. Fortunately, you can find many of them at 25-75% off in outlet stores – and sometimes online.
- Tax credits. When shopping for the right child-care program, be sure to make the most out of the tax breaks granted to you by Uncle Sam.
- The fifty-fifty deal. If you have trouble paying for college, consider having your child do the first year or two of core classes at a community college before heading off to university.
- Score free entertainment. For the creative parent, fun free-of-charge activities abound. Libraries are excellent resources, as is the great outdoors!
What Types of Insurance Does Your Family Need?
by Stacy Francis, CFP®, CDFA
One of the moms from the park called me last night, in tears. Not only had she come back to her apartment to find the door ajar and her things all over the floor – when she got hold of the landlord, he informed her that his insurance policy only covers the building structure – not the renters’ personal property. So when her valuables were stolen she lost not only many dear memories, but the money invested in them as well. If you are one of the many people confused about insurance, below are the most common ones to consider.
- Renter’s insurance. Renter’s insurance is the one the mom from the park now wishes people had told her about. It covers the things inside your house or apartment when you are renting.
- Homeowner’s insurance. Homeowner’s insurance is usually mandatory if you take out a mortgage, and recommended either way. It is also important to note that your homeowner’s insurance needs to be updated when you make major changes or renovations.
- Health insurance. This is a complex one with a myriad of different options. Shop around to see what type and provider and coverage would be most beneficial for your family.
- Life insurance. Many employers supply their employees with this type of insurance. In case yours doesn’t or not enough insurance is provided, you need to purchase it on your own.
- Auto insurance. If you have teenagers who drive, it is generally cheaper to add them to your policy than to get them policies of their own. Make sure everyone who drives your car is covered.
- Disability insurance. This, too, may be provided by your employer (or your spouse’s), but you may also need to purchase it on your own as most employers do not provide enough coverage.
Depending on your unique circumstances, other types of insurance, too, may be beneficial for you. If you have your own business, you will need additional types. You may also want to insure art and other valuables.
Personal Money Management: Dos and Don’ts
by Stacy Francis, CFP®, CDFA
What a day! I met with a total of six different clients, updating their portfolios and helping them set financial goals for the new year. This is what I love the most about this time of the year: change is in the air, and people want to know what they can change in order for this year to bring them closer to their financial goals and dreams. While the unique circumstances – and actions needed – are different in each case, below is a list of general money management dos and don’ts:
-
Don’t cease to contribute to your retirement accounts no matter how the market is performing.
-
Do make sure you have emergency cash at hand – aim for six months worth of living expenses.
-
Don’t try to predict the future. We are all tempted to do it – but believe me, you are better off spending your time and energy on improving your own situation.
-
Do save. One good thing about the recession is that it makes us think twice about overspending. You now need your saved dollars more than ever.
-
Don’t give up on the stock markets. With prices for stocks and mutual funds invested in stocks the lowest in years, this is also the best buying opportunity in a decade.
-
Do invest internationally. Not only do the fundamentals look better for a good deal of developing markets than for the US, but it is also a wonderful way to diversify your portfolio.
-
Don’t put all your eggs in one basket. Diversify.
-
Do track your spending. Most people have an Achilles heel – one area where they literally leak money. Finding this Achilles heel and becoming aware of it can make all the difference for your financial future.
