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
The iPod Issue: How Much Can -and Should- You Spend on Your Children?
by Stacy Francis, CFP®, CDFA
I took the subway uptown today, to meet a colleague at a favorite lunch place. Turns out, the subway I was in also had twenty-something ten-year-olds, on a field trip coming back from the New York Stock Exchange. As Sebastian is only three, I don’t spend a lot of time around older kids. Now, I couldn’t stop staring at their iPod Nanos, glossy cell phones, Seven jeans and designer handbags.
It got me thinking about the finances of reproduction. How much do parents spend on their children these days, and how much should they spend?
A bit of Internet research told me that the average family spends $7,500 per year and child, not including added expenses pertaining to the increased living space. If you have enough money to set 10% aside for retirement savings, live comfortably, and stay out of debt while spending $7,500 per child — go for it! But if you have to cut back on savings, skimp on your own needs or pull out the plastic, you should consider cutting back. But how do you make this happen without turning into the mean mom on the block?
An excellent way to go is to give your children some financial responsibility. If you increase their allowances, and in return require that they buy their own clothes, they may think twice about those $200 jeans when they see everything they have to pass up to get them.
Other ideas include sticking to the cheap stuff while your child is still too young to care about brands — and outgrows things quickly. Vintage stores for baby clothes can be true treasure chests – and you can sell the clothes back when your child has outgrown them. You can also scale down on things like extravagant birthday parties, and of course, encourage your children to take on part time jobs when they grow older. I know that my years at Dairy Queen helped me become the hard-working successful woman I am today!
Should You Do Your Own Taxes?
by Stacy Francis, CFP®, CDFA
My college friend was red-faced and bursting with anger when we met for after-work cocktails the other day. She arrived straight out of a meeting with her tax accountant, who had failed yet again to get her the tax refund so many people received last spring, and for which she was eligible. “Next time,” she muttered between her teeth, “I am going to do the taxes myself. What am I paying him for anyway?”
I tried to explain to her that whether or not you get a tax refund should not reflect on the quality of your accountant. In the safety of my home, away from her rage, I realized that her real question is “Should you do your own taxes, or hire someone to do them for you?”
To answer that question, here are a few things indicating that you could be better off on your own:
-
You know your filing situation (you are up to date with legislation, know your status, etc) and have a very simple financial situation.
-
You are organized and have your paperwork ready to go.
-
You prefer not to disclose your financials to anyone.
On the other hand, these things may be signs you need help:
-
Your financial situation is complex.
-
You don’t want to waste time and energy preparing your return.
-
Your life has changed drastically, and your filing this year will be very different from last year.
-
You want the confidence of working with a trusted advisor.
Or, alternatively, if you are so furious at your accountant that you run the risk of expiring from a heart attack, you may also be better off on your own.
Credit Card Overwhelmed: Notes on Debt Consolidation
by Stacy Francis, CFP®, CDFA
“My credit cards are driving me insane,” a friend complained to me over mochas (bought with cash) yesterday morning. “It’s like I can’t stop thinking about how much debt I’m in, because the minute I’ve sent off one minimum payment, I get a bill from a different company.”
I asked her if she had considered debt consolidation, and she replied that she had heard about consolidation loans, but don’t you need to own your home to get them?
The truth is, there are numerous options for those looking to save time, hassle and frustration by combining all their monthly payments into one. Below are a few:
- Credit card transfers. This can be an excellent way to go, if – and only if – you are certain that you’ll be able to pay off your balance before the low introductory interest period is over. BEWARE: Watch out as rolling your debt from one card to another can hurt your credit scores.
- Home equity. This is the loan type to which my client thought I was referring. For those lucky (or unlucky, depending on how you view things) enough to own a house, this can be a great way to lower your interest and get better payback – and overall – terms for the money you owe. BEWARE: I know too many people who have innocently moved their credit card debt onto their home equity line of credit, only to rack up new credit card debt only months later.
- Loans against retirement funds or life insurance policies. Most employers allow this for 401(k) plans, and most insurance companies don’t even require that you pay back the loan – you can deduct the balance from the benefits paid to your beneficiaries. While the latter may not be too happy, this is an option and worthy of a mentioning. BEWARE: Taking money from a 401 K can impact your retirement security. Not to mention many loans are due in full 60-90 days after you leave or are fired from the company.
- Nonprofit credit counseling agencies. The employees of these agencies do debt consolidation for a living. They negotiate with credit card companies daily, and will be able to score you the smallest possible fees and most favorable interest rates. BEWARE: Not all credit counseling agencies are the same. Do your homework and make sure that you are working with a reputable company.
These are just a few examples of ways to get control over your debt situation – simple ways to commit to a plan that both eliminates your debt and takes your mind off it. Always remember that many people have had this problem before you – and many have gotten out of it.
Top Financial Fears
by Stacy Francis, CFP®, CDFA
This weekend, my family and I decided to go for a picnic in the park. So we filled a basket with Dean & Deluca foods and headed outside our door to Battery Park. There, the smell of grass, the sun, and the majestic beauty of the skyline behind us should have been a wonderful experience . . . except everywhere around us, people were voicing their concerns about the crumbling economy and its impact on their financial well-being. Do I have exceptional hearing or something? I am not sure why those around us were so loud about their financial woes. A construction worker reported that it’s been months since his employer last paid him on time. A new mother was packing up the baby room in preparation for the foreclosure looming at the horizon. An investor said his doctor refused to prescribe him any more sleeping pills, but instead advised him to take his money out of the markets.
Unable to drop the topic, when I got home, I went online to research financial fears in the US today. These turned out to be the most common:
- The rising cost of living. Nearly two thirds of Americans worry about their salaries not keeping up with rising costs of living, such as food, gasoline and medical expenses.
- Job security/recession. More than a third are anxious about losing their jobs. Almost nine out of ten are concerned about the recession, and two thirds worry about the future of their investments in the shaky stock markets.
- Debt. Credit card debt seems to keep the most people up at night, followed by student loans, medical bills, and home equity lines of credit.
- The housing crisis. Some worry they’ll be forced into foreclosures, others suspect that high mortgage payments will force them to trade their homes for less nice ones. Still others fret over repairs and maintenance they cannot afford, and almost everyone seems to worry about falling house prices.
- Savings. More than two thirds of people between 31 and 50 are worried because they either have nothing set aside for retirement, or can’t afford to save.
For whatever it is worth, if you are concerned about these things, you are clearly not alone. If you’ve been reading this blog regularly, you also know that there are steps (many of them small) you can take to reduce these worries and regain control over your finances.
Laid Off? How to Get Back on Track
by Stacy Francis, CFP®, CDFA
I think most of us know someone who has lost his or her job recently. To me, this recession became a reality when a client called mid-afternoon (and mid-latte) yesterday to let me know her company had let her go. Now, being a long term Savvy Ladies devotee and subject to my continuous reminders, she has enough money stashed away to survive six months without income. But of course, she was still devastated. What did I think she should do?
“The most important thing to keep in mind,” I told her, “is that when you are unemployed, the job hunt becomes your job.” So stick to your pre-lay off routine, the only difference being that rather than hopping into your car (or the subway) in the morning, you sink down in front of your computer and get to work on those applications. If you keep at it, you will have a new job long before your emergency funding (or unemployment) runs out.
Of course, browsing job sites is not the only thing you should be doing. If you’ve been doing your networking duty, you should have a number of contacts you can get in touch with, just to let them know that if they hear of an opening, you are interested. Former colleagues, relatives, friends and college buddies can all come in handy when it comes to getting you back on your feet.
Money Management for Couples: What to Do When Your Opinions Differ
by Stacy Francis, CFP®, CDFA
Something interesting happened in my latest Savvy Ladies telephone conference. When one woman told the group that her husband’s sloppy attitude toward money was so frustrating to her, she wanted to divorce him for this reason alone, every woman in the group expressed their support. Several of the married ones even told her they could relate because they were having similar issues in their marriages.
It is no secret that “financial differences” is one of the most common reasons couples split. While sad indeed, there are things you can do to get past these issues. Below are just a few.
- Draft a budget. Sit down together and put your expenses and financial goals on paper. Be realistic, and make sure that sticking to the budget won’t require too much effort. Remember that budgets are like diets – they never work if they’re unrealistic.
- Communicate. It is common knowledge that lack of communication rarely solves any problems, yet so many couples fail to talk openly about their financial differences. Approach them in a calm, non-threatening way, and focus on finding constructive solutions that you work for both of you.
- Be considerate. Whether you intend it or not, the way you manage your money will affect your spouse as well. Make sure he or she is comfortable with your spending and investment habits.
If this doesn’t work, consider seeing a marriage counselor, a financial planner, or both. They can apply an outsider’s perspective to your specific situation, and hopefully find solutions that will get you past your problems. Remember, you are far from alone.
Lending Money to Family and Friends
by Stacy Francis, CFP®, CDFA
I received an interesting email this morning. It was from a mother-of-two in her early thirties, who was broke because over the past five years, her parents had continuously borrowed money from her, supposedly to get into some miraculous investments bound to triple within six months. Of course, none of these had worked out, so they didn’t have any money to pay her back. Her children needed new clothes, she needed a new car, her husband needed a vacation . . . and her parents were giving her guilt trips for refusing to lend them more money. When she told me this story I had to keep myself from asking her parents phone number and calling them to give them a piece of my mind!
This situation may sound terrible, but I have heard similar stories before. Which is why I generally advise against lending money to family members and friends. Many friendships have ended this way, and within families things can – and do — get really ugly. Your own children can be exceptions, but even there, make sure you
- Put everything, including amount and conditions for the loan, on paper,
- Have a clear payback plan, and
- Don’t lend them another dime before they have paid back the original loan.
- Use a lender like Virgin Money to legitimize the loan so that you protect your assets.
Like I said, in 99% if the cases, don’t do it. But if you are going to anyway, at least make sure you cover the steps above.
Securing Your Job in Shaky Times
by Stacy Francis, CFP®, CDFA
At the bar in my favorite Asian fusion restaurant the other day, waiting for a table, my hubby and I overheard an interesting conversation between two twenty-something women. Apparently, one of them had lost her job earlier that day, and her friend was helping her drown her sorrows in martinis.
“You didn’t see it coming at all?” the friend asked.
“Of course I did,” sobbed the newly unemployed woman. “But what was I supposed to do?”
This conversation actually took me back several years to when a dear friend of mine was laid off. We had this exact same conversation.
Actually, there’s plenty you can do to keep the same think from happening to you. One thing I continuously remind people worried about their jobs to do, is to keep learning new things. The world is constantly changing, and you need to adapt and keep up. Take an evening class or finally master that program your boss wants to implement. Ask if you can take on a new type of project. Offer to cover a colleague when she goes out of town. This does not only show your boss that you care about the company and are interested in your job – you also come across as useful and versatile; the kind of person she would separate out and hang on to in case of a mass-layoff.
Of course, there are no guarantees. But don’t forget that the happier you make your boss, the nicer the letter of recommendation she will write for you if she does have to let you go.
Writing Your Will
by Stacy Francis, CFP®, CDFA
I facilitated a workshop at a conference last week, on the topic of wills 200 men and women attended my session. Considering how many attendees the conference had, which was over 5,000, I was shocked to see how few took an interest in estate planning. Shocked and concerned, actually. Why? Because everyone needs a will – if not for their own peace of mind, then to make things easier for their heirs during a time that is tough enough as it is.
Put simply, just like a prenup details what should be done with a couple’s assets in case of a divorce, a will outlines how your assets should be distributed after you die. And just like state laws take over when divorced couples do not have a prenup, you get stuck with a universal will if you do not bother to write your own. This means the state will decide who in your family gets what, often putting your spouse in a less-than-pretty situation.
So what should your will cover? Basically, it needs to state what should be done with your property when you die. It also needs a statement at the end containing your explanation that it is indeed your will, your signature, date and place of the signing, along with witnesses’ signatures and statements from them that they really did sign your will, in your presence, and watched each other sign.
We highly recommend that you work with a estate lawyer to write a will. But you do need to be at least eighteen years old, and in a sane state of mind.
