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.

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Investing More or Paying Down Debt?

by Stacy Francis, CFP®, CDFA

At a recent get-together at my parents house, one of their friends was excited to tell me his company had given him a substantial bonus – one that far exceeded his expectations. Thrilled to have a financial expert at the party, he asked whether I thought he should invest the money, or use it to pay down debt.

This is a brilliant question, and one that is fairly simple to answer. It depends on the cost of your debt, as well as the return on the investment you are considering. Some types of debt, like credit card debt, are expensive, so if you have them you should definitely use the money to pay them off. I know it sounds boring, but you will be happy later, when financing charges stop eating half your paycheck.

Other types of debt, such as student loans and mortgages, tend to have fairly reasonable rates and long payback times. Hence, you may be better off investing the money than paying them off. Say, for instance, that you pay 6% interest on your mortgage, and the yield from the investment you would like to try is 8%. In this case, depending on what kind of risk comes with the potential investment, you may be able to walk away with an extra 2% per year if you invest the money rather than dumping it into your home.

As all the debt my parent’s friend had was a low-interest mortgage, he decided to invest the money – after treating himself to a cruise with his wife. After all, life’s supposed to be lived. As for you, next time you come across a larger-than-expected sum of money, compare rates. The answer to this question is simply mathematical.

Suze Orman on Limiting Holiday Spending Damage

by Stacy Francis, CFP®, CDFA

I read an excellent Suze Orman article last night, and thought I should share. Use these five easy techniques, and it will make all the difference this holiday season.

  1. Consider credit card interest rates. If you plan to pay off your holiday shopping slowly over time, you need to double each dollar you charge in your head to get an idea of the real damage.
  2. Be boring. Before you hit up the mall (or go online), make a list or a spreadsheet tracking your budget, the people for whom you are shopping, and how much you can afford to pay for each gift. Whenever you buy something, deduct the price from the grand total to find out how much money you have left.
  3. Reject store cards. Not only will the discount tempt you to spend more – by the time the bill shows up, you will have forgotten all about it and be in it for a cold shower.
  4. Stay clear of the gift card trap. For instance: someone gives you $100 at Nordstroms. You seize the opportunity to snag the Prada boots of your dreams for $100 cheaper, even if you end up contributing a couple of hundred from your own stash. This is a real killer. If your gift card is $100, spend $100 and not a dime more. That way, whatever you choose from the store remains a gift.
  5. Lastly, and most importantly, remember that even though so many of us try, when it comes down to it, we cannot buy love. Your family isn’t going to love you more because you spend another $50 – on credit and that you can’t afford – on their gifts. If you are in a financial crunch, tell them. You will know they love you back when they say they understand and want what’s best for you.

The Postnup

by Stacy Francis, CFP®, CDFA

One of the main topics at my latest seminar was prenup’s younger cousin, the postnuptial agreement, or postnup. “I didn’t sign a prenup,” one woman confessed, “and my husband’s spending habits are keeping me up at night. But if I demand that we draft a postnup, he’s going to think I want to divorce him.”

A common dilemma indeed. While postnups still lag far behind prenups in terms of popularity, they do fill a crucial function. Signing one does not mean you don’t trust your partner, or that you are getting a divorce. It is simply a way to take control over your finances. If you are contemplating one, here’s what you should know:

  1. As postnups are newer and fewer cases have been tested in court, they lack the solidity of their pre-marital counterparts.
  2. Child support issues cannot be settled in postnups.
  3. There can be no skeletons in your closet, should you go for a postnup. If it turns out you failed to include (or simply forgot) any assets at the time of the drafting, the postnup will lose its validity.
  4. You only need one lawyer in order to draft a postnup, but you need two to put it into practice.
  5. Postnups can be – and frequently are – used to update prenups. This is great news indeed. As your life together changes, you are not stuck but can adapt to the new circumstances.

Should Your Kids Have Credit Cards?

by Stacy Francis, CFP®, CDFA

The children in front of me in line at the grocery store today were no older than eleven or twelve, yet when the time came to pay for their snacks and sodas, they pulled out their MasterCards. I started to wonder, is this normal now? Do all kids and teens have credit cards and – even more importantly – should they?

I started thinking about my son Sebastian. When should he get a credit card? He is only 21/2 but is the right age 10,15 or 20?

This, of course, depends – on everything from your financial situation to your relationship to your children, and in turn, your children’s relationship to money. But generally, I would advise against it. After all, you want your children to develop a healthy relationship to money – one where they spend no more than they earn, preferably a bit less. If money seems to appear out of nowhere (like, out of your bank account) to bail your children out when they get into trouble, chances are they will get themselves into much more trouble later on, when sums and stakes are higher.

There is, however, one major exception: secured credit cards, where you or your children (or both) deposit a certain amount into an account, and your children can learn how to manage money the way most adults do.

If your children are very mature and financially responsible, it may not be a bad idea to allow them to carry plastic as long as you can manage the account with them. But for the grand majority, stick to ATM cards, secured credit cards or good old-fashioned paper bills.

Kicking Your Worst Spending Habit

by Stacy Francis, CFP®, CDFA

In line at the grocery store the other day, I picked up a magazine and spotted an article about women who had kicked the one habit that was the most detrimental to their health. They were able to beat their 20 year habit of smoking. This is such an amazing accomplishment. The article placed great emphasis on the huge impact this had on their lives and bodies. So I got to thinking: why not apply this to finances as well?

We all have spending habits we’re not too proud of. Some of us buy too many clothes. Others gamble. Still others burn oodles of cash on restaurant visits or high maintenance cars, or simply waste it by carrying debt on high-interest credit cards. Whatever it is in your case, making a change could truly transform your life for the better. Of course, no change is too small, and the little changes really do add up and put you in a better position in the long run. But many times, this one change can have a greater impact than all the little ones combined.

My husband and I decided not to get cable in our new condo. This was a huge step as I am a big fan of the Bachelorette, Dancing with the Stars and America’s Got Talent. I know: a little embarrassing to reveal my TV guilty pleasures. Well, not only are we saving money, but we are spending more time together and reading; it was a small change with big results.

So take a step back and study your life as though you were an outsider. How much would you save per month if you got organized and did all your grocery shopping once per week at a cheap supermarket? If you consolidated all your loans into a lower interest one? If you started to bring your own lunch to work three times per week, or bought a thermos for coffee? Chances are the answer will be: quite a bit.

Marriage and Money

by Stacy Francis, CFP®, CDFA

One of the most common reasons women call me up is that they are dissatisfied with the way their husbands handle finances. They would therefore like to learn more, so that they can take over this crucial part of the household management. I had three of those calls just this morning!

It is true indeed that the topic of money always land near the top in surveys about what makes couples fight – and ultimately split. The good news is, much of this damage is preventable. Even more so if you address the following topics before you walk down the aisle.

  1. Financial goals. What are your expectations for the future in terms of wealth, work-life balance, retirement, etc? Don’t be alarmed if your hubby-to-be’s goals differ slightly from yours. This is normal – and natural. As long as you are aware of where your partner stands, you can make compromises that you are both comfortable with.
  2. Financial freedom. Some couples merge everything from their credit cards and bank accounts to stock trading accounts and Blockbuster cards. Others keep their finances separate to avoid fights about different spending habits. Still others keep a joint account for household expenses, and the rest separate. Find the solution that works the best for you.
  3. Existing debt. In today’s society, few people are completely in the black. A bit of debt is therefore not a red flag, as long as you can craft and commit to a plan to eliminate it.
  4. Risk tolerance. If you prefer CDs and bonds while your husband likes to speculate with biotech stocks, chances are you will end up hating each other before you know it. Find a compromise that works for both of you – and stick to it.

Shopping Triggers and How to Curb Them: Depression

by Stacy Francis, CFP®, CDFA

At a seminar today, a woman desperate to take control over her finances confessed that her worst shopping trigger was depression. Whether she was feeling lonely, overworked, fat, poor, or just blue in general, the only way she could cheer herself up was through shopping. While this may sound ludicrous to some, her problem is far from uncommon.

When everything else goes wrong, we reason, can I at least have a Dior lipstick? And for many of us, shopping does create a buzz not all that different from a glass of wine or a divine bar of chocolate. We do feel better, as owners of that gorgeous lipstick that makes us look so special. But just as with any short term high, the problem is, when the warm fuzzy feeling disappears we are worse off than we were before. Because the next time we are feeling lonely/overworked/far/poor/blue, we need to add to the equation that we are also in debt.

In a way, shopping to cure depression can be compared to drinking to cure depression. Sure, our chances for liver failure are significantly smaller, but credit card debt can be a major hassle – and make you feel a whole lot worse. There are other ways to cheer up and lose those gloomy feelings: exercise, spending time with friends, meditation, choosing better foods, etc., etc. – and these are things that will help you in the long term as well. Next time, opt for one of those.

Check out all the articles of our Shopping Triggers series.

What Size Allowance Should I Give My Child?

by Stacy Francis, CFP®, CDFA

At the park today, the moms were discussing allowances. At what age should a child start to receive them, and how much is appropriate? All at once they stopped and asked me, “You are the expert, tell us what to do!” Talk about pressure. I took off the mom hat and put on my financial planner thinking cap.

There are almost as many theories for this as there are experts in the field. The most common system seems to be to give the child $1 per week and years of age. Meaning, for instance, that my son would receive $3 per week, and my friend’s six-year-old daughter $6. But of course, the right amount will also depend on other factors such as

  1. Your child’s attitude toward and awareness of money. Before he or she appreciates it, there’s little point in throwing cash his or her way.
  2. What sorts of expenses your child is expected to cover in exchange for the money. If he or she, for instance, needs to cover friends’ birthday presents and some or all of his or her own clothes, he or she will need a lot more than he or she would if the money were for entertainment only.
  3. How much you expect your child to save. Many parents take care of their children’s savings for them, but if possible, I always recommend that you give him or her enough money to set some aside and watch it grow. For many children, this is an invaluable lesson.

Of course, both the sum and the level of responsibility will change as your child grows older. The most important thing of all is therefore to keep an open mind and constantly rework your allowance system as your circumstances change.

Taxes: Should You File Jointly or Separately?

by Stacy Francis, CFP®, CDFA

Even after tax season has come and gone, one of the main topics of discussion at a recent seminar was: what are the benefits versus drawbacks associated with married couples filing separately? An excellent question. However, just like with so many other excellent questions, the answer will depend on the circumstances. Below are a few examples of cases where it may be a good idea to keep this one aspect of your life together separate.

  1. You or your hubby has made little money and had lots of medical expenses. By filing separately, the proportions of the two may work out so that you or your hubby can itemize the medical expenses and save well-needed dollars.

  2. Your partner uses questionable techniques for keeping his tax dollars to himself. While tempting, such actions are illegal, and if you sign the same tax return, you, too, are responsible. If you file separately, your chances of arguing in front of a jury that you didn’t know are much better.

  3. Your marriage is crumbling. If you are fairly certain that your twosome isn’t going to last, you may want to file separately in order to minimize the paperwork you need to do together later. It is also important to file separately if you are concerned that he is not being 100% honest on his tax reporting.

Last but not least, it is imperative that you stay up to date with the newest rules and limits for the different tax brackets. Taxation is a complicated matter – but you do have options. When you add knowledge to the pot, you can make an informed decision.

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