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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The Commuting Issue

by Stacy Francis, CFP®, CDFA

This morning, I was stuck in my apartment elevator for 30 minutes. I spent this time, of course, thinking about commuting and happy that my commute is normally only 10 minutes and involves no cars, buses, trains or subways. I moved my apartment next to my office so that I could spend maximum time with my family and friends. I am one of the lucky few who enjoys the trip to and from work.

However, commuting is just one of those things almost all Americans deal with . . . yet few take an in-depth look at the true effects of commuting on their lives. Because not only can commuting be a hassle, a nuisance and a time consuming endeavor — it can be expensive as well. Breaking it down into commuting cost and salary, you may find that your current situation is far from ideal.

Commuting costs are things like gas, car insurance and maintenance, train or subway passes or tickets – whatever applies in your specific situation. You may need to add another car to your household solely to handle the commute. Add to this the time you spend getting to and from work, and you should have a rough estimate of how much your time on the road costs you.

Then consider your salary. How much is left after you have paid taxes and commuting expenses? Could you get a similar job closer to home and save money? And if that is not an option, could you move closer to work and save money that way?

It is important to keep in mind, though, that these aren’t the only factors to consider. Where you choose to live and work is about much more than just money. When adding to the pot your children’s school and spouse’s commute, plus personal factors such as the fact that you happen to love your job and the community you live in, things get even complicated.

Inflation Risk

by Stacy Francis, CFP®, CDFA

As my job is to help people make their financial dreams come true, of course I subscribe to a myriad of newsletters on the topic. While most of them tend to feel like same-old-same-old, this morning, I came across an interesting article about inflation risk. Since this is a risk few people talk about (most don’t find it anywhere near as scary as, say, market risk), I thought I should say something about what it is, and why you should care about it.

In short, you should care because whenever you are considering an income-generating investment, in order to get an idea of the true yield, you need to deduct current and estimated rates of inflation.

Inflation can be defined as the rate with which money loses value. Except under some truly extreme circumstances, all countries have inflation, so all currencies are constantly losing value. When people say things like “the Euro is getting stronger” or “the Canadian dollar has gained value”, all it means is that those currencies are losing value at a slower pace than the currency of reference (usually the US dollar). This is one of the reasons keeping your money in your mattress makes little to no sense, no matter how volatile the markets are. Because by doing nothing to offset inflation, you are losing a couple of percent per year.

Banks typically offer interest rates right around or slightly above the rate of inflation, so by putting your money into a savings account, most of the time, you are neither making nor losing money.

So when looking at income generating securities (especially in a market like this when everyone is buying them, pushing prices up and yields down), keep this in mind: use the after-inflation yield to determine whether it’s really worth it.

There are numerous types of investment risks. Market volatility is just one of them. By balancing the different risks against the potential rewards, you can find the investments that are best for you.

Feng Shui and Money

by Stacy Francis, CFP®, CDFA

A friend of mine had a Feng Shui expert look over her house this weekend. She invited me to come over and watch. Tons can be done to attract wealth into your life, she told me. While I found the in-depth Feng Shui so complex and complicated it’s bound to make you paranoid (or simply give up), the basic message — that when you clean up the clutter in your life, you leave room for new, good things to come to you, makes a lot of sense. So, without going into too much detail, below are a few simple things you can do to draw wealth, success, and prosperity into your life.

The main areas that affect your financial situation are the north (career) and the southeast (wealth and prosperity), along with your kitchen, which is a symbol of money and abundance in every home.

In the north and southeast corners, one of the simplest and most potent things you can do is to add water (if actual water is not an option for you, you can use a photo or a painting featuring water). This is commonly done either by installing a waterfall, or by setting up a fish tank (or bowl, which may be easier to take care of).

When it comes to your kitchen, the stove is a virtually an abundance magnet, so make sure you don’t leave pots and pans sitting around on it while you are not cooking, as they could block wealth from entering your life. It is also a good idea to keep a bowl of change in the southeast corner of the kitchen, or a well-stocked bowl of fresh fruit.




How Much Shopping Is Too Much?

by Stacy Francis, CFP®, CDFA

Flipping through the latest In Style last night, I realized how easy it is to feel that the price tags for the things magazine editors like to tell us we absolutely must have are out of line with our earnings. The consensus among those in the know seems to be that burning more than 10% of your after-tax income on luxuries is insane. But the number may be lower – or higher – for you, depending on your circumstances.

The first things you need to consider are your financial priorities. Are you anxious to achieve financial independence and leave your job as soon as you can? If so, chances are, 10% is too much for you. If, on the other hand, you are the material girl Madonna once sang about, perhaps having a to-die-for closet and that home everyone adores means more to you than an early retirement. Perhaps you even love what you do and can’t wait to get to work in the mornings. If this sounds like you, you can probably afford to splurge a little extra.

The second factor you need to consider is your income versus spending ratio. Are you able to stick to a retirement savings plan, stashing away enough cash to feel good about your senior years? Or are you constantly struggling to make ends meet? In debt, even? This will impact your ultimate shopping budget, too.

Finally, you need to give some thought to those who depend on you. If you are single and make a nice living, you can probably afford to spend a decent amount of money on yourself. If, on the other hand, you are a single mom, or your spouse makes less than you, or you are going through a career change, chances are, a bit of good old-fashioned frugality could take you a long way.

Enriching Your Children’s Lives the Pollan Levine Way

by Stacy Francis, CFP®, CDFA

I just finished Mr. Pollan and Mr. Levine’s book, Die Broke. While I found a myriad of interesting points between the covers, one that really resonated with me was the way they turned the old-fashioned view of children and inheritances upside down.

Why, argue Pollan and Levine, would you keep stashing your cash away into savings your children will receive after you die – most likely when they’re in their forties or fifties and finally at the age where most people are financially stable, anyway? Doesn’t it make more sense to contribute toward, say, their first home, or to help them out during the early stages of their careers, when most people hold low-paying, entry-level positions?

And anyway, wouldn’t this be more rewarding for you, too? Wouldn’t you rather be there to bask in their tremendous gratitude, when you make the dreams that are otherwise out of their reach come true? Instead of watching them struggle to make ends meet? Time is money, after all, and if you make their lives easier by giving them money, chances are, they will have more time for you. Who knows, they may even find themselves in a financial situation to start giving you grandchildren.

Old traditions are wonderful. I am all for traditions. But when someone has a better thought, shouldn’t we take it to heart and make a change? Isn’t that how we ended up with cars instead of horses-and-carriages, currencies instead of the barter system, and light bulbs instead of kerosene lamps? I bet tons of twenty-somethings are dying for you to read this.

Achieve financial independence

by Stacy Francis, CFP®, CDFA

My brother and I had a long talk about financial independence last night, over the most delicious Crème Brûlée. I realized how much the two have in common! Both the dessert and the concept are things everybody craves – yet very few have a clue of how to make them happen. Still, the theory behind financial independence couldn’t be easier to grasp. Put simply, you are financially independent when your investment income meets or exceeds your expenses, so that you do not have to work for a living. For example, if your annual expenses add up to $25,000, and the average yield from your portfolio is 10% per year, then you need at least $250,000 worth of securities in order to be financially independent.

Sounds fab, but how do I make it happen? Well, starting off, it’s all about the difference between what you make and what you spend. This difference you can invest, and each dollar set aside takes you one step closer to the life you want.

If you find that the gap between your income and your spending is too small, there are two ways to mend it. The first one is to make more money. Can you ask your boss for more responsibilities? Switch to a different company — one that pays more? Expand your business or take on a few additional clients?

The second way is to spend less money. Keep a spending journal until you feel you know where your money goes. Then sit down and cut all the things you don’t truly need, and that are keeping you away from that independence you desire. Be ruthless – and you will be thankful later.

Another important thing to keep in mind is that the cheaper you can live, the less capital you need in order to be financially independent. A $300 monthly car payment translates to $3,600 per year, or $36,000 extra that you need to save up before you can quit your job. When you become clear over what matters the most to you, you can line up your life and your finances accordingly. 

The right time to retire

by Stacy Francis, CFP®, CDFA

When should I retire? a woman called me up to ask today. I found it charming; quaint, even, to make such a complex question sound so simple. If only it were so simple that I could just have spouted out age 65 or 55. Would not it be wonderful if you just KNEW what date you could and should retire?

Looking at it from a finance point of view, you can retire when the combination of the retirement benefits you will receive and the average yield from your invested capital is at least as high as your expenses. Keep in mind here, that your expenses may change when you retire. You may wish to travel the world, or spend a year touring the States in an RV. You may want to move to be closer to your children, or simply to a warmer climate. Your expenses may go up, or down, and you need to take all that into consideration before you act. You may also wish to leave money behind for your loved ones, in which case you may need to work a little longer to set the money aside. You may be in good health, or poor.

But apart from the money stuff (which, by the way, qualified professionals will gladly help you with), the most important thing you’ve got to ask yourself is: do you want to retire? Do you enjoy your job? Would your life be more rewarding if you retired, or less? What are you looking to get out of the upcoming couple of years? Would you miss your coworkers awfully if you left your job, or do you look forward to mid-week lunches with your husband?

Whatever your reasons for retiring or not retiring are, there is a financial side, and an emotional side. And only you can balance that equation.

Renting vs. owning your home

by Stacy Francis, CFP®, CDFA

My cousin had his house appraised today, and he was not happy. Of course, he’s far from the only one feeling this way. With the US real estate markets free falling like rocks dumped from skyscrapers, an increasing number of people are growing wary. Very wary.

For years, everyone I’d meet would urge me to buy, buy, buy. Few investments were performing better, and what could possibly beat an investment that you can live in and enjoy while it makes you money?

Today, it’s a different picture altogether. In San Diego county, for example, the median house price dropped from right below $500,000 to the current $390,000 (more than 20%), in only a year. We are all familiar with the market in Detroit (my husband and I just purchased two houses there for a total of $30,000), and overall it is not hard to see why people are nervous. Still, while a nightmare for many, this market presents excellent opportunities for those who have been waiting to buy. But apart from timing and prices, what factors should be considered when faced with this decision?

First of all, there is the issue of fixed vs. variable expenses. While many landlords insist on one-year leases, some will go month to month as well. This is a good option if your income situation is shaky, or if you may be relocating shortly. If, on the other hand, you have a steady income and are set on staying where you are, it might be more beneficial to invest in a house rather than dumping a considerable amount of money into rent each month. After all, the real estate markets are going to turn around sooner or later, and when they do, your investment will start to pay off.

It is also worth mentioning that houses are some of the most marginable investments out there. If you are a knowledgeable investor and tend to score high returns on your investments, it might work to your advantage to buy a house, get a mortgage, and invest the money. As long as the yield from your chosen investment is higher than the 5-6-7% you pay for the mortgage, you can walk away with the difference — and a sunny smile. 

Leave a legacy for loved ones

by Stacy Francis, CFP®, CDFA

When should I start saving for my children? a thirty-something mother of two asked me today. Right now, I suggested. She looked puzzled. Wasn’t it a little early? They are, after all, only two and four. I told her that if she is serious about their financial futures, the first couple of years are key.


The answer is, of course, time. $100 in a savings account is – as long as you invest it sensibly – going to be worth a lot more in 20 years. For adults, this can be the time left until retirement. For an infant, 20 years is the time left until college. Then they have 40 or so more years during which the money can accumulate. Take a look at the numbers below, and it won’t be hard to see why $100 in a child’s account is worth many times $100 in a thirty or forty-something’s account.

Assuming a 10% average yield per year,

$100 in 20 years=$673

$100 in 40 years=$4,526

$100 in 60 years=$30,448

The problem is, when we’re young, retirement is as distant a concept as, say, cancer, or politics. And it should be. But if you implement the following strategy, and teach your children about finances early on, chances are by the time they’re thirty, their gratefulness will see no end.

During your child’s twelve or so first years, save half of everything he or she receives. Whenever a well-meaning aunt, grandparent, or friend gives your child $20, let him or her have $10 to spend, and set the other $10 aside in an investment account. By the time your child becomes a teenager, you can cut the savings back to 10%. But throughout high school and college and entry level job years, keep preaching the importance of saving 10% of everything they earn or receive. Not only do many people find themselves millionaires in their early thirties this way, but your children will be in much better financial shape than their peers once life really starts to get expensive.

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