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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STACY’S $AVVY ADVICE
What Type of Spender Are You?
by Stacy Francis, CFP®, CDFA
One of my hubby’s friends works with statistics. He’s one of those people who take an honest interest in how many pets we have per capita in different states, and how many more children families produce in Arkansas than in New York. His latest thing is spending habits. I perked up when he told me his findings. After spending years and years analyzing who spends how much on what, he has started to divide spenders into six different categories.
1. The frugal spender. I know it sounds like an oxymoron. My hubby’s friend defines a frugal spender as “a person who spends as little as possible.”
2. The impulse spender. This person aims to be frugal, but can’t resist pulling out the plastic when he or she spots a good deal.
3. The indulgent spender. While this person may keep tabs on money spent on staples, he or she loves the sweet things in life: spas, vacations, designer clothing, five star restaurants, etc.
4. The balanced spender. This person buys mostly cheap things, with a few luxury items thrown into the mix.
5. The continuous over spender. This is the most dangerous kind of spender. Always in the red, this person fails to learn from his or her mistakes and continues to rack up more debt.
6. The guilt trip spender. This person is often a divorced parent or a cheating spouse. He or she often tries to mend a bad conscious by shelling out the big bucks.
Any of these sound familiar?
For additional reading on the topic of money personalities, check out What Is Your Money Personality?
Stacy Francis is president and CEO of Francis Financial, Inc., a fee-only wealth management practice dedicated to investment advisory services for women, couples and those experiencing divorce. She is also the founder of Savvy Ladies®, a nonprofit organization that educates and empowers women to take control of their finances.
Reduce Stressful Decision-Making
by Stacy Francis, CFP®, CDFA
My brain short-circuited today at Subway. Did I want tuna, or turkey, or veggies, or chicken? I’m sure you know the feeling. Your head spins with what-ifs and doubt and anxiety until you can’t think at all. And this was only a lunch sandwich!
Moving into finance, decisions can be extremely stressful – and rightfully so. While it is true that you can’t buy happiness, doubtlessly, where, how, and when you invest your money will have a huge impact on your future. Taking a wrong turn can cost you your dream home, or chain you to your office chair for another couple of years. So what’s the secret to worrying less?
First of all, accept the old words of wisdom “embrace change, because it’s inevitable”. Not only does your life situation change continuously, but so does the economy, the business world, and the laws and regulations that affect personal finance. If the thought of spending hours every week staying up to date with all these changes makes you sweat – don’t worry about it, just find someone who can do it for you. Politicians all rely on trusted experts for decision-making, and so do most successful business people. A financial advisor could be the solution for you, or a friend or family member with a flair for all things financial. You can appoint anyone you want, as long as you feel comfortable and trusting this person takes stressful financial decision-making off your shoulders.
Another tool that can be of great help is the good old-fashioned gut feeling. Your intuition is always there for you – and it is always right. If you learn to filter out noise and really listen to it, there is no better advisor. And when you act from a point of clarity, results are never far behind.
Should all this fail, there’s always what if/so what if-thinking. Whenever a what-if keeps you up at night, turn it around and instead ask yourself “so what if?” Most of the time, you will find that the worst-case scenario isn’t so scary after all.
No scarier than a sleepless night, anyway.
Provide a Safety Net for Your Family
by Stacy Francis, CFP®, CDFA
I spent last night in bed with the latest Eckhart Tolle book and, not surprisingly, it got me thinking about the ever-changing nature of the universe. From Sartre to the Dalai Lama – this is one of the few things on which all the wise men agree. No matter how much we wish it would, nothing remains the same forever, and especially not our life situations. We get promoted, lose jobs, relocate, marry and get divorced, have children, and lose relatives. As though this weren’t enough to keep us up at night, all these things affect our finances. While the following four actions most likely aren’t enough to make you the next Buddha, they may very well add an hour or two to your shuteye.
1. Leave some equity in your house. That way, if you (or someone in your family) run into difficulties, you can always free up cash by upping your mortgage. But as nothing is more frightening than drowning in debt, save this option for emergencies only.
2. Keep a credit card you don’t use, for code reds only. As you may have noticed, when you don’t use a card, the issuing bank tends to up your limit to tempt you to use it. You can, but only when you have no other choice.
3. Keep a financial “cushion” – enough money to get you through six months without a job. No matter how secure your current employment feels, there is always an element of uncertainty. Put this money to work for you so it doesn’t get eaten up by inflation, but make sure it’s in liquid investments only so you can access it quickly and easily, should disaster strike.
4. Diversify your portfolio. While some investment risks are impossible to insure against, keeping your money in a variety of securities, industries and countries will certainly dilute many of them.
Stacy Francis is president and CEO of Francis Financial, Inc., a fee-only wealth management practice dedicated to investment advisory services for women, couples and those experiencing divorce. She is also the founder of Savvy Ladies®, a nonprofit organization that educates and empowers women to take control of their finances.
15 (Frugal) Ways to Date Your Mate
by Stacy Francis, CFP®, CDFA
Cheap dating ideas from Savvy Ladies Founder Stacy Francis.
Maybe you have a date with that special someone on Valentine’s Day or a romantic dinner with your significant other. Whatever the situation, below are some ideas for a great cheap date with your honey that will save you lots of cash without skimping on the romance.
Get top tips on 15 ways to date and save money, but keep the romance.
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Eat a simple, nutritious dinner at home, and then go out for a truly decadent dessert.
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Pick wildflowers together.
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Go for a bike ride, hike, or run together.
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Pack a picnic lunch and go to the park or the zoo.
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Take a class together in something fun and creative: glass blowing, pottery, drawing, creative writing, or photography.
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Browse in a bookstore together.
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Attend a local high school or college sports game.
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Take a road trip to a nearby town or even another neighborhood in your own city. Stroll around, talk with locals, and have a drink at a local café.
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Read aloud to each other from a favorite novel, poem or short story.
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Attend a theater performance by your local college or community group.
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Go to a flea market or garage sale.
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Attend a local lecture on a subject of interest to both of you.
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Send the kids out to someone else’s house and stay in and cook together.
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Visit a museum on a free or pay-what-you-wish day.
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Have a water balloon fight in the park. Or play on the swings.
You might also want to check out NYC on the cheap and healthy.
It is also smart to budget so you can invest and build your future wealth.
Money Myths That Hold You Back
by Stacy Francis, CFP®, CDFA
Last week, I had the opportunity to help an extremely wealthy woman sort out her finances. Now, my favorite part about this is not the fact that she is one of the largest clients I have ever signed, but that she is an interior designer. She personifies evidence that the money myth holding so many people back from their true potential – that the key to financial success is the right occupation – is not true. Indeed, many lawyers and doctors make a decent living. But so do many musicians, caterers, animal chiropractors, and contractors. With this in mind, allow me to sort out four other money myths that hold people back.
1. Wealth is the result of hard work. I’m amazed that this myth has survived for so long. Just look at all the people who, after a lifetime of hard work, are now struggling to retire. If wealth were truly the result of only hard work, wouldn’t they be loaded? I am not saying that you should quit your job and meditate about wealth as the answer; just that making money is about much more than hard work.
2. Making money is boring. I would beg to differ. Success and passion go hand in hand. If you love what you do, you will prosper. If you couldn’t care less, your apathy will show in the fruits (or lack thereof) of your labor.
3. Money is like fossil fuels; there is only so much of it in the world. Therefore, if your wallet is stuffed, someone else’s must be empty and you should feel bad. Out of all the myths, this may be the most destructive. Devotees tend to resent rich people, and this stops them from getting ahead because if they did, they would have to resent themselves. Sounds silly but many people believe this.
4. Finally, many people hold on to a false belief that money cannot make you happy. Statistics, however, point to the contrary. Age and gender make very little difference, but people who make good money are significantly happier than those who don’t.
How Do You Get the Best Price and Walk Away With More For Less?
by Stacy Francis, CFP®, CDFA
With the holidays in full swing many are left wondering how we can make our buck go further. The best way to get the best price and walk away with more for less is by bargaining. The biggest problem most shoppers have with bargaining is they believe that nice people don’t do it.
The important thing to remember is that bargaining is nothing more than a business transaction. You are simply trying to get something for a fair price. You are not trying to cheat anyone. For many countries bargaining over prices is the norm. In Turkey, bargaining or haggling is actually a deep seated tradition.
You have the right to bargain, especially in smaller stores that don’t discount. Here are some top tips to help you get the best price.
Price limit – Be sure to have a price limit in mind before you approach the storekeepers and be prepared to walk out if they can’t meet your limit.
Be discreet – Be discreet in your negotiations as the shop owner may not want other customers to know that prices are negotiable.
Shop during non-peak hours – When business is slow, bargaining is the easiest.
Be respectful – Treat the sales person and merchandise as you would want to be treated.
Unmarked merchandise – If there is no price tag, this is an invitation to bargain.
End of Year Tax Tips for the Savvy Investor
by Stacy Francis, CFP®, CDFA
You only have a few weeks left to take the bite out of your annual taxes. Here are some tax strategies that you can put into effect before the end of the year, saving money when it comes time to file your annual tax return.
Time capital gains and losses. If you lost money on a stock you sold this year, you can use that loss to avoid paying tax on gains you made in a mutual fund or from a more profitable stock sale. You can offset up to $3,000 of ordinary income.
Look into tax saving investments. Tax-free investments can escape federal, state, or local taxes. Give Uncle Sam the old heave hoe and say no to taxes.
Exercise stock options with care. When stock options are exercised, the gain realized between the grant price and the market price will be included in W-2 income and taxed as ordinary income. Therefore, consider delaying the exercise of any more nonqualified stock options until after year-end.
Maximize those deductions. When itemizing your deductions, you’re allowed to group so-called miscellaneous deductions to the extent that they exceed 2 percent of your adjusted gross income. Included in those miscellaneous deductions are any materials used exclusively for investing — subscriptions to financial magazines, fees for a financial planner, tax prep fees, software, etc.
Stop Flirting With Disaster
by Stacy Francis, CFP®, CDFA
Nobody likes (or needs) to spend much time thinking about a possible future disaster. But sometimes an ounce of prevention is worth a lot more than a pound of cure. Losing precious documents to disasters such as theft, fire, earthquake or flood can cost you countless hours and thousands of dollars as you try to restore them. Buying a fireproof safe will set you back about $100. You decide.
Savvy Ladies’ Tip: Buy a fireproof safe online (Google “fireproof safe”) and have it delivered right to your doorstep. Then store these documents inside:
• Birth certificates, marriage certificate, divorce papers • Passports • Social Security cards • Title to your home (the deed) • Title to your car (the pink slip) • Will, trust, and power of attorney • Advance directives (living will, health care) • Insurance policies (car, home, long-term care) • Stocks and bond certificates • Photographs of your possessions (for insurance purposes)
Buying a Home When You’re Female and Single
by Stacy Francis, CFP®, CDFA
Are you thinking about buying a home? Here’s some expert advice
A lovely little house with a white picket fence and a husband to buy it for her used to be the average little girl’s fantasy, or so goes the stereotype. But these days, the average woman is more than likely dreaming about buying her own home. And according to statistics, she and her savvy single friends are setting records doing just that!
In fact, over 52% of women-headed households in the U.S. own their own homes and single women constituted the fastest growing demographic of first-time home buyers recently.
Nonetheless, the prospect of buying a home on your own can be daunting. In order to purchase the home of our dreams you need to get real about your finances. Here are some questions you need to ask yourself before you purchase a home.
Can you afford to buy a home?
Consider these two guidelines:
1) Your monthly mortgage payment, including principal, interest, real estate taxes, and homeowner insurance, should not exceed 28% of your monthly income before taxes.
2) Your total amount of debt (mortgage, credit cards, car payments, student loans, etc.) should not be more than 36% of your gross income–this is referred to as your debt-to-income ratio.
Sadly, due to low interest rates many individuals are buying more home than they can afford. They strap themselves with mortgage payments that stretch them to the limit and forget to budget for maintenance. When the first thing goes wrong with the home, they’re in over their heads. Ladies, if you can’t afford the sort of place you want to buy — with a loan that does more than just pay your interest — you may want to wait until you can pay a more substantial down payment.
Should you buy?
Are you planning to stay put for three years or more?
If you’re not planning on living in the same place for at least three years, buying is not a good idea. You need to consider the cost of moving and the cost of buying and selling makes renting a smarter move if you plan on living there only for a short time.
Are you willing to maintain it?
Owning a home is more work than renting. No more calling the landlord when the plumbing breaks, the refrigerator stops working and the air conditioner dies.
Is your credit in decent shape?
Be sure to check your credit score at www.myfico.com before you decide to buy. Unless you have a credit score of 700 or above, you could pay above average rates to finance your purchase. That can be costly!
You are ready to buy!
By and large, whether you’re single or divorced, the toughest part of buying a house is coming up with the down payment. However, the following resources are a good place to look for mortgages requiring low down payments.
Fannie Mae: This type of mortgage features a loan-to-value ratio of 97%, meaning you need only come up with 3%. Only people with modest incomes will qualify for this type of loan, and a pre-purchase homebuyer education class is required for approval.
Federal Housing Administration (FHA): This government agency doesn’t offer mortgages, but it does insure residential loans provided by private lenders. This means that once you qualify for FHA insurance, you may buy a home with only 3%-5% down. FHA-backed mortgages have a maximum loan limit depending on the average housing cost in each region.
USDA Mortgage: 100% Financing No Money Down options exist for non-military borrowers, too. The U.S. Department of Agriculture offers a 100% mortgage, too. The program is formally known as a Section 502 mortgage, but, more commonly, it’s called a Rural Housing Loan.
