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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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.


Give the Little Guy a Chance

by Stacy Francis, CFP®, CDFA

As in any crowd, the noisy guys get most of the attention. In the money world, large capitalization (cap) stocks are always on investors’ minds because they’re so darn big.

But a bunch of little stocks, known as the small caps, have been working away diligently in the background. In today’s investment climate, small caps can have something to offer and should be part of any diversified portfolio. Many of these smaller companies have put peddle to the metal and cut costs, boosted earnings, and benefited from lower interest rates

The addition of small cap stocks to a portfolio can help increase return over the long-term. However, you should probably keep the small-cap portion of your holdings to 10 percent to 15 percent of your overall portfolio. Over the past eight decades or so, small stocks have been roughly 60 percent more volatile on average than large stocks, according to data compiled by Ibbotson Associates. On the other hand, over very long periods of time, small-fry stocks tend to outperform the big boys by an annualized one-and-a-half to two percentage points. As with anything in investing, don’t get too greedy at the expense of taking on too much risk.

Can’t Do It All? Your Top 5 Financial Priorities

by Stacy Francis, CFP®, CDF

“I can’t sleep at night,” complained a savvy lady over breakfast last week. Seeing the dark circles under her eyes, I didn’t doubt it was true. A venti caramel macchiato later, she explained that at age thirty-six, she had only recently started to look into personal finance. Now she felt so bombarded with should-haves that she had no idea where to start.

She has a good point. Even during slow, quiet periods of our lives, it can be difficult to keep up with everything financial. And when things turn crazy, like they do from time to time, it can be near impossible. Fortunately, there’s relief. See below for a list of your top five financial priorities – in order.

  1. Pay your bills – preferably on time. Make sure they don’t exceed your income, and if they do, make it your very first priority to cut your spending and/or boost your income. When your accounts payables and accounts receivables match, and you are no longer struggling to make ends meet, take a breather and give yourself a pat on the shoulder.
  2. Create a financial cushion for yourself. Even as little as a few hundred bucks can have a dramatic impact on your shut-eye. Even better, you will save a bundle on late fees, financing charges, bounced check fees, etc.
  3. Start saving for retirement. Even if the amount you can spare is so tiny, you can’t see how on Earth it’s supposed to make a difference. Not only do the dollars you set aside first matter the most, as they have the longest time to grow, but you get yourself into the habit of saving, which is, as MasterCard likes to put it, priceless.
  4. Pay off your worst kinds of debt, such as high-interest balances and debt where the lender can change the loan terms easily.
  5. Look into long-term disability insurance. This may not be the rosiest of topics, but life can be dangerous and you need to make sure that even if you do lose your ability to work, you’ll have food on the table.

Now, take a break. Really, you have taken the five most important steps toward financial success.

Is there such thing as a kid-friendly bank account?

by Stacy Francis, CFP®, CDFA

Have you ever given a dollar to your child and seen the expression of awe on their face? Imagine how that expression can change in a few years when they have their own bank account that has increased because of interest.  

The problem?  The high fees on low-balance bank accounts mean kids are likely to end up losing money. An ordinary savings account usually requires a balance over $200 to avoid those annoying monthly fees of around $3. This means that a child may pay $36 a year in fees and only earn 50¢ in interest.

The solution? Fortunately, many banks offer a no-fee, no minimum option for minors; however, they do not always advertise that fact–YOU have to ask. If you are lucky, you may find that some banks offer bonuses for kiddie savers like higher rates and prizes for deposits. Compare terms at local banks to find the best deal.

Keep in mind.. What matters most is the experience kids get when they go to the bank to hand over cash and they learn to feel good about saving money. This may be the best financial lesson you can give them.


Big Money VS Little Money

by Stacy Francis, CFP®, CDFA

There is always that friend that makes a little bit more than you or maybe you’re the one who makes more. Regardless, once in a while that feeling of awkwardness arises when it comes time to paying the check or deciding where to go for the night. Wealth differences can drive a wedge between even the closest friendships, where even a sociable lunch can feel weird. However, there are many ways to sustain your friendship without the feeling of guilt or resentment. If You Make Less

  • Be Honest– If you cannot afford it then just say so. Remember, you did not become friends with the opening line: “how much are you making?” Simply say: “Sorry, not tonight.”
  • Give A Little- If you cannot afford to split the check, say so beforehand and offer to pay for something else—the tip or the wine. If you get invited somewhere and he’s paying, contribute in other ways by making reservations.

If You Make More

  • Sometimes, Suggest Burgers- You don’t always have to choose the expensive places to eat– try out a cheap place but make sure you don’t make your friend feel sorry for his or herself. Make it known that quality time is the principal.

Treat With a Purpose or Just For Fun-Treating too much can make your friends feel inferior, so give an excuse—a late birthday gift or a thank-you favor. One of the perks of being wealthy is the ability to be generous, so make sure you treat it lightly, like it’s no big deal.

Savvy Ladies

I Lost My Job – What About Health Insurance?

by Stacy Francis, CFP®, CDFA

I received an email from a Savvy Lady today; a heartbreaking tale of how she had been laid off, and was now trying to figure out how to survive – and feed her two small children, as she is a single mom. One of the expenses she worried about was medical. I think any parent can relate to this: with children around, unless you have the proper insurance coverage, medical expenses tend to run the gamut. For those of you in the process of losing your jobs, here’s how to keep this aspect of your finances under control. First of all, if you are still employed, make the most out of your insurance plan while you have it. Get all your routine checkups out of the way. If you use medications, take out as much as your insurance provider will allow. If you have been putting off procedures, now’s the time to have them done.

Once you do lose your job, know that you have options. Under COBRA rules, in most cases, your company must allow you to keep your insurance coverage for six months, as long as you pay the full premium. While this is great news indeed, there is one drawback. The full premium can be quite a bit higher than the monthly payment you are used to, depending on your insurance plan and how much your employer has been contributing. Do your research – shop around, and request other quotes. You may be able to find a cheaper deal on your own.

Finding the Money for a Baby

by Stacy Francis, CFP®, CDFA

A new mom the second time around, of course I run into many other new moms. Despite the lack of sleep, they’re all so radiant and happy. However, when they learn that I am a financial planner, a different emotion often surfaces – the feeling of being completely overwhelmed with new responsibilities. For most of us, it takes years and years to find the perfect father for our future child. We also tend to factor in safety and the quality of schools when shopping for our first home. Yet most of us fail to prepare for the financial impact of the new family member. Below are a few things you can do.

  1. Get the appropriate medical coverage. Make sure pregnancy checkups, birth, and hospitalization are covered. Of course, when your baby arrives, you need to add him or her to your policy.
  2. Acquire disability insurance before you try for a baby. Just in case, something should happen, you are covered.
  3. Find the right work-life balance. If your partner’s paycheck is big enough to support all three of you, you may want to take some time off to bond with your newborn. If you have flexible schedules, you may be able to take turns caring for him or her.
  4. Sort out childcare. This is an area where a bit of research can make all the difference. Between nannies, pre-schools, co-ops and other options, both quality and price tags vary widely. Don’t forget to take the dependent care credit on your tax return too!
  5. Cash in on your tax breaks. With the Child and Dependent Care Credit, you can save a bundle.

5 Things You Should Know Before You Buy a Stock or Fund

by Stacy Francis, CFP®, CDFA

A friend of mine is an aspiring author, and eventually wants to leave her corporate job. Over bouillabaisse and freshly baked baguettes the other night, she announced that she just sold her first short story, to an Ezine. All smiles, she explained what an important step this is for her writing career since, as she put it, now she’s googlable. This very versatile new verb got me thinking about the many, many ways the Internet helps investors. Just imagine the amount of information now at our fingertips; information to which, as little as fifteen or so years ago, investors had very limited access. Below are a few googlables to consider before you buy a stock or fund.

1. Essence. What does the company (or companies, in case of a fund) do? My general advice is that if you don’t understand the business, you shouldn’t bet your money on it. To stomach the ups and downs in the markets (especially today), you have to feel good about your investment.

2. Sales. Are whatever products and/or services the company produces actually selling? If they are gathering dust in a warehouse, chances are your money will, too.

3. Cost control. A $10,000,000 golf retreat for the executive staff is hardly effective use of your capital. Put it to work elsewhere.

4. Debt. People aren’t the only ones who suffer when overwhelmed with debt. Find the leverage ratio (calculated as total assets divided by shareholder equity) for the company (or companies) you’re considering. If it is higher than 5, reconsider.

5. Bad news. Nothing spreads faster than bad news. If there’s anything fishy going on, chances are somewhere on the World Wide Web, someone picked up on it.

The Scoop on IRAs and Tax Losses

by Stacy Francis, CFP®, CDFA

My friend who is a stockbroker wrote heaps of sell tickets for his clients back in December of last year. This may seem controversial, considering that finance gurus always advise us to sell high and buy low and it has been a long, long time since stocks traded as low as they did at the time. However, selling stocks in a down market has one huge advantage: you can deduct the losses from your taxable income. Especially thinly traded, volatile stocks that have performed poorly throughout the year tend to be hammered to the ground in December, only to rebound in January as investors with a long-term, bullish perspective pick them back up again.

Taking advantage of these losses in your regular, taxable accounts is a no-brainer. But at times, it can pay off to take tax losses in your retirement accounts as well.

Before you read any further, take note that you can never deduct losses in traditional IRAs or 401(k)s. The reason for this is simple: you already made a deduction when you put the money in the account!

However, if you have a Roth or traditional nondeductible IRA, you may be able save a few tax dollars, as long as your cost basis is higher than your current account value. Unfortunately, this type of transaction has several drawbacks.

First of all, in order to deduct a loss, you need to liquidate the entire account. When you want to build it back up again, all the usual limits and restrictions will apply to you. Furthermore, losses in these accounts cannot be deducted directly from your taxable income – they can only be used as parts of an itemized deduction. Therefore, they are much less beneficial for this purpose than losses in regular, taxable accounts.

To sum up, taking a tax loss in your Roth or traditional nondeductible IRA may make sense if you have accrued only a tiny balance and you itemize. If you have a large amount of money saved up, you don’t itemize, or your account is either a 401(k) or a traditional IRA, don’t bother.

Spring Cleanout of Your Investment Portfolio

by Stacy Francis, CFP®, CDFA

I love this time of the year! Trees painted in that fresh, new green, baby birds chirping in the trees, and a sense of excitement in the air. I spent last Saturday preparing my closet for spring and summer: warm, heavy jackets making room for light summer coats, sweaters yielding for shorts and dresses, and boots replaced by cute sandals and heels. Of course, I also had the opportunity to donate the old items that no longer fit (size or fashion wise) to a lovely charity, and to pick up a few new ones – you know, the kind that gives your entire closet a facelift and makes every outfit feel brand new.

For those who haven’t yet gotten around to it, this is the time to clean out your investment portfolio as well. Schedule an appointment with your financial planner to discuss the following:

1. Is all or a portion of your capital invested in a fund, industry, market or company you no longer believe in? If so, it may be time to toss! The same applies if a fund has gone through a shift in management or style that you feel is for the worse. You can access this information in annual reports – or through google!

2. Monitor the Morningstar ratings for your funds, albeit not religiously. The score (one through five) will tell you how well a fund is doing compared to similar funds and relevant indexes – not how good of an investment it is overall. This is why it is crucial to do your own research as well. A two star-rated fund in an upcoming industry may be a better option than a four-rated one invested in a troubled sector. And with this in mind . . .

3. Have any new industries, companies, funds or markets sparked your interest lately? Have you done your research and feel fairly certain they’ll do well in the future? You may want to send some of your dollars in that direction!

4. Do you need to be more conservative, or could this be an opportunity for you to speculate a little? Your investment strategy should change not only with age (typically, the older you get, the more conservative it should be), but also with new market circumstances. If you are young and have plenty of time still, you may want to take advantage of this opportunity to pick up stocks and mutual funds invested in stocks for less.

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