America Saves!

This week, we wanted to do our small part in furthering "America Saves Week".  Slated for February 19-26th and coordinated by the America Savings Education Council, America Saves Week is celebrating its 6th anniversary.  The goal is to encourage employers, organizations and others to promote good savings behavior and for all of us to evaluate our saving and spending habits.

If savings hasn't been on your radar, or that of a loved one, in quite some time, focus first on basic emergency savings.  Most of us should have anywhere from 6-12 months of expenses in a very liquid account somewhere that we can access reasonably quickly.  This can be tough to do, and we hear this all too often, but it's amazing what one less latte a week, using a water bottle instead of bottled water, only buying fruit and vegetables you're actually going to eat (Americans threw out $32 billion worth last year) or some other simple habit change can make to our long term plans. 

If emergency savings are covered, spend some time focusing on college, retirement, or other goals you might have.

Below are some links to details on America Saves Week and related articles that we wanted to share in the hopes that they help you or someone you know. 

America Saves Week - main site of a week focused on savings

America Saves - the non-profit organizations' home site

On Your Mark, Get Set, Save - A savings "how-to" article from Forbes magazine

Take America Saves Week to Heart - An article from Visa's head of financial education programs

ING Encourages Savings in Support of America Saves Week - a CNBC article on ING's recommendations to jump start savings

If there's ever anything we can do to help you sort out what your savings goals might be, please let us know.

Have a great week and happy saving!

The Asset Advisory Group
info@taaginc.com

Enough

At a party given by a billionaire hedge fund manager, Kurt Vonnegut informed his friend, Joseph Heller, that their host made more money in a single day then Heller had earned from his popular novel, Catch-22, over his entire lifetime. Heller responded, “Yes, but I have something he will never have………enough.”

This story opens the introduction to the book, Enough, by John Bogel, the founder and former CEO of the Vanguard Mutual Fund Group. It’s my favorite part of the book, because it perfectly summarizes what I have observed as a financial advisor over my entire career.

When we were first married, and very poor, my husband would tease me when he could tell I was getting stressed over our finances with his quip, “Let’s go buy something to cheer ourselves up!” The sad thing is, many people use acquiring things as a way make themselves happy, and then are disappointed when the good feeling quickly wears off. Years go by and they are never quite able to accumulate what they need to stop working. Our consumer society has helped fuel the growth of manufacturing countries like China, increased the trade deficit, and caused storage facilities to pop up all over the suburbs to help alleviate the overcrowding in our homes.

If there is anything good to come from the Great Recession we have experienced over the last two years, I hope it encourages people to stop and give real thought to what ‘enough’ means to them.

I have been fortunate to observe and learn from the collective experiences of our clients over the past 21 years. People who are conscious spenders, those who know what they are acquiring and why, have been much more successful and able to handle the financial ups and downs that life has handed them. This doesn’t mean they live as paupers, they simply decide early on what is important to them and what isn’t, and then prioritize their spending to enhance the areas of their lives that have meaning to them, versus blindly upgrading and expanding their possessions. This accomplishes two things. The money they spend truly does enhance their lives and adds to their long-term happiness versus giving them a temporary boost, and they have funds left over to save so they don’t have to work until they die.

I realize I may sound like a critical parent lecturing on spending, but it’s much more than that. I’m suggesting that we, as a society, do a lot of mindless acquiring that is damaging to our financial security, and at the risk of sounding dramatic, to our souls. Unlike the bumper sticker, I do not believe that “He who dies with the most toys, wins.”

Jeannette A. Jones, CPA, CFP ®
jjones@taaginc.com
www.taaginc.com

There's a Hole in Your Wallet

Chances are you waste a lot of money each month. You probably recognize some of the ways you could live less expensively, but here are a few you might not:

• If you're stashing your cash in an ordinary bank checking or savings account, you're missing out. It would work harder for you by sitting in a high yield savings account. You can even get an interest-bearing checking account. Check out ETrade or ING.
  
• Your home electronics are sucking juice (more than you would think, too) when they are turned off. If you can't bring yourself to plug and unplug all the time, you can buy power strips that will stop drawing electricity when the item is turned off.
  
• Do you complacently pay your insurance bill when it comes? Rates can vary drastically from insurer to insurer. Re shopping your home and auto insurance could save you a bundle. You'll also want to examine your deductibles and coverage every so often to make sure you still need what you're paying for.
  
• Say you're a diligent saver and you automatically invest a little each month into mutual funds. Make sure you're not paying an upfront fee, or load on that fund. You might also be paying a 12B-1 marketing fee, but these are less expensive and more difficult to avoid than sales charges.
  
• If you're a smoker, you don't need me to point out how much money you're wasting, let alone the more costly medical care you're signing up for in your future. A pack-a-day smoker at $5.00 a pack spends $1,825 a year on cigarettes. If you're a junk-food or tanning bed fan, that adds up too.
  
• Do you really need all those cable channels? I've even had luck reducing my cable and cell phone bills by calling and asking. It's worth a try.
  
• Don't pay for your credit report. You're entitled to your credit report for FREE once every 12 months from EACH reporting company. That means you could be even more diligent and remind yourself to pull your report from a different company once every 4 months. Make sure you visit annualcreditreport.com to pull yours. There are many other sites out there that will be happy to charge you for the privilege.

By Amanda Bashore, CFP®

Arbashore@taaginc.com