The only online publication for women in Greater Cincinnati
Financial

by -

Write it down. Despite the ability to log in to my checking account from virtually anywhere, I still maintain a written record of all transactions in my account. First of all, it helps me avoid overspending. Some merchants take a couple extra days to post a debit, so the balance may be inflated on any given day. But maintaining my checkbook register also serves as an adequate reference for more practical purposes such as remembering how much I donated to my favorite charities the year before or what to budget for winter heating bills based on the previous year’s bills.

Don’t float it. I learned the hard way how the newer policy on “floating debits” instituted by most banks works. There was a time when you had a couple days before a transaction posted to get the money in your account, but those days are no more. When money was tight, I would sometimes begin spending my Friday paycheck on Thursdays, knowing that by the time the debit posted to my account my paycheck would be there to cover it.

However, the last time I did this (and I’ll never do it again!) the Thursday debit was held by my bank, and the five outstanding charges from earlier in the week posted overnight, causing an overdraft with each post. With overdraft fees in excess of $30 per item, I ended up paying more than $300 to my bank, even though the money from my paycheck was there by the time the original debit posted. Remember that when you run your debit card through the terminal at the store, you MUST consider the money spent. Likewise, when you write a check, most merchants are now converting the check to an electronic debit right there at the cash register.

Don’t forget automatic payments. Another reason that I write everything down in my checkbook register is that I have several payments that automatically come out of my account on pre-determined dates. These payments typically post at the end of the scheduled date, so if you log in to check your balance on the same day that a payment is scheduled, you may accidentally overspend and end up with another hefty overdraft fee. I’m a big fan of making bill payments automatic so that I don’t have to worry about late fees, but it does require a little diligence to make sure I account for the payments each month.

Use the "Log Out" button. It’s easy to flip to the next Web site after checking your bank balance by just typing a new web address in the browser. However, this may not serve as an adequate safeguard against identity theft or data security. This is especially important when using a public computer. Even if you are the only person who ever uses your computer, do not take the chance that your sensitive banking data could be fraudulently accessed by not actively logging out. I have not heard of anyone having this problem before, but why take the chance?

Online banking can save you time and even money with its convenience and ease of transferring money from one account to another. Just try to avoid contributing to your bank’s bottom line with fees by following these tips and keeping your finances in good order.

by -

I have to confess that I had quite the debate with myself over whether to write about holiday shopping in October, but the money-saving maven in me won out over my disgust with the retail industry’s yearly jumping of the gun, putting Christmas ornaments out before back-to-school items are even off the shelves. The thing is, I prefer to give my family and friends thoughtful, useful and unique gifts. Someone once told me that the best gift is “that thing that I really need that I didn’t even know I needed.” With this in mind, I actually do start thinking about gift shopping before Thanksgiving.

To start, I carry a notebook in my purse that has a page dedicated to gift ideas for each person with whom I exchange gifts. For example, when my mom visited me for a week this summer, she unknowingly wrote her holiday wish list as we shopped and talked. If she fawned over something at a store or commented on something she liked, I noted it in my book on the sly. Not only does this make it easier for me to remember my ideas, but when I need retail therapy, I head to the mall with a purpose rather than buying more clothes for my overstuffed closet.

Having an idea ahead of time of what I’m seeking also allows me to take advantage of sales throughout the year, rather than succumbing to the gimmicky sales on typical gift items offered in December. Perhaps your dad really does need a shaving kit, which is an easy find at department stores before the holidays, but wouldn’t it be more fun to add some creativity that will make him think of you each time he uses his gift?

My dad carries a hanky in his pocket (no comment on the "ick" factor, thank you very much), and after hundreds of washings, his handkerchiefs are threadbare and ragged. I purchased a pack of plain hankies on sale at Target and stitched his initials onto each one with embroidery floss. Now I have a gift that is needed, personal and inexpensive.

Adding a personal touch to store-bought items is a great way to make a gift unique and meaningful, but it also takes time. If your calendar is anything like mine during the holidays, you will have trouble finding time to brush your teeth, let alone time to customize gifts. Starting in October ensures that you will have the time necessary to let your creative juices flow and make your gifts into something memorable. Just don’t forget where you put them once they are ready!

Finally, purchasing gifts early spreads the cost out, helping avoid the cash crunch that causes many people to turn to credit cards at year-end. You also will find that the adage, “It is much better to give than to receive,” may actually be true as you watch your loved ones open their heartfelt treasures, rather than hoping they don’t hate the item you hastily pulled off the shelf on your way to the party.

Happy gifting!

by -

I recently attended an event where the keynote speaker was a woman who shared her motivation for success: a strong desire to be able to take care of herself should the need arise. I couldn’t help thinking that every woman (single or married) should aim for a similar goal.

Years ago, I coached a 50-year-old mother of three teenagers through the unexpected death of her husband, who was a successful physician. There were weekly tearful phone calls, as she dealt with the fear of running out of money and not being able to pay for her daughters’ education. While she ended up being okay, there were certain steps that could have been taken before her husband’s death that would have alleviated a lot of the fear and change.

First of all, every woman should have enough money set aside to support herself for about six months in the event that she loses her support system. For most women this equates to about $20,000, which would cover the basics of rent, utilities and living expenses. Don’t worry if you don’t have that kind of money in a savings account right now, but get started today on building it! Saving $50 per paycheck is a good place to begin.

Second, it is vital that certain legal documents are in place to protect you and your family in the event of an accident or illness. A healthcare power of attorney and living will are two documents that EVERY person should have in her safe deposit box. Even if you are single without children, you don’t want to place the burden of determining your wishes on your parents or siblings should something happen to you. Your doctor probably has a fill-in-the-blanks living will that you can complete until you have a chance to work with an attorney to draft a more formal directive.

It is also essential to have a last will and testament in place, particularly if you have children. A will not only ensures that your assets are passed on to those you wish to receive them, but it also directs who is in charge of any outstanding affairs you may have (this person is called the executor) and names the desired guardian of your children. Without a will, state law determines the administration of your estate, which can lead to additional heartache and loss for your loved ones.

Finally, you must ensure that adequate life insurance is in place to support your survivors should the unthinkable occur. For married couples, both partners should have at least a term policy in place on each other. The amount of insurance needed is dependent on each family’s situation, but at a minimum should be enough to pay off any outstanding debt such as a mortgage, cars and credit cards plus a reasonable amount to allow the surviving spouse to live comfortably while he or she deals with the loss without worrying about finding work.

This is the area where my client’s husband had scrimped, leaving his family with life insurance equal to only one year of his salary. Faced with the reality of maintaining her lifestyle on a relatively small lump sum, my client had to make some tough choices about finding work, selling the family’s home and putting off a car purchase for her daughter.

While the above list is a good place to start, I also strongly recommend enlisting the assistance of a financial coach, attorney or other financial professional to make sure the necessary steps have been taken to ensure your family’s security. It is not a fun process, but like fixing your roof before it caves in, you don’t want to find out what happens if you DON’T do it.

by -

Since I’ve started my financial coaching business, rarely a day goes by that a woman friend doesn’t remind me of the need for basic, non-technical explanations of investing terms. One of my main business objectives is to take the pain out of learning about investing and to make it a little more entertaining. Read on for an explanation of some of the more common terms you may encounter as you take charge of your investments.

 

Public Company: A corporation whose stock is traded on a stock exchange (such as the New York Stock Exchange or NYSE), allowing investors to buy shares of ownership in the company. When a company “goes public,” its original owners sell all or part of their stake in the company on the open market in the form of stock. Investors then buy and sell the shares of stock, which are traded daily.

 

For example, when Martha Stewart’s company (MSO) went public in 1999, ownership of Martha’s various enterprises shifted from Martha and other private investors to any investor that was willing to pay the approximately $35 per share at that time. For context, MSO is currently trading at about $6.50 per share.

Heyman_InStory.jpg

 

Market Capitalization: A common way for the investing community to measure the size of a company. Sometimes called "market cap" for short, it is calculated by multiplying the number of shares of stock trading on the stock market by the current price of the stock. For example, MSO has 54.73 million shares trading on the market. At about $6.50 per share, its current market cap is $356 million.

 

Large Cap: An abbreviation for “large market capitalization,” which describes companies with a market capitalization greater than $10 billion. An example of a large cap company is Procter & Gamble.

 

Mid Cap: An abbreviation for "middle market capitalization," which describes companies with a market capitalization between $2 billion and $10 billion. Examples of mid cap companies are Aeropostale and Dick’s Sporting Goods.

 

Small Cap: Companies with a market capitalization between $200 million and $2 billion. MSO is considered a small cap company.

 

Risk tolerance: The degree of uncertainty that an investor can handle if her portfolio decreases in value. The lower an investor’s risk tolerance, the less she should invest in stocks, though she also is giving up the opportunity for greater reward.

 

Time horizon: How much time an investor has until she will need to use the assets in her investment portfolio. The longer an investor’s time horizon, the more risk she should be able to tolerate. A 35-year-old investor may have a long time horizon for her retirement portfolio but a short time horizon for her savings toward a down payment on a home.

 

Asset allocation: An investment strategy that aims to balance risk and reward by distributing a portfolio’s investments according to the investor’s risk tolerance and time horizon. The three main investment classes are equities (stocks), fixed income (bonds) and cash. The stock portion of a portfolio is then divided among different asset classes, like large cap, mid cap and small cap, to diversify the exposure to all sizes of companies.

 

I have found Investopedia to be very helpful with basic explanations. Information on specific companies is simple to find at Yahoo! Finance as well. And of course, keep an eye on this column for further information. I’m always interested to hear from readers on what they want to learn, so please consider e-mailing your ideas my way.

by -

We’ve all heard the advice about how important girlfriends are to keeping our sanity. When no one else understands, we always have our gal pals to remind us how fabulous we are. Yet it’s easy to get caught up in everyday life as we juggle career, family, volunteering and simply keeping the house clean. It’s easy for a whole month to pass without any time with our girlfriends.

Enter Girls Night Out — a designated evening when girlfriends dress up and meet at the latest hot spot to catch up on each other’s lives. Invariably the event includes a stop at the ATM, and before we know it, we’ve done serious damage to our account balance.

Girls Night Out is expensive! Even just a couple glasses of wine and an appetizer can cost more than $30 at some of my favorite chichi restaurants in Cincinnati. And I won’t even mention the damage a dirty martini and scallop from BOCA can do (though I have to say it’s worth it). So what’s a girl to do when she’s bound by a budget but doesn’t want to miss out on the fun? Girls Night In, of course!

To get started, assign everyone a food or beverage item to supply. Then catch up on the cheap by gathering at a girlfriend’s home. (Don’t you want a chance to show off your decorating prowess anyway?) To add a little variety, consider assigning a theme to the evening. My mom’s BUNCO group designated one month “Miss America” night, and each member came as a Miss Someone. Miss Calculated, Miss Understood and Miss Demeanor all made appearances, adding humor to an already fun gathering of girlfriends.

Another thrifty idea is to have a clothing and accessory swap. Have everyone bring an item from her closet that is trendy and in good condition that she’s ready to pass along, then swap and barter with each other. Everyone leaves with something new to add to her wardrobe without spending a dime. I also have done this with books, and I haven’t bought a book at the bookstore in years!

If you and your girlfriends enjoy exercising your creativity, consider an arts and crafts night. For example, have each gal bring a ball of yarn, knitting needles and a little bit of patience, and start everyone knitting her own scarf. It only takes a few minutes to get started, and as long as one girlfriend knows how to knit, she can quickly show everyone. You also can refer to online tutorials, which is how I learned to knit. If knitting is too technical, try beaded jewelry or making personalized note cards.

For a pampering Girls Night In, organize an at-home spa. Set up a facial station, pedicure chair and manicure table, and then take turns treating each other to beauty treatments. Everyone should bring her own products like facial masks, nail polish, pumice stones, etc. Just make sure everyone gets a turn!

With a little creativity and organization Girls Night In can be just as fun as Girls Night Out — and much more budget friendly! In fact, I think it’s time that I scheduled my own Girls Night In with my ladies. Get out your calendars, girls!

by -

We all know to head to the clearance rack at our favorite fashion outlet in hopes of discovering a hidden treasure, but sometimes we have a specific item in mind or the sale racks just aren’t proving fruitful. Try some of these savings tips that I use to enable occasional retail therapy without suffering buyers’ remorse.


1. Go Faux in Style: When purchasing trendy items that may only be worn once or twice before going out of style, avoid expensive labels. Faux leather handbags or inexpensive accessories can be found at discount retailers that look very similar, if not identical, to the real deal found on fashion runways. I’ve fooled many friends with my stylish handbags purchased at Forever 21 for less than $40!


2. Dress for Success: A little black dress easily can go from work to happy hour to evening wear with a simple change in accessories and/or hair style. Plus, it is only one item of clothing that offers countless looks by pairing it with different accessories. Find two or three knee-length solid-color dresses in fits that are flattering to your figure, and mix them up with tights, boots, belts, scarves and chunky jewelry. My black turtleneck sweater dress has proven to be a wardrobe staple.
EDDIELANE_INSTORY.gif


3. Invest in the Basics: When it comes to tailored black slacks, flattering jeans, a chic pencil skirt or seasonless trench coat, go ahead and splurge. These classic items (in neutral colors) can be worn again and again as the foundation of your wardrobe. Add accessories and trendy items to stay in style. By spending a little more on quality, these garments will last years.


4. Recycle and Refresh Your Wardrobe with Resale: Clean out your closet and make some quick cash by selling your gently-used but still fashionable items. Take those items you’re no longer wearing to a consignment shop and receive some of your investment back. Resale shops pay you up to 50 percent of the price at which they are able to sell your items, sometimes paying you when you drop off the clothes. I also have heard that craigslist
can be a great portal for selling used clothes.


5. Stay in Season with Color: Determine the season of your skin, hair and eye color, then stick to your season’s palette when purchasing clothes. For example, if you’re an autumn, you’ll look smashing in oranges, golds, browns and olives. But pastels will only wash out your color and will end up hanging unworn in your closet. Springs, on the other hand, glow in pastels and should avoid the fall colors. To figure out your season, visit a make-up counter or salon make-up artist for a free consultation. Or for a more in-depth evaluation and fashion advice, hire an image consultant to help. The Association of Image Consultants International has a membership directory to aid in the search.


Above all, I try to abide by my own rule of thumb: If I bring a new fashion item home and don’t have an immediate desire to wear it and it is not for a specific occasion, I take it right back to the store. It’s almost more gratifying to receive the refund than it was buying in the first place!


Happy bargain hunting!

by -

These days most professional women who have been employed full-time for at least one year have access to an employer-sponsored retirement plan such as a 401k, 403b, profit-sharing or similar benefit. And being conscientious savers who prepare for the future, most women participate at least to the extent that their company will match. (Side note: If your employer offers a 401k match that you’re NOT taking advantage of, I recommend you begin as soon as possible. Don’t pass up free money!)

After the initial setup of their retirement accounts, women often struggle to ensure that they are maximizing the options available as time goes on. They have a tendency to choose the investment allocation then "let it ride," and rarely, if ever, do they make changes. Without taking control of an investment and making the appropriate changes, the opportunity to achieve the best performance possible often is missed.

Keeping your retirement savings on track, however, does not require an excessive amount of time or investment expertise. What it does require is a systematic, unemotional approach. A woman being unemotional may sound crazy, but it very well could be the key to maximizing the money you are stocking away each paycheck. Here’s how:

First, let’s start with a quick overview of choosing the correct allocation of contributions. Most plans offer a variety of mutual funds that allow participants to diversify savings across all investment categories, such as Large Cap, Mid Cap, Fixed Income and International. It’s important to spread contributions among the categories, but how much you put into each depends on your time horizon and risk tolerance. In general, the more time you have to save, the more you should allocate toward stock investments, which are more volatile (like Large Cap, Mid Cap, International), and less toward fixed income investments (bonds, T-bills and money market).

Once you’ve selected your contribution percentages and started funding your retirement account, set a reminder to revisit it in six months. This is where the unemotional part comes in. Every six months, regardless of the performance of your investments, you should rebalance your portfolio back to the original allocation you set for your contributions. This will require selling funds that have outperformed and adding to funds that have underperformed, which is counter-intuitive to what feels right. Why sell from a fund that is doing well to add to one that lags? Because you aren’t looking to win a sprint by investing all your money in one winning fund. You are striving to finish the marathon with a steady and reliable pace.

As time goes by you also need to shift your allocation toward more fixed income and away from stocks in order to stabilize the portfolio’s volatility. An easy rule of thumb that I share with clients is to shift five percent from stocks to fixed income every five years. For example, if your allocation is currently set to 80 percent stocks and 20 percent fixed income, then in five years you might consider changing your contribution percentages to 75/25. However, the specific allocation recommended will vary according to each person, depending on age, risk tolerance, goals and options available in the plan. Consider enlisting the help of an expert by consulting with a financial coach, a financial planner or your company’s retirement plan representative to help you decide on your allocation.

Above all, by investing just a few minutes of time every six months to rebalance your retirement account, you will be taking a more active role in securing your future and ensuring that your hard-earned savings will be working just as hard for you.

by -

"Life comes at you fast," Nationwide insurance company reminds us with their television commercials. In the blink of an eye, we can move from fiscal fitness to fight-or-flight finances.

Whether your financial situation is interrupted by loss of a job, divorce, illness or other unforeseen circumstance, the most important element to financial survival in a crisis is cash-flow preservation. Here are some tips to help stretch your dollars while enduring a financial hiccup.


It almost goes without saying that you must cut out unnecessary expenses, but think beyond weaning yourself off your daily latte to include "fixed" household bills and personal care. Can you: Cut back on your cable package for a few months? Wait a couple more weeks before having your hair cut and colored? Freeze your gym membership and exercise at home for a little while? Remember that generally this is only a temporary situation, so it’s not like you’re giving yourself a permanent lifestyle makeover. Evaluate each expense to see if you can survive without it for a while.

BittyBreeze_In-Story-Ad.gifg


While you should try to eat at home as much as possible, you may be unable to avoid dining out under certain circumstances. If you must go to a restaurant for a meal, pay attention to the prices on the menu and consider ordering off the appetizer menu and trading your soda for water. You will be surprised at how much restaurants charge for a fountain drink!


Take a hiatus from aggressively paying down any debts, and just pay the minimum balance due to save cash. Make sure that you continue to pay on time, though, as even one late payment can compromise your credit score for years to come, which can have long-lasting consequences. Remember that as soon as you get back on your feet, you should resume where you left off with decreasing your debt.


If you or your spouse is contributing to a retirement savings plan through work, consider reducing the contributions temporarily to add to current cash flow. Just make sure that when you exit financial-survival mode, you return to the previous savings level as soon as possible.


Reduce utility bills by setting your thermostat a few degrees warmer in summer and cooler in the winter, and make sure you turn off lights when you’re not in a room. Also save water by turning off the faucet when you brush your teeth and try to take shorter showers. Look for other ways to reduce consumption as well.


Clip coupons, but make sure that you’re only clipping for products you already buy. A 50 cent coupon for a high-end item may seem enticing until you compare prices and see that it will still cost more than a similar product with a different label. Read the "per unit" labels at the grocery — this is the best way to compare prices as products come in different sizes.


Above all, remember that this too shall pass, and concentrate on the big picture. Try not to spend money on anything unnecessary in order to set yourself up for the quickest recovery possible once things turn around. You even may find that shifting gears toward financial survival leads to thriving over the long term. My personal experience actually has been that a financial crisis always has led to a better life situation on the other side!

by -

Even though statistics show that 90 percent of women will be financially independent at some point in their adult lives, the issue of ensuring long-term financial security often takes a backseat to other priorities. As women, we all know that we SHOULD know more about the stock market, investing, banking and other financial terms, but we are too busy with our families, careers, friends and staying healthy to take the time to learn. Plus, many of us find the subject matter boring and overly technical.


With more women becoming financially independent because of careers, divorce, widowhood or the single life, it has become increasingly important that women not only find a trustworthy financial advisor or coach, but also develop a baseline of knowledge to aid them in ensuring that the advice they’re given is most appropriate for them. Just how do you find that person who will help you gain that knowledge? Below are a few of the criteria and some tips on making your choice.


The No. 1 non-negotiable factor in choosing a financial coach is trust. Referrals from close friends and family can aid in this factor, but it is important that you feel right about the choice too. This person has the potential to make or break your long-term financial success. If you don’t feel 100 percent comfortable that you can trust her, don’t hire her.


Communication is a close second when selecting your coach. Your coach should speak to you in terms that you understand, and you must feel comfortable asking questions when you are confused. In my opinion, there is no such thing as a stupid question when it comes to your money. Your advisor should not make you feel embarrassed or uneducated when you ask questions, no matter how basic. It is to her advantage that you are knowledgeable about money, as you will be better equipped to communicate your goals and concerns to her through the years.


Another factor that is of particular importance, especially to women, is a personal connection. A great advisor will take time to get to know you beyond your financial status. In order to offer personal and appropriate advice, she should have a fair idea of your values, goals and preferences. If you spend each Saturday seeking bargains on fabulous shoes, she should not be suggesting that you stop buying shoes cold turkey. A better approach would be to assist you with trimming your expenses in other areas that are less important to you so that you can continue to do what you love. Just like dieting, saving money long-term does not work when we completely cut out things that bring us pleasure and satisfaction.


Finally, it is important to determine how your prospective advisor is paid. Financial advisors that work for insurance companies, brokerage houses, asset advisory firms and banks typically require that you open an account with them in order to work with you, and their fee is tied to the amount of money you invest with them. Financial coaches, planners and certified public accountants (CPA’s) employed by accounting firms or other planning firms are more likely to charge by the hour and won’t take custody of your investments. You may also find a coach that offers a package for a flat fee. Each method has pros and cons, so how you pay your coach depends mostly on the type of service you are seeking.


Above all, if you find a coach that you think understands your goals and dreams and has your best interests in mind no matter what, then you’ve found your perfect match. Happy saving!

by -

After last year’s market meltdown, we’ve all redefined our perception of and tolerance for risk when it comes to money. As this is a financial column, the easy topic to cover would be risk as it relates to investing in the stock market. But that seems to have been adequately covered by other experts, so let’s address the role that money has in our decision-making process when it comes to taking risks in life.

 

Personally, I recently took a huge risk by quitting my job and starting my own financial coaching business. Don’t think that money wasn’t a primary consideration when weighing this decision! By implementing a tried-and-true decision-making process and despite the risk to my financial situation, I took the leap. All things considered, the risk was worth it to me.

 

Life presents us all with crossroads at various points and having a process to decide which path to take can make those crossroads less intimidating and more of an adventure. Try the following soul-searching steps the next time you are faced with a risky decision, and see if it doesn’t help you live a deeper, more fulfilling life.

 

First, take time to review wisdom from others who have taken risks. This includes books, articles, speeches and personal conversations. My favorite inspirations include George Clooney, who said, "My father gave me the best advice of my life. He said, "Whatever you do, don’t wake up at 65 years old and think about what you should have done with your life."

 

Another piece of advice comes from a birthday card I sent my younger brother that read, "20 years from now you will be more disappointed by the things you didn’t do than by the ones you did. So throw off the bowlines. Sail away from the safe harbor. Catch the trade winds in your sails. Explore. Dream. DISCOVER."

 

Next consider the following questions: What’s the worst that could happen? Does this risk have the possibility to render me homeless? What is my greatest fear? How might my life look in 10 years if I do this? If I don’t do it?

 

More often than not, we already know the final answer in our hearts. Usually we just have to face our fear and work out the details. Too often we use money as an excuse or a crutch to keep us from taking a risk to fulfill a dream. Fiscal responsibility remains important but so does remembering that money is just one tool in life.

 

Of course there is always the chance that you take your risk and fail, but I prefer to look at failure, not as the end of the journey, but as the lesson learned to start the next trip. Life is too short to stand on the sidelines just because we don’t want to risk losing money!

 

Perhaps you’re considering taking some type of risk that could affect your financial situation but can’t quite stomach the chance that you may end up broke or owing more than you can pay. It could be buying that first home, going back to school to pursue your passion, or having your teeth fixed so that you can smile with confidence. Or maybe you’ve been struggling with the idea of ending an unhealthy relationship that would mean risking financial security. These are all situations I’ve faced in my life — some I’ve pursued, others I’ve forgone.

 

Money plays a big role in all of those situations, whether you don’t have any to risk or just aren’t sure that you want to risk the money you already have. Only you truly know whether it is worth it.