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Financial Planning: Even for a Poor Girl
Posted by Raven on April 17th, 2008
Money chat. Yes. That’s right…I recently used this service to see if it could help me figure out where I stand, overall, with my finances. I got 68 page report which is quite comprehensive considering how damn frugal and tight I am with my cash. I refuse to hire a financial planner simply cause I can’t afford that. The $98.00 it cost me to do this was a bargain. And I know exactly where I stand with my money- I used this software to see if my ideas were anywhere near correct compared to other ideas. I’m doing a lot better than a big percentage of most people, which surprises me when I consider my lifestyle. Then again my lifestyle now is exactly why things look good down the road.
Anyway…
DIY Financial Planning: Get Your Financial Planning Report in 10 Steps
The web site and software is okay- old fashioned and not blog like at all. But hey…it’s the content that counts, right?
Ten Steps = Ten Questions
1) All about you and your spouse if you have one…basic data such as names, ages, annual income levels, state of residence, average tax rate, and number of children.
2) Investments
Pretty black and white. Although for some people it might be hard. This step is broken down into 2 sections:
a) They ask about retirement and non-retirement assets, including what you currently have, and your planned yearly contribution to each. The list includes:
* Defined contribution plan (i.e., 401k, 403b, 457 and Profit Sharing),
* Traditional and Roth IRAs,
* Roth 401k,
* Annuity,
* Taxable Investment,
* Tax-free Investment (e.g., municipals), and
* Savings
b) Assets and Liabilities (What we’re really worth!)
* Assets — House, autos, personal properties, collectibles, business, real estates, etc.
* Liabilities — Mortgage, credit cards, auto loans, personal loans, etc.
3) Retirement Benefits
Savings, IRA’s, Roth, retirement and LTC insurance. Pensions from employers.
This is where you can enter information about your pension and social security benefits. If you don’t have the info for any one step here just skip over to the next section.
4) Spending
Heh. Broken into 2 sections, one can input data from many choices about how we manage money.
a) Personal Habits
This step asks for annual living expenses, future large purchases, and special income. This was very easy for me because I keep track of EVERY damn penny I earn. I know how much I spend, daily, weekly, monthly, annually. On my mortgage. On health insurance. On my Jeep. On food. On everything.
b) Money Habits:
* Budgeting Management
* Spending Habits
* Money Tools/Technology
* Relationship
* Values
and some of my answers were:
# I use budgeting software.
# I use software to help me track investments.
# I use internet banking and bill paying.
# I would like to increase the amount I give to charities or organizations that are important to me.
5) Investments: Risk Factor
Next they want to know how you feel about investing. Are you willing to risk it all, some, a little?
* Risk tolerance level (i.e., very conservative, conservative, moderate, aggressive, and very aggressive). If you don’t know your risk tolerance level, it gives you a little quiz to help you figure it out.
* Your level of investment knowledge.
* Your preferred method of investing.
* Your investment advisor.
6) Insurance
This actually has a check box for my health insurance plan- which isn’t insurance at all but an arrangement vis contract with my doctor for services that I need over a yrs time, at a flat paid for up front rate (I don’t have health insurance!!) Other:
* Term Life Insurance
* Whole Life Insurance
* Long-term Disability Insurance
* Long-term Care Insurance
* Property and Casualty Coverage, and
* More personalization questions about insurance
7) Children’s Education
This step asks questions about your child expected college expenses (in today’s dollar), and the college savings plan that you have in place — i.e., 529, UGMA/UTMA, Coverdell, Savings, Bonds, and other.
This is difficult for me because I decided early on, as a parent, that we would not finance our daughters’ education. First off, I saw (and see even more today) too many kids not taking their education seriously. College is for partying and having fun and not learning…the current mantra of kids who don’t have any personal financial stake in their education. Second, parents have absolutely no access to their kids’ education profiles: test scores, courses, classes, you name it- it’s not your business to be in the KNOW. Yet you’re paying the bill? Bull shit. I did end up taking out a couple loans, by force of the government to cover one of my daughters’ first year college expenses.
8) Legacy < ---LOL the tag makes the smiley
Hmm. I guess it’s important. LOL, yes it is even for us poor folk. Very much so. Documents…I have them ALL; do you????
* Basic Documents — Will, Power of Attorney, Guardian named for minor children, and Letter of Instruction
* Health Care Documents — Living Will and Healthcare Power of Attorney
* Trusts — Revocable Trusts, Testamentary Trusts, and Irrevocable Trusts
9) Financial Advisors
This step asks questions about your current financial advisors and insurance agent (if any). If you don’t have an advisor or an agent (or if you are unhappy with them), you can ask for referrals through eFinPLAN. Pfft. I have neither and refuse to waste my cash on their services. I can do all what they offer without the bill thankuverymuch.
10) Assumptions
In this last step, the software asks you about the expected life expectancy of you (and your spouse if you have one), expected rate of inflation, inclusion of college expenses and expected large purchases, projected expenses as a percentage of current expenses, assumed rates of return, and increase rates of annual contributions.
That’s it. That’s enough though; it took me about an hour to input all the info- I had all my budget stuff with me; all my documents, insurances and investment infos too. After, I clicked the “Generate Your Report” then “View Your Report” and wow…I have a 68 page report that I can save, print, copy, paste, whatever. I went over it briefly (cause I didn’t have the time to do more) and it looks very comprehensive…and it appears that I am doing a lot of the right stuff.
I will be able to retire in my frugal glory, in a (completely) paid for house that is worth five to six times what I bought it for (based on inflation rates for my area, housing costs and what not)…among many other things.
The report suggested that I need to beef up my investment strategy to include more risky investments, with a smaller outlay of cash though. I didn’t know I was pretty high on the scale of risk takers, LOL. The report even offered examples of some stock options that might interest me (I’m into medical tech and drug manufacture, socially responsible firms of course)…I also read that I might want to consider decreasing the amount of money I give to charity and increase the amount I place into two of my retirement accounts. I’ll ponder it.
And the report advised me to continue saving my money in CDs, certain bonds and safe investments. Overall I am impressed with this, but still have to review it all. THEN I shall cough up the cash and hire an advisor to advise me in person and see what differences we come up with.
I’m just a poor girl who earns a shamefully small income. But I make do because I chose to be this way. With the right planning anyone can live within their means and be happy with what they have AND retire in comfort.
April 18th, 2008 at 12:33 am
We use TURBO TAX and are $ati$fied with this product Raven. Also, I cut back on some of the OT and realized that the harder I worked, Uncle $am was getting 33% of the OT money…. Hmmmm?
April 18th, 2008 at 12:37 am
PS: By recycling dental floss in Listerine, we saved money. By cutting our Pabst Blue Ribbon Beer with Listerine, we saved money.
Also, by substituting Alpo for chili in our crock-pot specialties, our guests never knew… But our pet pooch suspected!
April 18th, 2008 at 7:51 am
Oh for taxes I used Turbo Tax too! I have to because I own stocks and to hand write out ALL of my purchases and sells and capitol gains is so PITA…plus my mortgage and two daughter credits and all. Tax write offs are everywhere if you look for them, LOL…I got credit for having a phone of all things! All the seminars I attended for work gained me some credit…and so on. With TTax I can do my taxes in about an hour: I never get a return because I plan it that way. During the year if I have a capitol gain with a stock sell, I report it to the IRS immediately and pay the tax on it right there and then. I don’t wait. LOL I don’t get returns and this is excellent money planning. Better to keep that money yourself and invest it!!
The Efinplan thing is not really about taxes. Its just a way to take stock of where one stands with their money compared to what their future goals are.
April 18th, 2008 at 7:53 am
uugh!! recycle dental floss??? Hmm. darth??? BWAHAH
I do buy generic floss though from the Dollar Store.
Mouthwash does nothing to help a persons teeth- it helps with bad breath but so does baking soda which costs a lot less. LOL I should write a post with all the silly things people waste their money on that do absolutely nothing for them.
And beeah does make a great mouth wash too!!!
April 18th, 2008 at 4:00 pm
Yes, do write a post about all the silly things people waste their money on! I love it when you write about stuff like that. You and I are on the same wavelength with that kind of stuff but I ALWAYS learn something new from you.
Janette :: off to check out eFinPlan ::
April 18th, 2008 at 7:12 pm
I will Janette, when I get a decent day off. This post was written last week actually and I had it hanging for a time when I wouldn’t have time to post…so it went. LOL I have a day off next week and then the week after two days off!! Maybe then I can get to it.
Hehe work sucks. But it’s how I stay ahead. And pay my bills.
April 19th, 2008 at 1:23 am
Darth’s TOP 10 Tips on Cutting Expen$e$:
10. Floss with your loved one (12″) and use the same …?
9. Bottle of Listerine mixed with water – shaken, not stirred = two gallons?
8. Prepare double portions for meals and eat seconds / thirds the next day or two?
7. Cut beer with Listerine and water… a real buzz?
6. Polish teeth gently with Q-Tips and a little toothpaste. It removes stains easily. (I used to be a USAF Dental Tech from 1976-1982)
5. Reheat coffee and add a pinch of salt to it. Never know the difference…
4. Never shop for groceries if rushed or when hungary.
3. Substitute powdered creamer for milk, especially when milk here is $3.49 per gallon!
2. SHOWER / BATHE together with your loved one and $ave on energy…?
1. Turn down thermostats at night – ours goes down to 62 degrees and blanket up!
You’ll $ee more $ in your wallets this way.
April 19th, 2008 at 9:57 pm
darth- excellent list!! Many of those things we did…LOL!! except the beer mouthwash bwahaha. I always cooked HUGE amounts of food and froze up the extras for a rainy/lazy night/Sunday afternoon…
Powdered milk isn’t bad- my kids never minded it and we made up gallons at a time- my family went through 6 gallons a week so this saved us a lot of money.
We always and I still do turn down the heat- I use the fireplace a lot and wood stove too. The only room in my house where the heat is actually ON is the bathrooms and the room Marion was sleeping in. The fireplaces kept the house pretty toasty over this past winter…my heat bills were less than 60.00/mos- can’t beat that!
April 20th, 2008 at 4:51 am
PS:
*Dumpster diving, yardsales, flea markets, Goodwill & Salvation Army Stores?
*PBJ on bread. Hot meal: PBJ on toast?
*Lunchmeats & cheese sandwiches?
*Crystal light drinks & Gatorade. (The tap water is free!)
*Grow a VICTORY garden?
*Water your lawn at night with neighbor’s hose? ? ?
*Hunting for deer meat? Fishing?
*Swap furniture items with neighbors?
*Wear hand me downs
*Barter system?
*Make your own pizzas?
*Movie matinees are half price?
Screw keeping up with the Jone$e$!
April 20th, 2008 at 7:36 am
Toasted P & J yumm– grilled even better esp with marshmellow fluff
EVERY SINGLE liqid soap product CAN and SHOULD be diluted. EVERY single use of liquid soap is far more than really needed to do it’s intended job…this is a post in itself.
Bar soap is wasteful and causes…soap scum which requires cleaning…liquid soaps do not cause scum.
SOS type pads- a quick drying with a hair dryer after use will extend the life of these ten fold AND one can soak the dry pads in dish soap when needed.
Save your razors!! Rinse all the soap and cream off, DRY them after use. Then wipe the blades with alcohol. Store them outside the bath/shower stall area. They will last months and stay just as sharp. It’s the water that corrodes the blades, and makes them “feel” dull-
not one or two uses! Razor blades in my house last 5 months at least- and we do buy cheap ones. Ladies use hair conditioner as shaving lotion! Or even baby oil. Works better and is a lot cheaper.
April 20th, 2008 at 4:04 pm
SOS type pads – stick them in a little yogurt container (or maybe a plastic baggie?) and just toss them in the freezer! Less time consuming than the hairdryer and serves the same purpose (keeps them from rusting). :mrgreen:
April 21st, 2008 at 2:06 am
Thanks Janette & Raven for razor blades are expensive! Also, add a roll of toilet paper in the kitchen so you won’t waste paper towels like Charmin! Outdoor Secret? By diluting liquid detergent, with some shampoo and a little bleach into a gallon of water / spray bottles – bingo – you have bug deterrence and this kills the flys and mosquitos and ants – they get nuked!
CHEAPER than buying DECON in the garden center!
April 22nd, 2008 at 8:34 pm
yes darth— the “bug works” we call that. Vinegar works too- but not as good. I think it’s the bleach that does it, LOL!! Bug sprays are so outrageously expensive now. I can’t stand it…and the thought of all the chemicals I am sure they all contain…eeck.
I never used paper towels to be honest. I would buy those cheap by-the-dozen washcloths at Wal Mart and use those instead…and bleach them every other week to keep them white.
Yep…this whole topic will need it’s own thread. LOL.
April 22nd, 2008 at 9:11 pm
How funny! I use the cheap-by-the-dozen cloths from Walmart (usually in the auto section) or BigLots for most things but I have geriatric dog. A very geriatric dog. There are just some things that he does that I’d rather toss than even deal with. Paper towels do have their place.
As for showering together with your honey, I’ve never found that it actually saves hot water….maybe we’re doing it wrong.
April 22nd, 2008 at 9:12 pm
Raven, you HAVE to write a new post! This one’s comments will close soon!!!
April 24th, 2008 at 1:53 am
Janette: Try dropping the soap in the shower and playing… hockey? Even cold water eventually… warms up?
April 24th, 2008 at 11:11 am
April 28th, 2008 at 1:04 am
Speaking of hockey, since my son’s Ducks are eliminated, and my Nj Devils are too, I’m cheering for Les Canadiens…. GO HABS GO! Anybody but the Flyers? Also Raven and Jan, we shop at OLLIES and VALUE CITY… Big time savings but one has to be patient and look, for a lot of quality clothing is scattered everywhere! Went from 264 pds down to 238 and back up to 244, so the smaller sizes feel great! My goal is 230 and at 6′4” …I’ll be a lot healthier. My 900 calorie daily diet sucks but it works. Frau Vader did well at yardsales, flea markets, and Salvation Army Stores / Goodwill this weekend. WHAT A WONDERFUL COUNTRY!!!
April 28th, 2008 at 2:25 pm
I shop a lot at Beall’s Outlet (it’s Burke’s in some parts of the country) for Golf Guy. I just got Golf Guy a pair of Ping shorts 75% off + 25% off plus 15% off = .81 cents. They sell the same shorts at the country club that he works at for $60. HA! Beall’s is great but like you said, you just have to be patient and look and sometimes buy things off season.
Anyway most of my clothes comes from the second hand shop, I just call it “vintage”. :mrgreen: Our Goodwill here stinks but a new Salvation Army shop is supposed to open soon. We live in pretty decent area and the consignment shops and church thrift shops get the best stuff. I’d rather buy better quality merchandise second hand than pick up cheaply made clothes at Wal-Mart.
Ollie’s looks like our Big Lots. That place is great for cleaning supplies – 20 pack of sponges for a $1 and the like. The deals on gardening supplies are pretty good too.
April 29th, 2008 at 9:09 pm
We have several decent and clean Good Will type shops up here. And Big Lots! And Wal Mart- where I did buy my kids much of their clothes when they were little and growing faster than weeds- they never fit in the stuff long enough for it to wear out! There are several of the Dollar Shops up here too- where we have to be careful when looking for bargains. Some things just aren’t worth that dollar really.