Sometimes it can be difficult to save for emergencies or for retirement. While physically not demanding, the mental strain can be a hump that is hard to get over. In other words, we experience a little bit of “pain” or mental anguish if we have to physically hand over money or write a check. So how can we overcome this anguish? Automate. First, determine how much you need for an emergency. This can either be to start the fund or to replenish amounts that have been used. Generally, it’s a good idea to have 3 to 6 months of non-discretionary expenses (expenses that don’t go away if you lose your job or become disabled) set aside in an FDIC insured bank account. Some individuals may find it more comforting to have 6 to 9 months or 9 to 12 months. It’s up to you. For retirement, I recommend saving 15 […]
financial planning
6 Year End Tips for a Financially Productive 2017
As 2016 comes to a close in a few weeks and we start into 2017, here are some good tips to consider to start 2017 off with some good strategies that will hopefully become habits. If you’re not doing so already, set up your payroll deductions to save the maximum to your 401k. There’s plenty of time to your payroll allocated so your deductions start coming out on the first paycheck in January. The 2017 maximum contributions are $18,000 for those under age 50 and $24,000 for those age 50 or older. To deduct the max, simply take the number of pay periods you have annually and divide it into your maximum contribution amount. This will allow you to save the maximum amount over 2017. Consider doing the same to maximize your IRA contribution. Those limits are $5,500 (under 50) and $6,500 (over 50) respectively. Check your allowances on your […]
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Student Loans Are Not Carte Blanche
For many college bound and current college students, the arrival of the financial aid reward can seem like winning the lottery. For some students, this sum of money is more than they’ve seen (in one sitting) in their entire lifetime. The temptation to think of it as a “paycheck” rather than what it is – a liability – can often lead students to make less-than-optimal decisions when it comes to allocating those borrowed dollars. When it comes to student debt it’s helpful to think of it as just that – debt. This is money that is supposed to go towards the costs of higher education. If and when you are in the position of getting your reward money, consider the consequences of using the money to finance unnecessary purchases. Remember, this is debt. It will have to be paid back someday and with interest. When you get your financial aid […]
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What to Expect After the Election
Now that the election has come and gone I wanted to send a note on what we should expect for the next four years and beyond. Really, these are no big predictions, but at times we may tend to forget our long-term goals in the hype and excitement of short term events. Expect volatility. Volatility is the norm, not the exception. Therefore, it should come as no surprise that markets will fluctuate, gyrate and generally have many ups and downs over the next four years and beyond. Think of it this way, would we expect any higher returns on our investments if markets were always calm and stable? No. Volatility is the price (risk) we pay for expected higher returns. We can diversify and maintain focus, but volatility will never go away. Expect change. As the saying goes, the only thing that is permanent is change. Do I know what […]
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Should I Pay Off Debt or Save for Retirement?
Over the last few weeks I’ve gotten quite a few questions from individuals ready to graduate college and start embarking on their first job. As is often the case, many of these individuals have varying amounts of student debt but also understand the importance of saving for retirement. Naturally, a common question is should they pay off student loans or save for retirement. Here’s my take. As I’ve mentioned in previous posts, there are few ways to receive guaranteed returns. One of those ways is by paying down debt. This is an example of a guaranteed rate of return that is also risk free. By paying off a loan early, the interest that would have normally gone to the lender ends up in your own pocket. The good news is that the debt is retired faster, and the individual experienced zero volatility exposure compared to investing in the market. On […]
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Foresight from Experience in Planning
We can make a difference in our own lives if we make a simple change in our outlook. If we changed from a hindsight to a foresight perspective, many things about our society could improve dramatically. This foresight can help with retirement planning, marriage, and any major event in our lives. I don’t mean that we should disregard history – of course not. On the contrary, we need to use history to provide us with foresight into the potential outcomes of our choices. The experiences we’ve encountered (and our friends/families/acquaintances have experienced) can help us to predict the outcome of various choices and decisions that we make in the future. Consider these factors: The divorce rate in the U.S. has been high for a very long time, causing a great deal of heartache and expense, not only for the couple but for family and friends as well. And one of […]
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How to Tackle Debt
It can easily happen. Whether we’re trying to keep up with the Joneses or investing in our education, sometimes debt can add up quickly. The good news is that debt can be erased. However, sometimes what we know we need to do is different from actually doing it. Here’s a game plan to start chipping away at your outstanding debt. With time and persistence, we can eliminate debt and increase our net worth. Let’s start with some definitions of debt. Debt is debt, but there is some that is generally better than others. Mortgage debt isn’t considered bad debt (unless you bought more house than you can afford). Additionally, student loan debt isn’t terrible (as you’re investing in human capital), but interest rates can be higher than home debt. Vehicle debt isn’t great either. Pay cash for your vehicles. Credit card debt is bad. It’s debt that has no backing, […]
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Multiple Income Streams
This post is primarily geared toward younger individuals just starting out after college or from graduate school. However, the information can be used by anyone looking to boost income in order to increase retirement savings, pay off debt earlier or simply to put them in a better position financially. In financial planning we often talk about risk management as one of the bricks to the foundation of any solid financial plan. Generally, when we say risk management we think of auto, home, life, disability and other insurance coverage in addition to an emergency fund. Another area of “insurance” would be creating additional or multiple income streams as a hedge against losing an income source due to downsizing, termination, etc. If none of the aforementioned negative events occurs, then the extra income can be used to bolster retirement savings, reduce debt, or save extra for college. The point is that if […]
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Should You DIY Your Financial Planning?
Many individuals may consider doing their own financial planning over the course of their lives. Although financial planning is generally not too terribly difficult, to answer the title’s question, the answer should be “No.” Here are some reasons why. Get a second opinion. Even if you do it yourself, it’s wise to have another professional take a look at what you’re doing. A good financial professional will confirm good decisions you’ve made and will politely tell you if there’s a gap in your plan or if you may be making mistakes or omissions here and there. Even good financial professionals have another professional look at their plans. Be wise enough to realize you don’t know everything. Time management. Although many individuals are smart enough to learn how to do their own financial plans, many aren’t willing to take the appropriate amount of time. It takes quite a bit of time […]
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Perspective on Market Direction
From time to time we are asked about where we think the market is heading, whether or not another crash or “correction” is imminent and whether or not investing in the stock market is a wise investment. To give a little perspective on this, I want to share a story with you. In January of 1995 I was starting the second semester of my senior year in high school. Like many high school seniors, I was excited for graduation and ready for my learning to be over (oh, the ignorance!). In my senior social studies class we had an assignment. We were to pick a major, recurring news theme that we could track and report on for the entire semester. Naturally, when the time came for us to initially report on the news theme we had selected, I had completely forgotten about the assignment and the due date. In a […]
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Pregnant Men and Tattooed Aristocrats
When you read the title to this article your mind immediately processed the words as unfamiliar and not particularly logical. After all, how many pregnant men do you see and how many tattooed aristocrats do you run into? The title was actually taken from the book, Thinking, Fast and Slow by Daniel Kahneman. I’m currently in the middle of my third time through the book and it seems like each time I read it I gain valuable insight as to how our minds work and how we perceive things. Most notably, these words stuck with me as a way to inform our readers of other financial words and pairings they may encounter and to make readers aware that these word combinations will seem and are illogical. The goal is to help inform readers that should they see some of the following phrases, they should immediately realize that something doesn’t […]
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How to Take a Frugal Vacation
Vacations don’t have to be expensive. They certainly can be, but there’s no rule that dictates vacations must exceed a certain monetary threshold in order for the individual to enjoy it. Here are some ideas that readers may consider in order to take much needed vacations, but keep expenses from running out of control, the first would be considering renting a house with twiddy rentals instead of a hotel, you will see a big difference with the price at the end. Shop around for the best deals. Some simple research while sitting in front of the TV can pay huge dividends. There are many websites that offer coupons and discounts for stays at various hotel chains, bed and breakfasts, etc. Websites such as Airbnb, VRBO.com, Expedia, etc., offer visitors the ability to search out different homes or condos that individuals have for rent (Airbnb and VRBO.com) or prices on the […]
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A Small Step (and it’s free!)
Quick – can you tell me your net worth? How about the balance on your credit card (okay, cards)? Your savings account balance? For many folks (okay, face it, most of us) the answer to those questions is only available after a multi-hour session of digging through statements, online accounts, possibly tax returns, and the like. But it doesn’t have to be that way. Getting a handle on questions like this doesn’t have to cost a lot of money, when you use free account aggregation tools. One of the first tenets of sound financial planning involves an understanding of where we are right now. What is our current financial picture? What assets do we have? What liabilities do we owe? What is coming due soon? What income can we expect? Without an understanding of where we are, it’s hard to figure just how we’ll move toward our goal, be it financial independence, […]
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Forget Your New Year’s Resolutions?
Six months ago I wrote a price regarding New Year’s resolutions. I’d like to follow up to ask whether or not readers have followed through and are making good on the promises they made at the beginning of the year. If you find yourself as one of the individuals that has put together a plan of action and you’re moving forward – good for you! If not, what happened? Understandably, many individuals renege on their promises made at the beginning of the year. Many factors can be the culprit. From not having enough time, not making goals a priority or simply lacking a plan of action, many folks struggle to make their resolutions a reality. So how do we get back on track? Or better yet, how do we even start? The good news is that while making good on the resolutions does take work, the plan of action is […]
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Check Your Vitals
Whenever you go into the doctor’s office for a check-up what’s the first thing he or she usually does? The doctor checks your vital signs. Generally, this is heartbeat, blood pressure, breathing, reflexes, etc. Sometimes either the doctor or the nurse practitioner will have a questionnaire asking various questions such as number of drinks per day, whether or not you smoke, and any allergies – to name a few. Most individuals give this information without thinking twice. Most of the time, the answers we give don’t change. So why does the doctor keep asking the same questions every time we have an appointment? The answer is because if one of these answers does change (such as an irregular heartbeat or high blood pressure) this changes the potential diagnoses and outcome. This is why it’s important in your financial planning to always check your vitals. In other words, even though you […]
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5 Things to Check on Your Homeowners Policy
Just because an individual has a homeowners policy or renters insurance doesn’t mean that they are covered for everything. Sometimes individuals assume that because they have insurance, they don’t need to worry about checking into specifics. However, without understanding what may or may not be covered, in the event of a claim, it’s better to know beforehand rather than adding insult to injury and finding out there wasn’t coverage. Flood coverage. In most cases this is excluded on a homeowners policy. Coverage can be obtained separately through a broker found here. Additionally, many policies exclude water or sewer back-up. Individuals concerned about water/sewer back-up can generally get an endorsement for this coverage added to their policy. Trampolines and pools. Individuals that have a trampoline or a pool (or recently acquired these items) should notify their insurance carrier immediately. Some carriers will specifically exclude any liability claims resulting from injury or […]
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Sometimes it’s Not a Good Fit
Whether you’re the prospective client working with a financial planner or the planner working with a prospective client, sometimes for whatever reason the relationship doesn’t make sense. The purpose of this post is to help prospective clients and planners in deciding whether or not a client/planner relationship is worth pursuing or maintaining. First, let me start from the perspective of the client looking for a financial planner. Initially, as the client you’re going to want to look for some of the minimums every financial planner should be doing. The first is the CFP® designation. This means that the planner has at least a minimal amount of financial planning education and had passed a rigorous exam. Next, make sure the planner is a fiduciary. This is not optional. This means that the planner is legally required to act in your best interests always. Additionally, make sure they are fee-only. This means […]
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Information on 457(b) Plans
The 457(b) plan, sometimes known as a deferred compensation plan is a retirement plan that is generally set up by states, municipalities, colleges and universities for their employees. These plans have some similarities to their 401(k) and 403(b) counterparts, but they also have some differences that individuals with access to these plans may find advantageous. First, let’s look at the similarities. The 457(b) allows the same deferral limits as a 401(k) or 403(b). These limits for 2016 are $18,000 annually for those under age 50. For those age 50 and over, the deferral limit is $18,000 plus an additional $6,000 catch-up for a total of $24,000 annually. 457(b) plans may allow for pre-tax or Roth contributions. Individuals can choose among a variety of funds that the plan offers. At age 70 ½ the plans will require RMDs (unless still employed). At retirement or separation from service, individuals are generally allowed […]
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A Note for New Advisors
This post is for an advisor just starting out in their career. Their work could range from working for a large broker-dealer, to a small financial planning firm with a few employees. The main point of this post is to give the advisor reading it some hope and inspiration. Having had experience working for both a large broker-dealer and a small firm (here at BFP) my hope is to give some advice thoughts as the advisor shapes their career. First, you are in one of the greatest positions in your career. You have the choice of determining how you want your career path to look. Determine the path and what type of financial professional you want to be moving forward. Identify if you are a hunter or a farmer. If you decide to be a hunter, you will spend the rest of your career “going for the kill”. This means […]
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A Risk Management Checklist
Although many individuals have various risk management policies in place, sometimes those policies get brushed aside and every once in a while the dust needs to be wiped off of them and perhaps some updating needed. Here’s a checklist to consider the next time you review your risk management strategies. Auto Insurance – Review your coverage to make sure it’s still adequate. Liability limits of at least $250,000 should be the norm. Limits of $500,000 up to $1 million are better. If you drive an older car, consider raising your comp and collision deductibles or eliminating them altogether to save on premiums. Upside down on your car loan? Consider gap insurance. Better yet, don’t have a car loan. Home Insurance – Make sure your home is insured to its reconstruction cost. This is the cost to rebuild your home using today’s prices for materials, labor, etc. It is NOT the […]
Sterling Raskie, MSFS, CFP®, ChFC®
The latest in our Owner’s Manual series, A 401(k) Owner’s Manual, was published in January 2020 and is available on 
A Medicare Owner’s Manual, is updated with 2020 facts and figures. This manual is available on 
Social Security for the Suddenly Single can be found on Amazon at 
Sterling’s first book, Lose Weight Save Money, can be 
An IRA Owner’s Manual, 2nd Edition is available for purchase on Amazon. Click the link to choose the 
Jim’s book – A Social Security Owner’s Manual, is now available on Amazon. Click this link for the 
And if you’ve come here to learn about queuing waterfowl, I apologize for the confusion. You may want to discuss your question with Lester, my loyal watchduck and self-proclaimed “advisor’s advisor”.