Category Archives: Opinion
By Nathaniel Sillin
Sharing Money Problems with Kids
Kids are surprisingly resilient in the face of a crisis. But even so, serious family money troubles can potentially affect a young person’s home life, education and outlook on money management down the road.
While my wife and I don’t have kids, children under the age of 10 who are particularly mature – and particularly observant – often can immediately pick up on a parent’s stress over money or other issues.
How can you be honest about your finances with a child under the age of 18 without spreading confusion or stress? The American Psychological Association points out (http://www.apa.org/helpcenter/children-economy.aspx) that kids can often deal with a crisis fairly well but most aren’t yet keenly aware of tension in the household. When sharing money problems with your kids, here are a few ideas from the APA and other resources you can use:
Tell the truth, but watch how you tell it. You want to spare your child from hardship and worry, but it’s important not to say things are great when they’re clearly not. Try to explain in brief but truthful detail about what’s happening and leave time for questions. Any child, no matter how sophisticated, can become worried if his or her parents reveal extreme fear about money concerns. Keep in mind there’s a great opportunity in these conversations to understand your child’s thoughts and attitudes. Make it a kind, understanding conversation, and listen for clues.
Keep the discussion age-appropriate. Teens may be more aware of general financial circumstances because they can spot different behavior at home or because their friends’ parents might be going through similar circumstances. However, younger kids generally have less knowledge and experience to process what’s going on. Tell kids what they need to know, but don’t overload them with information.
Set an example. It may be difficult, but demonstrate grace under pressure. Be calm and reasoned. If you are looking for work, discuss that with your children and even share what that process is like. Remember, kids learn by example. If they see their parents dealing sensibly with adversity no matter how long it takes to right the ship, that’s a very important lesson. Communicate behaviors that they will need to learn if they’re going to successfully deal with money problems as adults.
Introduce or reinforce money lessons. Whatever the problem, reinforce smart spending and savings behavior no matter what the child’s age. However old they are, (http://www.practicalmoneyskills.com/EducateKids/) kids should get regular lessons in the relationship between money and the things in their life.
Make it educational. Communicate behaviors that kids will need to successfully manage money in the future. Whatever the problem, reinforce smart spending and saving behavior no matter what the child’s age. Teaching kids about money can be fun by introducing educational games. The Practical Money Skills website offers a collection of games (http://www.practicalmoneyskills.com/games/) kids can play to learn how to save money. Talk to them about important financial concepts such as budgeting – and bring them to life using real-life examples like planning an affordable family vacation or outing.
Introduce the emergency fund. One of the essential building blocks of personal finance, the emergency fund exists to protect savings and keep borrowing to a minimum. Older children might embrace the value of an emergency fund as a way to offset the financial loss of a lost bike or smartphone or some other personal item. For adults, the general rule of thumb on emergency funds is to have at least three to six months of savings on hand in case of a lost job or expensive repair. The key is to talk with the teen about the parallel financial risks in their lives that might benefit from the existence of emergency savings.
Focus on things more important than… things. Parents can use a tough financial stretch to focus on the positive, such as time spent enjoying family, friends and pets, which doesn’t cost much at all. Good health and healthy behaviors are essential elements of correcting problems, overcoming tough times and living a full life. In short, use this moment in time to help your child put money in the proper perspective.
Bottom line: A money crisis can truly test the strength of a family. Should you find yourself in a financial bind, use it to teach your kids some very important money lessons.
By Nathaniel Sillin
Making Phased Retirement Work for You
Phased retirement – a catchall term that describes a variety of part-time and reduced-hour work arrangements before leaving an employer for good – is gaining steam. But before you sign on, it’s important to understand how “phasing out” may affect your long-term finances.
Washington is leading the way. The federal government authorized the move for its own employees several years ago and began accepting applications in late 2014 from workers aged 55 and up with a desire to switch to half-time employment in exchange for receiving half their salary and annuity.
For employees with a long-term view, phased retirement can offer significant benefits, but it requires due diligence and planning. Among the advantages, phased retirement means that there doesn’t need to be a hard stop on a successful career. In fact, a 2014 study (http://newsroom.bankofamerica.com/press-releases/global-wealth-and-investment-management/merrill-lynch-study-finds-72-percent-people-o) by Merrill Lynch in partnership with Age Wave said that 72 percent of pre-retirees over the age of 50 report that their ideal retirement will include working “often in new, more flexible and fulfilling ways.” The study also noted that 47 percent of current retirees were already working or planning to work during their retirement years.
If your company is talking about phased retirement or may do so in the future, here are some key questions to consider:
What exactly do you want to phase into? For some workers, retirement really will mean a classic vision of travel and leisure leading into old age. But for others, the picture may be different. Some retirees will want to work and some retirees will have to work. Such decisions will summon a host of personal finance and tax issues based on your personal situation – read heavily and consult qualified experts before you make a decision.
What options will my employer offer over time? While the federal government is in the lead with phased retirement, most private employers are moving at a slower pace. This gives you time to plan. For example, in a 2013 benefits study, the Society for Human Resource Management noted that only 6 percent of employers had a formal phased retirement program that provided a reduced schedule and/or responsibilities prior to full retirement. Watch how your employer’s plan evolves and ask questions.
Phased or not, do you have a retirement plan in place? The decision to make a full or transitional exit from one’s employer should come after years of saving and investing both at home and at work. Years before deciding how you want to leave your career, talk to qualified retirement experts about your personal financial circumstances and what you want to do in the next phase of your life. If it’s a new career, volunteer work or full retirement, develop a plan first.
Have you talked to your senior colleagues? There’s nothing like direct advice from individuals closer to retirement to help you with your own set of pros and cons. Even if there’s no phased retirement program at your organization right now, it’s still worth talking about retirement preparation with senior colleagues willing to share what they’re doing. Also, start your own retirement planning in earnest with qualified retirement and tax experts.
How will phased retirement affect your overall benefits? If you’re working at a lower salary level at the end of your career, ask how that might affect your future retirement benefits. Make a list of all the benefits and perks you now receive as a current full-time employee and investigate how every single one could be affected by phased retirement. And if you leave the company permanently before qualifying for Medicare, know how you’ll pay for health insurance. This is a particularly important issue to discuss with a qualified financial or tax advisor.
Bottom line: Phased retirement can offer the opportunity to adjust to full-time retirement or set up a new career once you finally leave your current employer. However, before you leap, fully investigate how such a transition will affect your overall finances and future retirement benefits.
It’s likely your doctor has traded in a clipboard for a laptop. It’s also possible your doctor’s office and insurer have asked you to sign up for a patient portal, perhaps to pay your bills or make appointments online. Patient portals are ultimately a way to allow patients to interact and communicate with their health care providers online.
Some of the things you can do on a physician patient portal include: Book and keep track of appointments; Access and view lab results; Request prescription refills; View your personal health record; Receive health reminders from your physician; and view and pay billing statements. Insurer patient portals allow you to: Check claims and know if they’ve been paid; see if a procedure is covered; check the prices of your prescriptions and access member discounts for products or services.
Still not convinced? If your doctor’s office or insurer has a patient portal, here are a few more reasons you should give it a try:
BE MORE INFORMED. Having access to your health data whenever you want can help you make sure you’re getting the right care at the right time. Particularly if you have a chronic disease, such as diabetes, asthma or heart disease, it may be easier when doctors and patients have access to the same information. A recent study in the New England Journal of Medicine showed that people with diabetes seen by doctors who used electronic health records (as opposed to paper records) were 35 percent more likely to get all the recommended screening measures, such as eye exams and blood sugar tests. What’s more, they were 15 percent more likely to have favorable outcomes on those measures.
CONVENIENCE. A patient portal can provide you with the information you need when it’s convenient for you. For example, you can look up your lab results or check your coverage at any time. Patient portals allow you to stay in touch more frequently and with greater ease.
ACCURACY. Studies show patients remember less than half of what they’re told in the office or on the phone. Electronic health records document your office visits, diagnoses and more, so everyone is on the same page.
FASTER FEEDBACK. Government guidelines require lab results to be posted on the patient portal within 96 hours of the doctor’s office receiving them. This means no more waiting for a phone call or a letter.
ENHANCES TRUST. Having open records and doctors’ notes can enhance trust between patients and doctors. While it may seem impersonal, online communication can actually improve your relationship with your doctor.
Ask your physician for information about if they have a patient portal and how you can access your information. Wellmark Blue Cross and Blue Shield members have access to their patient portal once they register at Wellmark.com.
By Nathaniel Sillin
Keeping Your New Year’s Financial Resolutions
Whether you’re talking about diet, exercise or money, keeping New Year’s resolutions is challenging. A University of Scranton researcher noted that “weight loss” is the current reigning resolution, followed by “improve finances” at No. 2.
And while the study (https://www.sharecare.com/health/healthy-new-years-resolutions/article/the-resolution-solution) showed that roughly 40-46 percent were successful in their specific goal at the six-month mark, more than half gave up.
Your personal finances need more dedication than that.
If you want to add some fairly easy money resolutions that can help your finances overall, consider the following:
Make your first budget or do a better job of reviewing the one you have. A 2013 Gallup survey reported that only one-third of Americans actually prepare a detailed household budget. Make your first resolution to create or review your household budget (http://www.practicalmoneyskills.com/budgeting) so you know where your finances stand at all times.
Budgeting involves day-to-day tracking of finances, but having a quick way to determine your net worth (http://www.practicalmoneyskills.com/worth) – your assets minus your liabilities – offers the biggest picture of how you’re doing and what next steps you might take to improve your circumstances. Make this calculation an annual kickoff to the New Year.
Having an emergency fund means you’re always ready for the unexpected. The average emergency fund generally covers three-to-six months of daily expenses – yours could be more or less. Keep in mind that the primary purpose of an emergency fund is to keep you away from savings when unexpected expenses happen.
Depending on your comfort level with all things digital, virtually every aspect of your financial life can be managed online or with computer-based software. From setting up a basic paper or online calendar to track pay dates, bill due dates and deposit dates for savings and investments, a daily series of reminders and action items will keep your money issues on time and on track.
Recommit to retirement. If you’re employed or self-employed, here’s how to make a retirement savings resolution stick. First, make sure you’re signed up for a 401(k), 403(b) or 457 plan at work or a corresponding SEP-IRA, self-directed 401(k) or other self-employment retirement plan that fits your tax and financial situation. Then check what your 2016 maximum contribution (www.irs.gov) is for your respective plan. Finally, through budgeting or a plan to bring in more income, determine how you can come as close to your maximum contribution as possible for the coming year. And of course, don’t forget about Traditional or Roth IRAs (https://www.irs.gov/Retirement-Plans/Traditional-and-Roth-IRAs) that you can contribute to independently of work-based plans. All of these options can improve your retirement prospects while saving you considerable money on taxes.
Review your non-retirement benefits and insurance. For most employed and self-employed people, open enrollment for health and other company benefits wrapped up before year-end. But that doesn’t mean you can’t make notes at any point in the year for possible changes and improvements to your health insurance and related tax-advantaged accounts. The same goes for reviewing your personal home, auto, life and disability coverage for potential savings and/or better coverage. Qualified advisors can help you review these choices.
Find more money to save. Whether it’s adjusting what you spend, paying off expenses or finding ways to bring in more income, saving more is one of the best financial objectives there is. The first step is to track and set spending limits – those limits will help you reset or eliminate expenses that are standing in the way of your goals.
Bottom line: Making New Year’s resolutions always sounds like a good idea at the time, but keeping them requires determination, study and focus. This year, build the kind of money habits that position you for success.
By Rep. Dean Fisher
Over the next few weeks and months there will be lots of discussion on the budget, and no doubt lots of media coverage. I feel it is important to make sure my constituents understand the issues fully, instead of just being fed the sound bites that often dominate the media coverage.
One area of concern is protecting our cash reserves and economic emergency fund from being appropriated for ongoing expenses. These funds contain $718 million, three-fourths of that is for managing cash flow, and one-fourth of that is for when cash is needed immediately for emergencies, such as natural disasters or economic emergencies. It is tempting for some legislators to want to look to these funds when revenue is not growing as fast as they would like. However, tapping into these funds creates serious trouble in the following years. First, those reserve funds are not a source of revenue, they are “savings.” Because state law requires the reserve fund to be replenished, a scenario where the amount taken one year results in the need to double that amount the next. Please rest assured that I will not support these kinds of budgetary shenanigans.
Safe At Home Act
The Safe At Home act that I sponsored last year has been implemented and participants were able to register for the program as of January 1st. Safe At Home creates an address confidentiality program within the Secretary of State office for victims of domestic violence, sexual abuse, stalking, human trafficking and child sexual abuse crimes. To date, 14 participants have signed up, and we expect that number to continue to climb. I have filed a bill to revise the Safe At Home Act that seeks to restrict when a court can order the program participant to disclose their physical address. It also specifies that persons in other states who are participants in address confidentiality programs will receive the same protections in Iowa courts. This is in response to an actual case where an ex-husband used the court to obtain the victim’s new address in another state she had fled to and resumed harassing her in that state.
I would love to have you come down to the Capitol any Monday through Thursday to visit, discuss your concerns with me, and take a tour of this beautiful building. It is one of Iowa’s treasures. We can even arrange a tour for you up to the capitol cupola on top of the dome!
As always, please feel free to contact me at firstname.lastname@example.org or 641-750-3594.