Resources

Just too good to keep to ourselves

Welcome to our library. We strive to provide resources so that our clients know as much as they wish when it comes to being financially savvy. And it doesn’t stop there! We are part of a larger community – including you, wherever you may be. This is where we share content and tools that are important, fun and even inspiring, with everyone. Our resource vault will help you get smart about money, find your own motivation to move forward, and laugh and breathe a bit easier along the way.

Credit Card Habits During the Pandemic

Published in: Resources |

In our six-month reflection, we talked about how the pandemic has changed our spending behavior. For instance, we’ve noticed anecdotally that we’re spending less on travel and entertainment, understandably; instead, our discretionary income is increasingly going toward improving the creature comforts of our homes. Now, Money and Morning Consult’s new survey gives us insight into our credit card behavior with data.

Americans’ Credit Card Habits During the Pandemic

The good news is that over half of those surveyed said that they’ve put money toward a debt as a direct result of the pandemic, or plan to in the future.

But even though Americans are decreasing their balances, there’s a lot of anxiety around it; 25% of Americans said credit card debt is a source of daily stress. The high interest rates that credit cards carry is likely one of the main stressors.

With money worries on everyone’s minds, we wanted to answer common questions about credit cards: 

FAQ about Credit Cards

What is a common credit mistake?

A common mistake is relying too much on credit cards. It’s tempting to bridge any gaps between your income and expenses with a credit card. But because most cards have interest rates over 20%, if you aren’t able to pay off your balance in full every month, your debt can snowball out of control quickly.

How can people avoid relying on credit cards too much? 

If you’re on a tight budget, use them only for fixed, recurring expenses, and pay off the balance every month.

Doing this has a positive impact on the two most significant factors of your credit score: payment history and how much of your credit limit you utilize. This will get your credit into good shape should you eventually decide to buy a car or home, and won’t put you in danger of incurring a mountain of debt.

How can people recover from using their credit card too much? 

Seek credit counseling. Through close examination of your cash flow, credit card balances and interest rates, a counselor can help you identify the best strategy to handle your debt. Most credit counseling agencies are nonprofit organizations that offer free phone appointments. Find an agency near you by visiting www.nfcc.org/locator.

Can closing a credit card affect your credit score?

There are two reasons why closing your credit card can affect your credit standing.

First and foremost, one of the biggest factors on your credit score (second only to payment history) is your amount of available credit — in other words, how much you could spend until you hit your credit limit. And it’s good for your credit score to have a lot of available credit.

For example, if your credit limit is $10,000, and you typically keep your balance around $3,000, your available credit is around $7,000. If you were to pay off that balance, your available credit would increase to $10,000, and you might see your score slightly improve. However, if you close your card, you’d then be decreasing your available credit to $0 — and that will negatively impact your score.

Of course, the impact of closing one account also depends on the other open credit accounts you have. If you were to close a card that has a much lower limit compared to your other accounts, the impact on your score might be negligible. But there is another factor to consider: length of credit history. 

The age of your accounts is the next biggest factor on your credit score, and typically the longer the account history, the better it is for your score.

Let’s say you’re 50 years old, and you decide to close that old credit card that you opened back when you were 18. Unfortunately, your credit score is probably going to suffer as a result — even if you hadn’t used that card in several years — because it was one of your oldest accounts.

Keeping your credit cards open doesn’t mean you have to use them, of course. If your credit score is important to you, you can simply keep your unused credit cards somewhere safe and (more or less) forget about them. Some credit card companies may close the account if it’s been awhile since you’ve used it, so you may want to get in the habit of charging a small purchase to that card once or twice a year. But otherwise, you can stop using those cards and still benefit from the available credit they’re providing you with.

That said, your credit score isn’t everything. If the card comes with high annual fees, or if having lots of available credit makes you feel tempted to overspend, that open credit card probably does more harm than good. Closing the card might hurt your score temporarily, but in some situations, it could be better for your overall financial picture.

Financial Planning with The Humphreys Group

Want to learn more about credit card best practices? Check out Part 1 and Part 2 of our series from last year, “Mid-Year Wellness: The Credit Vs. Debit Debate.”

Gaining Control of Your Personal Finances in an Uncertain World

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Right now during this pandemic, many of us are feeling overwhelmed, stuck, powerless, out of our depth. We’re dealing with unprecedented levels of uncertainty during this COVID-19 crisis, and it can make us feel like we don’t have control over anything — at work, in our relationships, in life in general.

But we can make moves to gain more control in different facets of our lives — including our financial lives.

And one way to gain control of our financial lives is through tracking expenses and budgeting.

Expenses

Why Track Expenses?

The single most important thing you can do to improve your financial health is track your income and expenses. When we track our expenses, we become more aware of where our money goes. Are you underearning or overspending? Some of both? You can see if you’re working toward your goals or against them. Armed with this knowledge, you can make course corrections and feel more in control of your finances.

Tracking and categorizing your expenses can be tedious and daunting, so we encourage you to approach it with the mindset that it’s just data. Clarifying your income and expenses will give you the information you need to evaluate trade-offs, make informed decisions, and feel confident. There’s no secret sauce, but it all adds up to better financial outcomes.

How to Track?

Check your online bank statements — most provide expense summaries or a tracking function. You can also use an expense tracking app like Mint, You Need A Budget, or Tiller or just use paper and pen. The more frequently you check, the easier it is.

Consider dividing your expenses into categories:

  • Foundation Expenses: Expenses you can change eventually (e.g. rent/mortgage, utilities, groceries)
  • Discretionary Expenses: Expenses you can reduce quickly (e.g. concerts, movies, sports, dining out, clothes)
  • Intermittent Expenses: Expenses that don’t happen monthly; add these up and divide by 12 and set this amount aside each month in a separate account (e.g. car payments, home repairs, gifts, vacations)
  • Subsidized Expenses: Expenses that are paid by an outside source (e.g. software, work-from-home supplies, courses)

Set goals for each category so that you can monitor your progress.

Also, establish an emergency fund. We all know how medical bills and car repairs tend to happen when you least expect it. Saving for those expenses before they happen is vital to building your financial security. Borrow from this fund instead of using a credit card. Build this fund to equal more than 3 months of your Foundation Expenses.

Budgeting

Why Budget?

Budgeting allows you to make conscious choices about what is important to you — and then translate what’s important to you into measurable goals. Through budgeting, you can know if you can have it all, and if you can’t, identify trade-offs to make an informed, intentional, and conscious choice. Overall, budgeting lets you be in control of your financial life.

How to Budget?

First, find what budgeting system works best for you — whether it’s pen and paper, online worksheets, Excel, or budgeting apps. Start even if you don’t have all the answers. Schedule a time to revisit your budget and make changes as you learn more. Set short-term goals so you can celebrate your success.

Lastly, know that “done is better than perfect.” It is okay if you don’t have all the answers right away. At first you will be making estimates, but as you become more aware of your spending, you will be able to make adjustments.

Financial Planning with The Humphreys Group

During this COVID-19 crisis, there are still ways we can find control in our lives — whether it’s going for a walk without any distractions or taking a new class. With these tips on how to find control within your personal finances, we hope we’ve helped you find some peace of mind during these challenging times. Reach out to our team if you’d like to further discuss taking control of your finances and creating a financial road map to success.

How Pre-Retirees Can Build a Rewarding Retirement

Published in: Resources |

Our world looks drastically different from the days when our parents were planning for retirement. With longer life expectancies and re-visioning of later life, many people plan to keep working during retirement. In fact, a Merrill Lynch and Age Wave study, “Work in Retirement: Myths and Motivations,” found that over seven in ten pre-retirees say they want to work in retirement.

We don’t have to follow the outdated views of retirement from popular culture that if we’re rich, “we should spend our days playing golf, cruising and spoiling our grandkids,” or if we have a more modest income, “we should spend our days in front of the TV, knitting scarves and, if we are especially active, gardening.” Today, we have the freedom to create our own rules of retirement. We each get to choose which rules to break, which to adapt, and which to embrace.

The Merrill Lynch study included this diagram to show how retirement has changed:

Source: “Work in Retirement: Myths and Motivations,” A Merrill Lynch Retirement Study conducted in partnership with Age Wave

 

Creating a Fulfilling Retirement On Your Terms

So how can we build a retirement that is best for our specific situation? Here are some tips from our team:

  • For many of us, our busy work lives have simply provided the template for busy retirement lives. The “busy ethic” is alive and well in our culture. Before you fall into a familiar pattern, take a minute to be sure you are considering all possible paths. Ask whether your chosen approach is satisfying your deeper desires before forging ahead.
  • Give yourself a break! Many of us have charged hard through careers and are now (finally) more apt to stop and smell the roses. But that guilt in the back of our minds can be difficult to banish. Simply letting go of social expectations, the “shoulds,” is easier said than done. Why does it have to be a guilty pleasure? Can’t it just be a pleasure? Go easier on yourself during this transition.
  • Gain insight into the specific learning, work, and leisure activities that are especially meaningful to you. Try this exercise: Complete the following sentences quickly, filling in the blanks with the first word or words that come to mind.
    • I have always wanted to learn more about…
    • When I have free time, I most enjoy…
    • What I like most about my current job/activity is…
    • What I like least about my current job/activity is…
    • When I review my own life story or history, the learning experience that was the most meaningful or interesting to me was…
    • When I review my own life story or history, the work (paid or volunteer) experience that was the most meaningful or fulfilling to me was…
    • When I review my own life story or history, the leisure experience that was the most meaningful or enjoyable to me was…
  • Lastly, write down a list of things that get you out of bed every morning.

Retirement Planning with The Humphreys Group

If we could add an item to our clients’ collective wish list it would be this: find a new, better, less stigmatized name for retirement. Though clients have technically reached retirement, they haven’t retired. There is nothing retired about any of them! So, when our work “outside-the-home-for-pay” stops, what do we do? Do we reinvent? Redesign? Retool? Re-envision? Recreate? Reengineer? Rejuvenate? Relax?

Whatever you call it, we’d like to help you craft a fulfilling, engaging, and meaningful retirement. Reach out to The Humphreys Group today for a complimentary introductory call.

How to Shift Out of a Scarcity Mindset

Published in: Resources |

It happens to all of us: it’s 2 a.m., and you can’t fall asleep because you’re stressed and worried — about bills, about looming deadlines, etc. You feel like you’re not enough.

But then other times, sometimes the very next morning, you’re at the other end of things — grateful for the riches in your life.

As financial advisors, the question of “How much is enough?” comes up often, and while we can do the math and come up with a number, the answer is also nonnumerical. It depends on our mindset.

Self-Inventory: Scarcity, Sufficiency and Abundance

Consider a spectrum, with abundance on one end and scarcity on the other, with “enough” as the resting point somewhere in the middle. That middle point is different for each of us, of course.

This exercise will help you to assess your mindset in different facets of your life and will also help you to evaluate the degree of balance between scarcity and abundance you are now experiencing. 

Step #1: On each spectrum, indicate (with a dot, line or other notation) your current level of sufficiency in that particular area of your life. As you’re filling it out, notice how you’re evaluating and defining scarcity, sufficiency and abundance for yourself.

Step #2: Take a look. Which facets are balanced? How many are off-kilter? Are there areas that need attention? In what facets would you like to experience more sufficiency, or even abundance?

Oftentimes, cultural messages influence our mindset and convince us that we don’t have enough time, money, focus, talent — even that we ourselves are not enough. We are constantly barraged with these messages and they can be debilitating, costly, and limiting and can even have a lasting impact on our health and relationships.

Knowing when you have enough can be liberating and energizing. Lynne Twist, author of The Soul of Money, puts it this way: “When you let go of trying to get more of what you don’t really need, which is what we’re all trying to get more of, it frees up immense energy to make a difference with what you have.”

How to Shift Out of a Scarcity Mindset

It’s important to shift our mindset from a place of scarcity to one of sufficiency. Here are some tips on how to avoid falling into a scarcity mindset:

  1. First, recognize the signs of a scarcity mindset. Do you believe situations are permanent? Immediately go right to the worst-case scenario? Feel envious of others? Overindulge? Don’t feel generous with your time or money? If we believe in lack, we often manifest these thoughts and behaviors by default, and they can have a negative effect in many regards. If this sounds familiar, try to seek out your own happiness, choose gratitude over envy, focus your time on what matters the most to you, and make a conscious effort to give more of yourself, invest your time in people, and serve the greater good. 
  1. Identify what specifically is making you feel “less than.” Notice when you feel that you are coming up short and write it down. Consider the factors that led to this sense of deficiency and check them against reality and external factors that led you to feel that way. 
  1. Notice how much time your past achievements have sustained you. If your sense of satisfaction fades quickly after accomplishing something great, it likely isn’t fulfilling to you. You may want to consider channeling your energy into something more aligned with you values. 
  1. Harness social comparison syndrome. It’s easy to get caught in the “compare and despair” trap, especially with the prevalence of social media. We all experience this at some point! Acknowledge your envy without judgment. Get in touch with the aspiration underneath. Are you just using this opportunity to pull yourself down, or is this something you really want? If the latter, ask yourself what steps you might take to, for example, advance your career, or make travel plans of your own. It may take time, but setting an intention can point you in a positive direction. 
  1. Create your own definition of success. Success for one person might be securing the job as a CEO of a company, while success for another might be a full-time job with flexibility so they can get home early to take care of their kids. Measure yourself against what your definition of success is, not someone else’s. Similarly, don’t let one thing define too much of who you are. Think about your self-worth in a holistic way: Are you a good parent, sibling, friend? Do you volunteer in your community? Do you participate in a sports league every week? Apply value to all aspects of your identity, not just if you’ve achieved the traditional prototype of success. 
  1. Practice gratitude. While this always isn’t easy, choosing to be grateful is the antidote to feelings of scarcity. Take some time to reflect on the accomplishments you’re most proud of, and remember that once upon a time, they were all dreams. If you’re having trouble getting started, consider this common wisdom: “Remember when you wanted what you currently have.” 
  1. Gather your own wolfpack. We are often taught to compare ourselves to, and compete against, our peers, and especially against other women. But life is not a zero-sum game! Surround yourself with women who celebrate your success, amplify your voice, and provide support when you fall — and make sure to do the same for them.

Attend one of Our Conversation Circles

We’ve discussed the scarcity mindset and determining “how much is enough” at previous Conversation Circles. Interested in attending one of our virtual events? Let us know!

Explaining the Wealth Gap

Published in: Resources |

Despite a fair amount of progress, women still only earn about 79 cents for every dollar a man makes. Countless advocates have dedicated their time to push for policies intended to close the gender income gap, and it’s still worth fighting for — researchers say the gap likely won’t close until at least 2059.

But the income gap is not the only thing hampering women’s financial mobility. Lurking beneath it is another disparity that, in some ways, is even more alarming: the wealth gap.

We think tackling gender differences in wealth is just as important as tackling gender differences in pay, so we’re taking the first step in doing just that. Allow us to explain why it’s a myth to think that closing the income gap is all women need to achieve economic equality.

What is the Wealth Gap?

Okay, so the wealth gap exists, but what exactly are we talking about? The most recent data comes from the Federal Reserve, which revealed that in the United States, the median wealth for single women is $3,210, while single men have a median wealth of $10,150. This means women own 32 cents for every one dollar owned by men. That’s it — 32 cents. And just like the wage gap, the wealth gap is even worse for women of color. Black and Latina women own just pennies on the dollar compared to their white female peers.

This is important because, at the risk of stating the obvious, a person’s wealth — their assets (cash, investments, and real estate) minus their liabilities (credit card debt, student loans, and mortgage debt) — determines how well they withstand a financial emergency.

In fact, many economists believe that measuring wealth is a much more accurate picture of how one is doing financially because wages only indicate how much money is coming in; wealth measures how much has stayed in. When an unexpected medical bill or car repair arises, it’s wealth that we tap into — and men are able to tap into literally three times as much.

Why is the Disparity So High?

There’s no doubt that the income gap contributes to this difference in wealth, but it is not the sole reason the disparity is so high. Another significant element is single parenthood. Women are more likely to shoulder the responsibility of raising children on their own. If you have kids, you know parenthood does not come cheap. Between 2000 and 2012, child care costs increased by 24 percent and medical care costs increased by 21 percent. This happened during a time when the median income in the United States actually declined.

As a result of rising costs and lower incomes, women — particularly low-income women — are increasingly likely to take on debt to cover their expenses. JP Morgan Chase compared the accounts of men and women following a large, unexpected medical payment and found that one year after the payment was due, women experienced a 14 percent increase in their revolving credit card balance, while men experienced an increase of just 3 percent. And that was just a credit card — when looking at women’s liabilities overall, their median debt was 177 percent higher than the median debt for men. Mariko Chang, a leading researcher on the wealth gap, calls this the “debt anchor” because debt payments so clearly weigh down a person’s ability to build a financial safety net.

Lastly, the wealth gap is further exacerbated by the limited access women may have to employment benefits, government benefits, and tax breaks that facilitate wealth-building, due to their employment status.

Women are more likely to work part-time jobs, which often inhibit them from participating in 401(k) plans and accessing health insurance. In addition, women are incredibly underrepresented among the wealthiest Americans, who receive the most generous tax credits, deductions, and exemptions. The top 1 percent receive $95 billion in federal tax benefits, which is more than 26 times the bottom 20 percent, who receive $3.6 billion — and women are overrepresented in that bottom 20 percent.

What Can We Do to Fix The Wealth Gap?

It’s easy to get discouraged by all of this evidence. We understand that creating positive change may seem daunting, as the causes for the wealth gap are systemic, societal, and largely beyond our control.

There actions we can take that will help alleviate the wealth gap and give it the attention it deserves.

Check out the Consumer Financial Protection Bureau (CFPB). The CFPB is a government agency that makes sure American banks, lenders, and other financial companies treat their customers fairly. The CFPB website offers a wealth of resources and information, including guides on securing different types of loans, understanding the ins and outs of student loans, and detecting financial frauds and scams.

If this strikes a chord and aligns with your values, consider supporting a community loan or nonprofit organization that is tackling the wealth gap, such as the Northern California Community Loan Fund. This organization (and others like it) provides financial products, sound advice, and community involvement to create economic opportunities and revitalize low-income communities. 

Support your local female entrepreneurs. Use their services, buy their goods, and frequent their enterprises. In the big picture, this may seem insignificant, but it makes a world of difference to that business owner. Building a business is one of the quickest ways people accumulate wealth, and your financial support — at any dollar amount — will play a part in that.

See Robert Reich and a colleague walk through “the why’s” of the wealth gap, and explore what can be done on a policy level to reduce it. Watch the four-minute video here.

Want to learn more about the wealth gap and breaking money myths? Download our free eBook Rewriting the Rules: Telling Truths About Women and Money.

Fiscal Unequals: Finding Common Ground with Family and Friends

Published in: Resources |

What should you do when you’re invited to a trendy new restaurant that is beyond your budget? What if you’re the one who can’t afford the long weekend getaway or high-end vacation?

On the flip side, when you have more resources (perhaps significantly so), do you reach for the check more often than not? How does it work when you’re willing and able to pay more? How do you talk about it?

Both sides of the imbalance are tough. Most of us have been on both sides of the divide. Whether with our friends, family, siblings, adult children or spouses, finding balance when our checkbooks are unequal can be a challenge.

But our relationships transcend all sorts of differences and obstacles — and they can survive fiscal inequality as well.

Identifying Your Values

It’s not about the money; it’s about our underlying values. When we experience fiscal inequality, exploring what matters most is the place to start.

Finding common ground — common financial ground in this case — in a relationship requires understanding what is important to ourselves and listening carefully to understand what is important to the other person.

An Exercise

In a fiscally unequal situation, we are suggesting that we begin not by talking about money, but by reflecting upon and talking about values and identifying what is important.

Let’s go over some scenarios and how we can use our values as a starting point for navigating the situation. In each of the following scenarios, ask yourself these questions:

  1. What matters to you, and what do you think matters to the other person?
  2. How can you express your values in this situation?

We don’t have to be too rigid about it. Try to make “I” statements and try to avoid solving.

Scenario: You and your friend/partner are moving into an apartment together. One of you can afford $800 and the other only $500.  How do you manage this?

Scenario: Your friend has invited you to a destination celebration — all expenses paid. How do you manage this?

Scenario: You have invited your friend to a beach house for the weekend. Does your friend have to be a “good” guest?

Scenario: You and your friend/partner plan to travel together. One of you is high-thread count, the other has a tighter budget. How to you manage this?

Final Question: Think of someone in your life with whom you have a money relationship. Could be anything from a loan, to a friend who buys you lunch, your hairstylist, your children. If you could have a free and open conversation about money, what would you like to say to them?

When we understand what gives the other person meaning and what they value, we can develop empathy and mutual respect. We also need to be able to communicate what we care about, what is important to ourselves. We need to have a clear understanding of what gives ourselves meaning and what our values are.

Personal Power and Positional Power

There is inevitably a power dynamic between fiscal unequals. For a healthier relationship, it is critical for each partner to uncover his or her personal power, and the source of it, in contrast to perceived positional power.

Personal power is a reflection of your internal state. It comes from knowing who we are and what we stand for — what our values are.

Positional power is a reflection of your external state. It is based on external considerations of status, societal expectations, quantitative measurements like how much you own or how much you earn. Positional power is what creates the sense of inequality in a relationship. 

When you are trying to “prove” yourself based on some quantitative, or, external measure (like how much you earn or own), that may be an indication that there is some positional power dynamic going on. But when you express what is important to you, your own personal truth, you and your partner no longer have to “measure up.” This evens out the power dynamic and creates a safer, less adversarial conversation in which you can identify common values and come up with creative solutions.

Define Your Values with The Humphreys Group

The topic of fiscal inequality clearly has a financial component. But as in so many cases, it’s not about the money. It’s important to explore our values so we can better understand each other and communicate more clearly what we care about. To develop empathy and mutual respect within a relationship, we first need to have a clear understanding of what matters most to us. And, of course, to the person across the table.

It’s important to ask more questions, be more curious, and to make fewer assumptions. The other person may have a completely different set of values than we’d expect — and that’s okay. We need to put our solution mindsets on the backburner.

Want to continue the conversation about identifying our values when it comes to money? Reach out to our team today.

Why 401(k) Plans Aren’t Enough to Prepare Women for Retirement

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Contributing to a 401(k) has become the primary way most of us save for retirement, and perhaps the most important rule of thumb in finance has become “max out your 401(k) funding!”

But these plans, on their own, are woefully inadequate for financially sustaining retirees throughout their lifetime. Worse yet, they’re especially insufficient for women. We’re sorry to say it, but the conventional notion that a 401(k) plan will set up women for retirement success is a myth.

401(k) Plans, By the Numbers

When we say that 401(k) plans are inadequate, we’re not kidding. Women are 80 percent more likely than men to be impoverished at age 65 and older, and three times more likely to be living in poverty between the ages of 75 and 79.

And while common sense tells us we should counteract this by simply contributing more to our retirement accounts, well, we already are.

A recent Vanguard study found that women are 14 percent more likely to voluntarily participate in a 401(k) plan. We also save more than our male co-workers (7 to 16 percent, depending on the income level), yet still end up with significantly less in our retirement because we earn less than men. While the average male employee enjoys a 401(k) balance of $123,262, the average female employee has only $79,572.

According to Vanguard, the gap in retirement savings essentially disappears after controlling for the income gap, but unfortunately, that won’t happen anytime soon. Experts say we likely won’t see wage equality until at least 2059.

Why Women Are More Vulnerable to Financial Hardship in Retirement

Even if we did live in a perfect world, where we receive equal pay, there are a host of other reasons why women are still more vulnerable to financial hardship in retirement.

  1. Most obviously, we live longer. Life expectancy for women is currently approximately 81 years, compared to 76 years for men. That means we not only have to afford the cost of living for a longer period of time but are also burdened with much higher health care expenses, which increase with age. And because health care costs show no signs of slowing down, younger women will have an even steeper hurdle to jump.
  2. A more insidious factor endangering women’s retirement is our tendency to take on caregiving responsibilities for our families. Women make up two-thirds of all caregivers, and while some are able to balance this responsibility with maintaining their day jobs, they are often forced to take time out of the workforce. Women who quit their jobs to care for children or elderly family members lose an average of $324,000 in wages and benefits over their lifetime. Even if they decide to work part-time instead, they don’t do their retirement savings any favors — part-time employees are rarely eligible to participate in a 401(k) plan.

Even if women do “play by the rules” and diligently contribute to their 401(k) plans, the likelihood they’ll enjoy a worry-free and comfortable retirement remains slim.

Our Advice to You

While it’s easy to view women’s retirement years in bleak terms, there are some small steps we can take today that will change our outcomes for the better. 

Spend some time really visualizing what you expect retirement to look like. Where will you be living? How might your lifestyle change? What will a typical day look like? Answering these questions will inform what exactly you’re saving for — and perhaps it will motivate you to increase your contributions to achieve your goals.

Invest in a reality check. Work with a financial advisor to crunch the numbers to see if you are on track. Armed with your financial data and some well-considered assumptions, you can get a realistic idea of where you stand now and devise a plan to make the course-corrections that work best for you.

If you have access to a 401(k) plan, you should absolutely contribute, at least enough to equal your employer’s matching contributions. But it’s never too soon to start supplementing your savings with a health savings account (HSA), a traditional IRA, or a Roth IRA. If you’re self-employed, consider supplementing with a SEP IRA.

Consider obtaining long-term care insurance, especially if you have a family history that indicates you may experience health challenges later in life. Such policies can be costly, yes, but they can make a world of difference.

Want to learn more about retirement planning? Reach out to The Humphreys Group team today.

Entering Month Six of The Pandemic: A Reflection

Published in: Resources |

As we enter month six of the pandemic, it’s important to reflect on what has changed and what we’ve learned.

On an individual level, our approaches have certainly changed; things that seemed daunting in month one or two are no longer so — but they have been replaced with new challenges, and the need for new strategies.

Here are some things we’ve noticed that have changed:

  • Our spending patterns have changed, and as you would expect, many of us have had dramatic shifts away from travel and entertainment and toward improving the creature comforts of our homes.
  • For many of us, it has become easier to maintain boundaries, based on our own ideas of what we’re willing and unwilling to do, socially. We have become more straightforward, as maintaining one’s boundaries has become more socially acceptable.
  • We also feel more permission to ask questions about another person’s behavior — because that person’s behavior could affect all of us. And while it may seem easier to ask these questions without judgment, some judgment does undoubtedly remain. More than one of us has “confessed” to having done something that may have garnered a sideways glance or raised eyebrow.
  • We’re making decisions — all day, every day — that come down to a risk-reward tradeoff. Whatever we are willing to do (or not do) is based on our core beliefs and the value we place on the reward. Those valuations differ among us, leading to differences of opinion as to what behaviors are “worth it.” Who ever thought diving into the minute logistical details of getting one’s haircut could be so fascinating?

Coping with An Extended Period of Uncertainty, Loss, And Grief

There’s no getting around it, we are all struggling. It is hard to cope with such an extended period of uncertainty, loss, and grief. Whether it’s the pain of seeing your children suffer the loss of their social connections or the sadness of missing family dinners for months on end, we’re all mustering our resilience to get through this extremely challenging time. And one way we can cope is by talking about our experiences in an unvarnished and honest way.

At The Humphreys Group, we regularly host “Insights & Outcomes: Conversation Circles for Women,” a discussion series where participants have authentic conversations about personal finance beyond the numbers. If you want to attend one of our upcoming virtual events, reach out to us today.

The Divorce Gap: What it Is and How We Can Fix it

Published in: Resources |

What is the divorce gap? It’s the income inequality between spouses during the divorce process. Before, during, and after divorce, women end up worse financially. Here are a few key stats:

  • As The Atlantic writes, the main reason women suffer the brunt of divorce’s financial burdens is that during marriage, they are more likely than men to stop working in order to raise kids.
  • Divorce can cost anywhere from $8,500 to $100,000, which many women cannot afford.
  • Ellevest reports that women’s household income falls 41 percent after a divorce — which is more than twice as much as men’s. Women’s credit scores fall more, too.
  • Primary-caregiving moms end up with more expenses and less earning power, Ellevest writes.
  • Women tend to find more financial “surprises” during divorce that they weren’t aware of during the marriage, like high mortgage interest rates on the house, the size of their investment portfolio, or secret accounts.
  • According to a 2017 TD Ameritrade survey, 36 percent of divorced men said they felt financially secure versus 19 percent of divorced women.

Divorce and COVID-19

Many are predicting that there will be a surge in divorces after the COVID-19 crisis is over. (As The New York Times writes, with the unemployment rate at 10.2 percent, the U.S. entering a recession, and working moms adding “part-time teacher” to their list of child-rearing duties, circumstances have been ripe for relationships ending.)

In an Ipsos poll, nearly one in ten married or partnered people said they are likely to separate from their spouse/partner, partly due to issues related to the pandemic.

How We Can Fix Divorce Inequality?

What steps can we take so our finances are not drastically hurt from divorce? At The Humphreys Group, we always talk about the importance of women owning their financial power. One study found that 56 percent of women deferred to their spouse on investment decisions and financial planning. We need to be fully involved in money decisions, have open, honest conversations about finances, and have our own savings.

Divorce is an emotionally and financially difficult experience, and COVID-19 has made it even more so. Contact The Humphreys Group team if you’d like to continue the conversation about financial planning and owning your financial journey.

College During COVID-19: Navigating Difficult Money Conversations

Published in: Resources |

College planning can be a complicated new world for families to figure out. Now, with COVID-19 forever changing the college experience, it’s even more confusing.

Universities and colleges nationwide are all making different individual decisions about reopening. According to the New York Times, more than a quarter of U.S. colleges plan to begin fall instruction fully or mostly online, but many are still opening up their dorms.

Parents and students are having to ask themselves questions that they never thought they would: Is it safe to go back? Can our family even afford college anymore due to COVID-19–related financial strain? Should I go to community college to save money? Should I move on-campus, or stay at home and take classes remotely?

There’s no one good option. Parents and their children may even disagree on what is the best choice. At The Humphreys Group, we always emphasize the importance of having open and honest conversations about money. And so in today’s blog post, we’re sharing six tips on navigating difficult money conversations surrounding college.

Six Tips on Navigating Difficult Money Conversations About College

1. Do your research. Before having a discussion about college plans with your child, understand all the options available. Will their school offer more financial aid? Will housing costs be reduced, or will a housing credit be offered? What student loan options are available? Will their school hold their spot if they take a gap year?

2. Commit to having family financial conversations now. Set a dedicated time to have a conversation about college and finances.

3. Listen. This is a momentous time for your child. Be sure to listen to your child’s perspective, their worries, their questions, and their goals.

4. Start broadly, and then get specific. Have an open and authentic conversation; ensure everyone’s goals and values are understood. After everyone has had time and space to share their thoughts, address the specifics. Look at what financial resources are available and create a plan.

5. Continue the conversation with regular, ongoing dialogue. Family financial conversations are not one-time events. You should revisit your financial situation with your family regularly.

6. Consider outside advice. A financial advisor can be an objective third party in these conversations and help you develop a strategic, comprehensive financial plan.

College Planning with The Humphreys Group

No one expected college to look like this a year ago, but financial planning is all about planning for the unexpected. At The Humphreys Group, we welcome these challenges with a deep commitment to providing you with a comfortable, collaborative setting to explore your concerns and follow your dreams.

Our planning process has a single purpose: to manage your wealth so that you may live fully and confidently. We are devoted to seeing you thrive, both financially and personally. Reach out to us today for more information about college planning with The Humphreys Group.