I rarely reviewed medical or dental coverage plans when joining a new firm (unless you consider ‘whatevah‘ as a valid acknowledgment to such material).
Today I attend a benefits fair at my husband’s work. In preparation, I’ve been humbled to learn just how much there’s to learn on our coverage — stuff like:
What percentage is covered for out-of-network consults?
Where/how should reimbursements be submitted?
What’s that flex spending plan all about?
Does the employer offer health care benefits for retired employees?
More from:
APA outlines apt questions to ask your company’s benefits team or HR staff, even sensitive ones I didn’t first consider;
For gay/lesbian domestic partners, this looked insightful for benefits & legal protections;
We learned a lot from our own cycles of incur-credit-debt-yet-not-build-savings. We still have credit card debt (from mis-calculating last year’s tax payment); yet we’ve for the first time built a cash kitty, four months of expenses, with plans to secure one year’s worth since we function on a single steady income.
It’s tough changing one’s perception of what is or is not a valuable financial habit or philosophy. I heard throughout life about debt-is-bad-pay-it-off but not as much insistence on building cash reserves aka rainy day protection. I realize saving philosophies have certainly been around for ages; cash reserves (and truly reserving them for emergencies vs a Mets game…) — just weren’t emphasized as much in my personal community.
After six years of marriage, four cats, and $6k in pet surgeries it became clear viewing a credit card as an emergency cash plan lacked….prudence. Emotionally we couldn’t afford to lose the various cats & financially, we decided we couldn’t afford to personally finance continual debt cycles.
Thus dedication to building cash reserves began as did researching pet insurance(!).
More from:
ASPCA offers diverse pet insurance plans & good customer service;
All Financial Matters says it well: Emergencies will come whether we are prepared for them or not.
During the first years of marriage, our conversations on spending splurges went down like this:
The husband likes books - admirably. And sure I’m addicted to eating out with friends & travel.
With books though, Sean’s a read-it-once-learn-it type of brain & is a strong visual learner. Books are his friend. It’s a learning style that differs heartily from my own. I love a good Edith Wharton novel & a few graphs from business books. But I just did not appreciate his relationship with books as they related to his well being.
But more than that, his book buying irked me because deep down, I knew our family finances were shaky with our unclear financial philosophy convincingly…unclear.
Once we took actionable steps toward more stability, my emotional freak-outs eased considerably. It helps that my husband owns a really laid-back demeanor toward home finances a.k.a. “That sounds good baby!” — his reply to many suggestions tossed out for discussion.
Our facilitating questions on the topic:
Do we agree that saving for present & future is worth it? …get mutual buy in first; establish tactics later.
In what ways does money affect your sense of self? …sounds corny but ask. Do they want 100% control? Do they care if you do? Do you feel like a ‘less-than man or woman’ with someone else handling the bills? In what ways do you crave financial autonomy or partnership?
How do you like to play? e.g. books, tech, travel, hobbies
If saving & investing for your overall health is the driving goal, what are you/we willing to financially modify - or not - toward the play stuff?
I’ve heard of spouses going out of town for the weekend with the other spouse staying home. Upon return, there’s a newly purchased car in the driveway. That actually happened with my parents. Yikes that was a cherished family moment in Mustang, Oklahoma; and looking back - there were power struggles & self images at work, all tied up with money.
If at all possible, make all that overt…with some flexible conversation on what’s the healthiest, happiest shared value on money that you can agree on.
Bottom line, if all this becomes open, then spending becomes all the more fun & relaxed. …since you’ve as a team asserted responsibility toward your driving financial goal.
The more I read & talk with planners & analyze my family’s habits — the more this proves true:
controlled spending habits can hugely mobilize one’s savings.
It ain’t nothin’ to shake a stick at.
But I love AnnTaylor LOFT!
I would do well to resist that clothing splurge & invest the cash instead.
So I just opened up my family’s first cd with the would-be splurge dough (5.15%, 6 months, ING). ING offers strong security protocols & fine, reliable customer service. And as Michael Fischer expertly explains at his videoblog, the compounding examples tell it well.
…baby steps right?
It’s clear as our/my habits improve that increased savings power is inevitable (recognizing sovereignty over one’s choices looks exciting).
We see Neo (pre-freedom) in a tech dance club with Trinity leaning over, whispering in his ear:
It’s not the answer but the question, it’s the question that drives you…
And the same the-question-must-drive-you theory applies when researching how financial planners make their money. I find it central to seeing if my best interests govern their decisions -vs- their eyes for profit.
commissions? commissions on which products? salary? fee-based? a percentage of your assets?
But what about chump change?
One must ask the fee question to be clear on a planner’s loyalty. Do they get a percentage for select products? If so - how compatible are those products with your needs?
Liz Pulliam Weston with MSN Money outlines clear, crisp questioning for potential financial planners, and the compensation point.
To avoid a good ‘ole head spin on this topic, I find knowing how to verify planners’ answers is key. Frankly compensation can range from fee-only per product sold or an annual fee based on your assets or wrap fees where management fees + annual percentages + fee-based amounts are rolled into one charge or hourly charges or annual retainers.
It’s plenty if not too prickly to process if it’s not your profession. (alliteration addiction…)
So ask to at least learn how your assets & purchases impact their fees, and therefore their judgment. And if the potential planner admits to offering limited services with limited products — I vote walking out the door. They would be admitting to having limited capacity to advise your overall financial reality.
To reiterate, knowing how and where to cross-check answers is useful (and empowering to the layman). Weston says it well, referencing where to cross-check your potential planners’ answers to the payment question:
Ask — and then do more research. If your planner is a registered investment adviser (RIA), ask for a copy of his form ADV, Parts I and II. This document, which must be filed with the Securities and Exchange Commission, outlines whether the adviser accepts fees, commissions or both. If the adviser’s practice is too small to be regulated by the SEC, ask for the state equivalent of this form.
UPDATE:
To cross-check their licenses, check these registered authorities:
One example here re: learning their client complaints policy:
I’m meeting with different planners and comparing their advice.
I liked last week’s planner, his personality & warmth. But after considering Kiplinger’s points to consider, I wouldn’t trust him with significant decisions. I’m not sure why except he seemed almost too warm and fuzzy. Professional, yes; dressed in fine business attire, yes.
But he didn’t offer that clear, decisive tone aka “Jill I want you to consider, this, this, and this.” Possibly this would emerge after that initial meeting. I led the meeting, which is what I prefer. So - ha - maybe I didn’t give him a chance to be decisive. And Russell Bailyn makes an intriguing point about emotions, financial planning, & cookie cutter advice.
More questions to ask per Kiplinger’s:
what process do you follow to identify goals and evaluate performance?
what are your sources of research and information?
what’s your fee structure?
And what you should be very honest about, even if your gut says they’d be fun for beers: are they candid & intelligent?
That really made an impact on my financial thinking.
As have articles like this re: income growth rates & class. The article talks broadly on income, class, & happiness in the US yet these stats are what got me:
According to Census figures, the average inflation-adjusted income in the top quintile of American earners increased 22% between 1993 and 2003. Incomes in the middle quintile rose 17% on average, while the incomes in the bottom quintile increased 13%. Over the 30 years prior to 2003, top-quintile earners saw their real incomes increase by two-thirds, versus a quarter for those in the middle quintile and a fifth among the bottom earners.
This is telling & worth looking at. The issue of earning ability in the states has its place at the financial planning table.
Yet my expertise is not in that arena; it’s in my family’s ability to learn & recover from mindless spending habits. In 2006, we spent over $1k in banking fees (vs using our bank’s ATM exclusively), $2k toward retirement savings, and wait for it, wait for it, $11k in eating out + entertainment.
Puke.
Puke.
Puke with me.
And that’s during my sales commission manager job where many times I wouldn’t submit for reimbursement on those client lunches or staff rewards to protect those tracked margins. Imagine what the numbers would be if I had tracked that? I’d still be numb with liquor.
So cheers to new habits, conscious spending, all sprinkled with joy in between.
And may we all take time to cook cuz oh mercy — that habit really impacts the bottom line.
10 second video: how much his clients overspend per a DC-area financial planner
What drives that spending itch?
In a meeting with a financial planner this week, I asked him how much a higher income impacted one’s success at saving.
He then shared this story that knocked my socks off:
He generically referenced two of his clients — one was a grounds keeper and one was a leader at a university. Their retirement financials were similar; each wanted to retire in a year. The grounds keeper was overjoyed at the financial planner’s feedback: due to his conservative spending and aggressive saving habits, the grounds keeper could live comfortably on Social Security, with his retirement savings as buffer & as help for his grandchildren’s college costs. Yet the university leader, with a considerably higher income, agonized over his retirement nest egg. The financial planner said due to his over zealous spending habits & reluctant savings plan, he (the university leader) would not be able to maintain his living standard in retirement years. Or the other prospect was he could continue working and cut back costs.
…I promptly refrained from a Starbuck’s visit walking home.
Over 50% of American retirees will be wholly dependent on their relatives & welfare subsidies per Richard Paul Evans.
Regarding one’s parents, what are effective ways to plan for this? Surely it’s a matter of good communications with one’s folks, education on potential needs like senior healthcare, and taking incremental steps to prepare (and living within one’s means).
I’d rather have these potentially awkward talks with my parents now - and really enjoy our time on Earth (vs having high-octane financial stress at times when you’d rather be an emotional companion with them).