The end of the year is fast-approaching. That means I spent a few hours yesterday looking at our finances. Due to an extra paycheck that I wasn’t expecting (it was scheduled for Friday 1/1 but that’s a holiday so it was moved to Thursday 12/31), I was able to max out my 401k. I originally expected to be a few hundred dollars short so that was a pleasant surprise. However, Mr. Savvy is on the same pay schedule as me. That meant he exceeded the max by several hundred dollars. That money went into after-tax contributions. I guess it’s done now but I would have much rather that money go into his SEP-IRA instead.

Next, I tallied up my total income for the year, including the extra paycheck. I sent an extra payment to our church online to ‘true up’ my tithe for the year. I also need to remember to take the bag of stuff in my closet to Goodwill before the year is over.

Next, I sent another $200 to my IRA. I’m nowhere near maxing that out but will before the April 15 deadline. Once I’m done contributing, I will do a Roth conversion. I also took a look at our asset allocation. There are a few tweaks to be made but there’s no rush for that. What year-end money moves are you making?

photo credit: jannemei

K.I.S.S. Keep it simple, silly. I decided that our finances have gotten much too complicated as of late. Three checking accounts and five savings accounts are just too much. As as of December 1, it will be bye-bye ING. Though I love them and have been happy with them, there’s no longer the need for them. The joint checking account will be closed and those bills will be paid from one of our credit union accounts. The two savings accounts have already been closed and the money put into the credit union account. So we’ll be down to two checking accounts and three savings accounts – maybe still a bit much, but better.

Next up on the chopping block will be ShareBuilder. As of today, I’ve sold the stock from my brokerage account and the proceeds will be put into my traditional IRA. So that account should be closed by December 1 as well. I’m also strongly considering moving my ShareBuilder Roth IRA to the brokerage where I have my traditional IRA. That will mean one less account to track and easier asset allocation.

How many accounts do you have? Do you think it’s too many? What are you doing to simplify your finances this year?

I have an international trip coming up soon as well as planning a domestic trip for early next year.  This means I’ve been spending a little more than usual.  We’ve bought two new pieces of luggage, booked airline tickets, and pre-paid lodging.  I’m also going to get a netbook this week in order to minimize the amount of stuff that I’m dragging across the globe with me.

I’ve been slacking on the finances though.  I like to re-evaluate our asset allocation twice a year.  Mid-year (the end of June) has come and gone without me doing that.  I also need to re-evaluate our budget if I’m going to come anywhere closing to maxing out the IRAs for this year.

I can see the light at the end of the tunnel though.  Things will calm down within two months and I can get back on track.  How are you guys doing with your finances? 

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photo credit: feverblue

Last year, Suze Orman and TD Ameritrade sponsored a Save Yourself promotion.  You would receive a $100 bonus for opening an IRA at TD Ameritrade and automatically funding it with at least $50/month for twelve months.  I signed up and last week, I received my bonus.  It’s nice to receive a 16% return (on the $600 total that I contributed) for doing nothing.

This year, TD Ameritrade is offering a similiar promotion.  However, this time you must open a NON-retirement account and save at least $100/month.  These terms aren’t as good as the previous offer’s but an 8% return is still nothing to sneeze at.   I’m debating signing up for this promo too.  Anyone else receive a bonus?

Go to Suze’s site to learn more.

photo credit: extremeezine

I’m all about multiple streams of income.  I don’ t like the idea of all my income being in one basket, particularly in this economic climate.  Mr. Savvy and I both work full-time.  In addition, we each have a business on the side.  We’ve been toying with the idea of rental property for a quite a while now.  However, we haven’t been able to ‘make a deal’, so to speak.

Another couple we know is heavy into real estate investing.  So we’ve decided to get serious and pick their brains.  I’m not making any promises because we have a lot going on this year (travel, furniture and home improvement) but I’d like to buy something before the year is out.

Do you have multiple streams of income?  What advice do you have for others?

Tell us a little about yourself

I am a Fee-Only independent financial advisor, a Certified Financial Planner practitioner (CFP) and a Registered Investment Advisor (RIA) registered with the State of California. I own a firm based in the San Francisco Bay Area, Curtis Financial Planning, and I have been in business for 8 years. I specialize in the finances of women, their families and their businesses.

Why did you become a financial planner?

 My previous career was in sales and marketing management in the food industry.  I gained valuable business experience and made a good, stable living but I didn’t feel like I was making much of a difference in people’s lives. I wanted to be of service as well as enjoy what I was doing.   Financial planning fits the bill for me perfectly.

What advice would you give someone interested in a career in financial planning?

When I left my old career, I was seeking freedom from corporate structure, so I decided to start out on my own.  This is probably the hardest way to build a financial planning practice – not only because you can’t share expenses with anyone, but it can be isolating.  I would recommend starting off with a partner or partners or an established firm  I would also decide what kind of planner you want to be – fee-only, fee-based or commission-based.  I am biased towards the fee-only model because I feel it has the least conflicts of interest and serves my clients well, but investigating the pros and cons of all three is a good idea.  If you do start your own firm, decide early one what how much and what type of fees you will charge for which services, and then decide which tasks you will do yourself and which tasks you want to outsource.  The key to success is not getting bogged down doing everything yourself. Identify your strengths and the let someone else do the rest.

For those who prefer the services of a professional, how do you suggest someone choose a financial planner?

As I mentioned earlier, I am biased toward the fee-only model, which means that the advisor does not earn their fees from commissions on product sales.  The best place to learn more about fee-only advisors is on the NAPFA (National Association of Personal Financial Advisors) website www.napfa.org. On this website, you can also search for a planner in your area.   There are a few steps I recommend in choosing a planner:

• Ask how they are paid
• Find out how they are licensed and if their licenses are current
• Don’t hire someone that asks you to write a check to them.  Find an advisor that uses a custodian where your money is deposited in your name.
• Check out references.
• Interview at least three planners and see if you have personal chemistry and if they listen to you.  

What are series 65 and 66? Is this something that matters when choosing a planner?

Series 65 and 66 are minimum competency examinations given to professionals with the investment industry.  Both exams are assembled by FINRA (Financial Industry Regulatory Agency).  In my opinion, it is more important that you check whether your advisor is registered with the state they live and practice in, or with the SEC (Securities Exchange Commission).  Also, choosing a planner who has achieved the Certified Financial Planner designation is a wise idea.  Fee-only NAPFA registered advisors and Certified Financial Planners are held to the highest fiduciary standards – meaning they are expected to put the clients interest first at all times in order to maintain their designation and membership.

I’ve been seeing mention of t-bills and muni bonds in the news of late, due to all the fearfulness of being in the stock market right now.   What are these and do you suggest for readers?

I can explain what T-bills and muni bonds are, but I would not presume to recommend to anyone unless I knew what their personal risk tolerance, age and financial objectives were.  But these explanations may help.

T-Bills or Treasury Bills are short term (maturities up to one year) government securities. They are very safe as they are backed by the full faith and credit of the United States Government.  Because of this federal backing, they are considered to have a risk-free rate of return.    But the returns are not high, so not always suitable for particular investors.

Muni bonds or Municipal Bonds are debt obligations of a state or local government. The funds raised may support general government needs or special projects.    They are most suitable for investors who have large tax burdens as the interest is generally exempt from federal tax.  In the case that the bond is bought by a resident of the state that issued the bond, the interest payments are also exempt from state tax. Interest payments are further exempt from local tax if they are bought by residents of the locality that issued the bond.  Depending on the issuer and project muni bonds are considered fairly safe investments and can have good returns.

What financial advice do you have for the self-employed among us?

• Separate your personal and business expenses – have a separate checking account and credit card for business and for personal.  Keep a good record of all your business expenses during the year so you are not scrambling and wasting time finding things at tax time.    
• Develop a business plan, even a simple one, and update it every year.  Make sure it includes cash flow projections so you know if you business will generate the cash you need to keep it going and pay you an income.
• Develop a support network of other self-employed people so that you don’t feel isolated and you get the support that you need. 

Last but not least, what is your favorite pf book?

Right now I am reading the updated version of Your Money Or Your Life by Vicki Robin and Joe Dominguez.  It is a book that attempts to teach people how to develop a healthy relationship with money in order to live more deliberately and meaningfully.    It will make you stop and think whenever you pull your wallet out of your pocket or your purse to buy something new.

Once again, thanks so much to Cathy for a wonderful interview!

photo credit: habi

Once again, Kiplinger’s Magazine is offering FREE retirement advice.  Today, you can call or go online (9 am – 6 pm EST) to talk with NAPFA financial planners.  Just call 1-888-919-2345 or go to www.kiplinger.com/yourretirement/jumpstart/.

photo credit: habi

Once again, Kiplinger’s Magazine is offering FREE retirement advice.  Today, you can call or go online (9 am – 6 pm EST) to talk with NAPFA financial planners.  Just call 1-888-919-2345 or go to www.kiplinger.com/yourretirement/jumpstart/.

photo credit: habi

Once again, Kiplinger’s Magazine is offering FREE retirement advice.  On January 13th and January 30th, you can call or go online (9 am – 6 pm EST) to talk with NAPFA financial planners.  Just call 1-888-919-2345 or go to www.kiplinger.com/yourretirement/jumpstart/.