Discipline Matters With Money

The financial status for most working Americans in 2020 can be summed up with one word, “confidence.” But whoa Nelly, not so fast. Yes, employment is at an all time high and earnings are up. However, a study by Northwestern Mutual found that nearly a third of Americans over 18 are within three paychecks of needing to either borrow money or skip paying a few bills.

The study also reports that 22% of us have less than $5,000 saved for retirement and will need to work past retirement age in order to maintain their lifestyle. So are Americans financially overconfident? It would appear so.

So how can we buckle down and build a healthy emergency fund and save for retirement?

  1. Create a budget. I know, it sounds dreary and boring, but reportedly we spend 100x more time watching TV or scrolling our mobile devices than we do working on personal finances. Consider using that device to effortlessly manage your finances with a free app like Mint to see all your bills and bank accounts at a glance, create a budget, and even have access to your credit score.
  2. Pay yourself before you pay your creditors. Set up automatic deposits that move money into savings each month. These deposits will help you avoid spending money frivolously and quickly build your savings and emergency fund.

The size of your emergency fund and retirement savings depends on your lifestyle, monthly costs, income, and dependents. The rule of thumb is to put away from 3 to 6 months’ worth of expenses for emergencies like car repairs, medical bills, job loss, or temporary disability.

Retirement funds vary by age, but having 2x your annual salary by age 40, 4x by age 50, and 6x by age 60 is recommended for your 401(k). If you retire at 67, it recommended to have at least $600,000 saved. 

Many people simply plan to continue working after retirement age and to bank on being in good health and not suffering any layoffs or business failures. The better alternative is to start or increase savings as early as possible. If you never see the money in your wallet or checking account, you won’t miss it.

DL MoneyMatters provides accounting and daily money management services and does not  give investment advice. If you need a trusted financial or investment advisor, we may be able to provide a reference.

Alzheimer’s & Power of Attorney

The number of Americans living with Alzheimer’s disease is on the rise. According to the Alzheimer’s Association report for 2019, an estimated 5.8 million Americans of all ages are living with Alzheimer’s and are being cared for by more than 16 million family members. Maybe one of those family members is you!

They project that in thirty years, the number of Alzheimer’s sufferers will reach nearly 14 million.

Children of aging parents who suspect a parent is in the early stages of Alzheimer’s, or have  a parent already diagnosed with the disease, should consider a Power of Attorney (POA).

A POA gives a family member the legal right to step in and make decisions that a parent with an Alzheimer’s or dementia diagnosis is unable to make themselves, or doesn’t want to. 

There are various, even urgent, situations when having a POA is extremely important. For instance, you may need to:

  • Find a trusted money manager to handle day-to-day bill paying and the daily money management of bills, medical and insurance statements, tax preparation, and other personal financial tasks.
  • Act as family spokesperson regarding medical appointments, surgery, and doctor appointments.
  • Take care of things at home if your parents or loved one is still healthy enough to travel in retirement, or at any time they are away from their home.

We hope you will consider us if Daily Money Management is a concern. We are experienced, trusted, and a member of AADMM, the American Association of Daily Money Managers.

Senior Scams In a Modern World

Baby Boomers are getting older and smarter everyday. Those born in the years following World War II represent about 23% of today’s U.S. population—around 74 million Americans. Scammers love baby boomers! But you can outsmart them.

Newsweek once published an article entitled “Babies Mean Business” and they were right. As a group, Baby Boomers were wealthier, more active and more physically fit than any preceding generation; they were the first to grow up genuinely expecting the world to improve with time.

The post-war economic boom did create endless opportunities for this young generation to have a well-paying job or open their own business. The problem today is that the crooks of the world know where the money is and are constantly cooking up scams to get at it.

NCOA is the National Council on Aging. Their goal is to improve the lives of older adults by providing information to make them smarter about the signs of elder abuse, live healthier lives, and have economic security—including money management. See their Top Ten list of scams targeting seniors in our modern world.

If you skip the link, at least read #10: The grandparent scam…

The grandparent scam is so simple and so devious because it uses one of older adults’ most reliable assets, their hearts.

Scammers will place a call to an older person and when the mark picks up, they will say something along the lines of: “Hi Grandma, do you know who this is?” When the unsuspecting grandparent guesses the name of the grandchild the scammer most sounds like, the scammer has established a fake identity without having done a lick of background research.

Once “in,” the fake grandchild will usually ask for money to solve some unexpected financial problem (overdue rent, payment for car repairs, etc.), to be paid via Western Union or MoneyGram, which don’t always require identification to collect. At the same time, the scam artist will beg the grandparent “please don’t tell my parents, they would kill me.”

While the sums from such a scam are likely to be in the hundreds, the very fact that no research is needed makes this a scam that can be perpetrated over and over at very little cost to the scammer.

We at DLMoneyMatters care deeply about seniors. Read why here. We provide daily money management for seniors, children of aging parents, family trusts, executives and entrepreneurs, and attorneys and accountants who outsource these services. Call us for a personal quote. (513) 322-1036.