Don ‘t Leave Finances to Chance: Getting Organized and Centralized - Episode 5

Finances are a part of everyday life and understanding your own financial picture is an important,attainable, and empowering skill. Managing your finances - whether individually or with a spouse - is a responsibility for all of us, and it can be fun ... Yes, fun! Learn how to organize and centralize your finances to enjoy them today and prepare for needs in the future. They would love an email about their show at thriversarekind@gmail.com

Transcript

Speaker 0:03

Welcome to episode five of the Thrive at 65 Cup Podcast. I am Beatrix Kind. Yep, my name is B. Yes, B kind. Thank you for listening to us, and we plan to make it worth your while today.

Speaker 1 0:18

And I'm Paige, Paige Turner, encouraging everyone to embrace the next page in the new chapters of life.

Speaker 0:25

Now, as you may remember, Paige and I have been friends since second grade. We have slightly passed the age of 60, and we want to share thoughts, laughter, possible challenges, and solutions as we tap dance into the later decades.

Speaker 1 0:42

And we're determined to continue to enjoy life. If we have to make a few changes along the way, we can do that better together. Now, today's topic is don't leave finances to chance. Getting organized and centralized.

Speaker 0:56

Now, before that, we want to start out by saying that we would love an email from you telling us what you like, what you're thinking, kind of anything, so that we can make sure we are hitting topics that interest you.

Speaker 1 1:12

Yes, so I'm going to share our email up front. It is thriversarekind @gmail.com, and that's spelled thriversarekind@ gmail.com. No spaces, no caps. Please don't be shy and don't think, oh, my email isn't worth sending. It is because we want to read it, we want to hear from you, and we want to develop a community with our listeners so we can all benefit by sharing our thoughts together.

Speaker 1:42

Yes, we definitely want to hear from you. Now, today, as we said, we are discussing don't leave finances to chance. Now, this title can sound either boring or scary. Either way, we plan to make it educational and fun.

Speaker 1 2:00

And if we start out and you think, oh, this really isn't for me, that's no problem. But hopefully, there are some items that will interest you or at least be really good reminders. And we promised to keep it to around 30 minutes.

Speaker 2:13

I was surprised that while I was researching and double-checking some of this information, I myself learned some new things. I did not know exactly where our insurance papers were stored, for example. Ha! This is foreshadowing of things to come in this podcast. We will be talking about two main areas of financial management: budgets and important documentation or records. Now, the budget will help you know where your money is going. You may be surprised, and organizing your important records in case of a sudden change in circumstance. Now we know you can do this, it just may take a little time.

Speaker 1 2:54

Yes, good stewardship pays great dividends. Whether you're single or married, make sure you know all about your financial profile, which is what you own, what you owe, and what you have saved. It's really as simple as that. And if you haven't taken time to learn about it, it's important in this area of your life. Please don't wait any longer and don't leave it up to someone else, even if that someone else is a wonderful spouse or a trusted advisor.

Speaker 3:22

Yes, I have a friend whose husband does all the finances, and that's great. However, when he had a health scare, she had to step in and pay the bills and take care of them. But she didn't even know the password to get into the computer for all the bills, etc. So it was very, very stressful for her. Now we do not want that for you.

Speaker 1 3:44

That's right. We've all heard the advice to get our finances in order, but it is a project we often put off. Or maybe we have a few things in place, but we haven't revisited the topic for a few years. Why do we do this?

Speaker 3:57

Because it's a pain in the neck to do. I would much rather be out walking, having lunch with friends. Oh, I can go on and on. But unfortunately, we all need to be informed.

Speaker 1 4:10

Think of it this way: having a thorough understanding of your finances and keeping your records in good order is a kindness to the family or friends who will be responsible to sort through them should anything happen. And it will allow you to make better decisions about how you want to use your financial resources right now.

Speaker 4:27

That is so true. And like my friend, if you aren't handling the finances in your family and circumstances change, you do not want to be scrambling around trying to find a trail of information during a crisis.

Speaker 1 4:42

You know, it's really fascinating to me, and you may not be aware of this, but women couldn't even open their own bank account until the late 1960s. And on top of that, we were required to have a male cosigner on a credit card until 1975. Now, with today's hard-fought financial independence, we want to follow through with fiscal responsibility.

Speaker 5:05

You know, that is terrible. I think of our moms with that story. My mom was smart, and to think she couldn't even get a credit card until she was over age 50 is unbelievable. I really appreciate the women who fought for us in the past so that we can have the rights that we do have. Now, if some of you are just starting out on your financial journey, let me start with ask questions. Do not be afraid of what you don't know and don't think it makes you look dumb. Lots of people don't know and are intimidated to ask. Trust us, you will feel empowered when you have a clear picture of where you stand financially. And the best part, if you don't like that picture, you have the time to improve it.

Speaker 1 5:52

Let's face it, most of the conversation at our age is about getting finances in order just in case, meaning in case of illness or crisis.

Speaker 6:02

But in reality, maybe you want to make some home improvements and you're just not sure what you can really afford. And it ends up after you go through this, you have more available funds than you thought. That patio you were going to fix up is going to be even better. Think of all the good things you may find out.

Speaker 1 6:23

We want to first focus on just simple organization. I think we all have a general knowledge of our finances because the bills are paid and we have accounts, hopefully some savings. We know where the house deed or car title is kept, but that's really not enough. How can you fully manage your resources if you keep everything just general?

Speaker 6:42

Interestingly, when we started this, as I said earlier, about documents, I only had a good idea where our house deed was kept. So I double checked to make sure it was where I thought it was. Now, the most important place to start this financial journey is a budget, which to keep it easy is how much money do you get each month, that's your income, how much money do you spend, those are your expenses, and how much money is left over afterwards for extra spending. That is your cash flow, which can be positive, yay, or negative.

Speaker 1 7:21

Uh-oh. As much as we may think we are spending within our means, it is best to use time to find out for sure. And the more detailed your budget, the easier it is to see where your money is being spent. Now here's an example that can be applied to everyday spending habits that we don't think really matter. Sue loves her Starbucks coffee, but she spent six dollars for a cup of coffee five days a week, and she often tipped, so it averaged about six fifty. That's thirty-two fifty a week, or about, wait for it, one thousand seven hundred dollars a year. Oh my gosh, that is unbelievable. I know. We're often surprised how much the small things add up. Sue could change her habit to making her coffee a treat once a week and save around $1,400 a year. Can you think of a few things you'd do with $1,400?

Speaker 8:11

I can. I sure can too. Now from Sue, you can see that having a detailed budget gives you power over your finances instead of the other way around. And if some of you are thinking, I have a spouse or a financial planner who takes care of everything, or you're thinking, I'm just making ends meet. This particular episode is not for me. Remember, you need to know your finances because no one cares as much as you. And if someone else is doing it, two heads are always better than one.

Speaker 1 8:47

You may remember the term fun money. Well, financial knowledge can be fun because once you have it, you can be in the driver's seat and make better decisions with your resources. Oh, I have to admit, one time, um, if you give it time to think about, it's it's just hard to get started. So here are some very practical tips. One way is to take step one and create and maintain an electronic budget. This could be as simple as an Excel spreadsheet. That's how I have mine organized. It's nothing fancy. Or for the more tech savvy, there are software programs you can use, or perhaps your financial institution offers free tools. You can definitely just write out your budget by hand, which I know some of you are thinking, yep, I'm doing it by hand. Well, that's just great. Whatever it takes. So on my spreadsheet, I created categories for each month. Either fixed costs, such as a mortgage or rent payment, phone bill, cable bill, subscriptions like Netflix or Prime, and so on. I looked at yearly costs such as auto insurance payments, and I divided those into monthly amounts. Then came estimates into food, utilities, and miscellaneous purchases. I put everything down.

Speaker 10:02

You know, sometimes it's really hard to think of all the things that you spend money on. So it can be helpful when starting to first go through your credit card statements and bank account register to see some of the expenses you may have forgotten about, like the termite company, the car maintenance, the parking costs. And then you put everything down in a category. But don't make this hard. For example, if you see that you bought a shirt and you bought a dress somewhere and you bought, just use a general category like clothing and just put it under there. I had forgotten my monthly car wash, which was $20. So I was sure to add that because everything adds up. And now that you have a detailed picture of what you spend and your obligations, you can now make concrete decisions. Oh, I should add, don't forget the easily missed expenses as we just discussed, maybe HOA fee, medical co-pays. Your statement should pick most of this up, but as the day goes along, maybe or the week or the month, you might notice things and just add them. It might be a it might be a long list like mine. You can go study your spending habits after looking at this, and then define your goals, such as emergency or savings or vacations to help define your goals. Think a, what is number one, which might be the emergency fund, the savings. But then your second goal might be what excites you. If travel is exciting, then making a goal would be maybe a trip in Europe. If you have a concrete goal, it helps you save the money towards it.

Speaker 1 11:49

So now you can see where your money goes. A budget sounds like common sense, but if our expenses are met, we often wing it. With your detailed, realistic budget, you can learn if you are going in the financial direction that you want. Before you spend on that dream vacation, you might need to build up that emergency fund. That's not nearly as exciting, but it is exciting when that unexpected car repair comes along and you don't have to take money from the vacation fund because you've planned for it. You can easily adjust when an expense is added or the price of an item increases, and of course, make certain your totals don't exceed your income. If you're constantly dipping into your savings, find out why. You may have to make some changes, just like Starbucks, like Soup.

Speaker 12:37

That's right. You do not want to be living with negative cash flow. And there is no question that lately all costs do seem to be going up. For those of us that are going or gone into require retirement, it's critical that you know your budget with the changing costs. A year ago, maybe what you could afford is a little less this year due to higher utilities or higher costs.

Speaker 1 13:04

So you've taken your total monthly expenses and subtracted them from your net income. Look critically at this difference. Is it in a good place? Too much will add to your savings. Too little? Decide what you can decrease or if you can maybe pick up a fun small job that will add to your monthly income. For example, B has a friend who's working at her humane society in the office for a few days a week. She loves it and she loves the people and the pets that she sees. And she's made some extra cash for fun money.

Speaker 13:38

This is a lot to take in, we know, perhaps, but that's really all it is. How often should you do this? I know this is easy for us to say, but at least every six months, or if you have a major change, perhaps a good change like a raise, or you want to retire in a year, things can change quickly. So knowing what you have and being comfortable with each area's amount and potential growth is important. And start with our first steps. You won't get overwhelmed if you just figure out your total income and expenses monthly so you know your cash flow. Is it positive or negative? More or less than you thought? This is all good to know.

Speaker 1 14:24

Our main topic has been organizing and being aware of your entire financial standing. Now, what about growing your finances? At our stage in life, most of the advice is centered around no risk, and that is really good, but you can take a budget and look at ways to add to your savings.

Speaker 14:42

Direct deposit from a paycheck into savings or putting away a small amount from other income each month grows a nice vacation fund almost painlessly. As they say, pay yourself first. Another idea is having a gift fund which saves overspending at certain holidays. The year-end holidays, I have a tendency to lose all track and go for it, which I greatly regret at the beginning of the new year.

Speaker 1 15:13

I know what you mean. I ended up starting a Christmas fund with a small direct deposit each paycheck. And by December, I had my budget for the holiday. It was really helpful not to get that unexpected credit card bill in January. And I have learned that what gifts people really want is simply time with you or maybe a fun experience.

Speaker 15:35

I think that is so true. Last year I gave an escape room experience to my children, and we had a blast trying to get out of the room. Okay, I have to admit, thanks to my children, we did escape. I was personally amazed with some of the complicated puzzles we had to do. Now, as we keep mentioning, I'm sure you're tired of hearing it, but it does show the importance. Looking over your expenses and deciding if you have to cut and where to cut is great. Maybe you need to cut that cable bill and have one less streaming service. Or is that big box store annual fee paying for itself or is it time to cancel? Can you stretch that haircut from six weeks to seven weeks? Yeah, it can add up. Now don't stress over it. It's just a good feeling to have control over your expenses.

Speaker 1 16:31

I use two credit cards and I pay them off each month, and both offer great cash back benefits with no annual fee. I don't have that many expenses, but it's really fun to get free money from a credit card. I also drive an extra mile or so to buy gas that is often a dollar cheaper than at the neighborhood station. These savings amount to almost $10 every time I fill up. Two to three times a month times 12 months. Well, that's between $240 and $360. Again, free money.

Speaker 17:03

Great idea. Also, you absolutely should have a credit card in your name as the owner which you have applied for and received. If something happens to your sparse or spouse or partner and you do not have any credit established in your name, it can cause problems. The bank may decide to close the card since the owner is no longer there and he or she qualified for it. It is very important to establish your own separate credit.

Speaker 1 17:31

It's really surprising how the little expenses you think are really nothing can add up. So keep an eye on those Amazon orders and keep receipts for items that have guarantees. If something goes wrong with the item, you have proof of your date of purchase. I had a piece of luggage that broke after four years, and I had the receipt and the card explaining the five-year guarantee. Now I had to go through quite a few steps, and it's a very long story, not to mention that the customer service reps and I are on first name basis, but I persisted and I have a new set of luggage.

Speaker 18:07

Yes, it's interesting how sometimes it's not that easy to have some companies honor their guarantees. But Paige, I love your persistence and not letting them off the hook. And I'm sure you felt very empowered when you won that battle and got your new suitcase. Knowledge is power, and you will feel much more confident the more you know. Whether it's finding the best bank account with interest, learning about different investments, or simply getting the best deal.

Speaker 1 18:37

Oh, and we all love a good deal. Oh, I love a good deal. My cable rep told me to call in November because that's when they get the new discounts for the following year. I simply noted it in my calendar. It's very little time invested for a very rewarding boost to my budget.

Speaker 18:54

You know, good thinking. You know, they change the fees quietly every year, and if you don't call and get yours updated, you just keep paying more. We encourage you to get information and learn what you need to know. Then set aside a day to go through your personal financial picture. Now, you're all organized with finances, it doesn't stop there. What happens when there is a major change in circumstance?

Speaker 1 19:22

Right, that's a different scenario. Some of our listeners are already on Social Security and Medicare, but for those who are not, start talking with someone to learn more. One thing to note, if you are working under uh when you're turned 65 and covered under their approved health plan at work, you may not be required to sign up for Medicare right away. I chose not to sign up because I wanted to continue with my health plan at work and continue contributing to my health savings account. Research will help you understand penalties, timelines, and coverage. So begin your search when you turn 64 or even younger to have a plan.

Speaker 20:00

And now I will say that at 64, I felt like I could not possibly be nearing Medicare. But then I realized, huh, yes I am, and I faced it. Then once I found out how great Medicare is, I was busy telling everyone in the health system, I'm on Medicare, be sure and write that down. You know, it's also beneficial to set up your Social Security online account, and they will tell you what your income will be based on when you take benefits and when you reach retirement age. Now, believe it or not, the retirement age has changed. It's no longer 65. Check the Social Security website for the correct retirement age based on your birth year. It seems complicated, but planning far ahead to understand all of your options is the best route.

Speaker 1 20:51

Again, you're not alone. Ask your friends about their experience. And you don't have to attend one of those complimentary dinners and listen to a retirement planner. Although, if you like the restaurant, it is a free meal.

Speaker 21:04

Yes, we received so many complimentary dinner cards in the mail, we could have lowered our grocery bill with the free meals. Social Security and Medicare require some knowledge to navigate, but once you understand it, they offer great benefits. And allow yourself time and don't try to untangle all the information alone. It is a big change in life. Let's talk about some other big changes that may be unexpected and affect your financial management.

Speaker 1 21:33

You know, my grandparents had a large, fireproof, very heavy file cabinet. We all knew what that's where they kept the important papers. And if something was really important, it was in the bank's safety deposit box. It was so simple and centralized, but life is different now. Much of our finances are electronic, and for some of you, your spouse or someone you trust should have a list of all your accounts. We're not legal consultants. But we'll offer some areas for you to research on your own. These tips will hopefully help you have much less stress in any change in circumstance or crisis. Having everything easily accessible and organized in a central location, it's essential.

Speaker 22:17

Let's start with what we really may not think about. Social media. Now, this needs attention since it probably has your personal information and pictures. Did you know that you could set up a legacy contact or contacts who can have access to your social media account? You can also add a contact to recover your account. Research this and set it up. It should take honestly 30 minutes max. Think about email accounts and photos on the cloud. How can someone access those? Now I researched that with Apple, if you do not have a legacy set up, then you must obtain a court order naming you as the rightful heir, and it must specify in that court order the right to access the other person's personal information. So to escape that headache and maybe cost, set up a legacy contact. I have three people as my legacy contacts.

Speaker 1 23:16

And how about your bank accounts? Does someone need to be added as an authorized signer, able to pay bills, but not the owner of the account? Check with your financial institution. Again, this is easy to do and it will save a lot of hassle if someone needs to have access to the funds. This is different than simply adding a beneficiary. If you have someone you completely trust, make them an authorized signer on your account, and that allows them to get to it without filling out a lot of forms or showing paperwork. This can be critical if you are somehow unable to do it on your own.

Speaker 23:50

And how about all of those online bill payments? Do you have a list of the bills you pay through auto draft? Now, this is helpful for many reasons, but having a list of what is paid and when by auto draft on a credit card or directly from your bank account provides an easy trail to follow before too many payments are made needlessly. Also, this list helps if your payments are attached to a credit card. If that card is hacked and you replace it with a new one, you have an easy access list of creditors that need to be notified of the new card number.

Speaker 1 24:28

Don't forget to think about all of your accounts: your investments, retirement accounts, life insurance policies, maybe an HSA account. Are your beneficiaries up to date?

Speaker 24:39

And don't forget about your paid subscriptions that you need to cancel. And be certain to include your account number and perhaps the customer service contact. You'd be amazed at what your list contains and how useful this can be to you when you need the information easily.

Speaker 1 24:56

So we have important papers, and here's the big question: where are those papers? And they do their best to remember, but I'm just not certain my emphasis as I'm rushing off to the airport is uppermost on their minds.

Speaker 25:17

I bet it's not. In addition to that comforting paper file our generation likes to have on hand, this you really should consider setting up an electronic document with important contacts and information. Then, for whoever is helping you, access doesn't require going through that file cabinet, at least not up front. Although some of you don't trust the cloud, and we totally understand, you could have at least one shared document with critical information since you also can access it from other locations.

Speaker 1 25:52

Some people prefer to consult a financial planner if you need help with your finances or don't want to have to do all the research yourself. If you do have a financial representative, make certain you share their name and contact with family members. Often the advisor will keep other important documents on file as well. Now getting started is often the hardest part. Just do it one piece at a time. There are many free resources that offer a comprehensive list of documents that you may not have thought of: deeds, house titles, car titles, life insurance policies, etc. You can order books where you can handwrite your information, but again, an electronic document will save you from always making sure someone knows where those important papers are kept, and it's easy to update.

Speaker 26:38

Now, to layer on, another important category is medical info in case of an emergency. Doctors' names and phone numbers, what medications you're taking, and why. You can keep it simple. Just an overview of all those prescription names spelled correctly is handy to keep on hand for many reasons. Why, just recently my doctor asked me to bring in the list, so that is why I already had it and it was easy. Again, if you have this on an electronic word document, it's much easier to update and keep current.

Speaker 1 27:16

Just begin with a list. Write down what needs gathering and then conquer it one category at a time. You'll be surprised how much progress you can make. It's even worth having a conversation with family members to ask for help in planning. They will have some great ideas on how to organize it, and they will be the ones using the information more than likely. Getting their buy-in can help motivate everyone.

Speaker 27:40

They may even offer to help. When I started getting my information organized and in one place, I quickly realized how many unnecessary papers were in my filing cabinet and my online filing. You know, I personally have a hard time throwing away anything because I have a terrible tendency to tell myself, I might need it. I really might need it. But do I really need my utility bill from 2010? No, I think not.

Speaker 1 28:12

Research how long to keep legal and financial documents and force yourself to begin shredding one box or one file at a time. You can do it. And if you don't have a shredder, it's a great investment. Our county offers a free shredding day, and there are many other resources, but it's really nice to have a shredder at home.

Speaker 28:32

Gosh, I love that your county offers that. I guess I should check mine. You also mentioned your grandparents' fireproof filing cabinet. And another tip would be to purchase a small fireproof safe to keep at home for various legal papers that you want to have accessible. These safes are not expensive and it's a nice piece of mind item. You can also have extra keys made for family members, depending on the safe.

Speaker 1 29:01

I know you won't believe this, but we've actually finished loading you up with information on your finances, even though there's so much more. So take a deep breath and think I can do it one step at a time.

Speaker 29:13

Absolutely. And thank you so much for listening. And hopefully, this podcast was helpful. Please follow our podcast so you will find our new episodes as they are dropped. You will not get spam or have your information sold. Often the follow button is on the home page of the show in the top right corner, and you'll see like three dashes or three dots. If you click on them, then the follow choice comes up at the very top. You just click it.

Speaker 1 29:42

If you follow the podcast, you can easily see when a new episode drops by visiting the homepage of your favorite podcast app. And if you like the podcast, would you please share it with your friends? We'd really appreciate that.

Speaker 29:56

And always we end our podcast with two thoughts. Number one, how will you be kind today?

Speaker 1 30:03

And number two, what's something new you can learn for each day as each life page turns? And remember, listeners, keep thriving.