The Best Personal Finance Blog for Generation X & Y by Ted Jenkin which provides advice on how to save money, wealth management, financial services, and estate. Your Smart Money Moves is all about helping readers save and invest wisely, with tips on launching a small business, saving money every day, and putting that money in the right place.
A new CNBC and Acorns study found that while nearly 90% of both men and women sometimes make impulse purchases, nearly a quarter of men said they shelled out more than $100 the last time they made an impulse buy, compared to just 16% of women.
The Invest in You Spending Survey was conducted by CNBC and Acorns in partnership with SurveyMonkey from June 17–20. A diverse group of 2,803 Americans was polled across the country, ranging in ages from 18 to over 65. Of the total, 1,320 were men and 1,498 had a college or graduate degree.
This survey may be surprising to many of you, but not to me. You see, women are browsers by nature and men simply are not. You’ve never heard of three men who are talking amongst themselves and say, “You know George and Bill, do you guys have any interest in heading in town tomorrow to do some window shopping?” In fact, that is the exact opposite of what men like to do. Men like to get in the store, buy what they are going to buy, and then quickly make their way back to doing what they were doing.
Therein lies the reason that they are more likely to make impulse purchases because in the heat of the moment they are ready to make a purchasing decision whereas women are by nature more methodical purchasers, even if you believe that they shop more often. The new trend that is happening amongst both men and women is called shopping while tipsy, or even drunk, and it’s costing Americans millions and millions of dollars.
In the last year, Americans spent nearly $40 billion while being hammered—yes that’s $40 billion with a CAPITAL B. So, just what did people spend money on while sipping a Chardonnay on a Winesday or having a Woodford Reserve in their study before bedtime? Food, shoes, clothing, cigarettes, and shockingly even a new car!
We know that people do better socially after having a beer or wine to muster up some courage, but could the same be true when it comes to shopping? Will you be a smarter shopper with a slight buzz, or will this lead you down the inevitable spiral of just being more in debt?
52% of people say they spend money on food for takeout or drunk snacking, which makes a little bit of sense. However, a whopping 43% of people admit that they buy shoes or clothing while under the influence and 14% say they book a vacation (which they probably can’t afford).
Inebriated folks spent an average of approximately $447.57 on items in 2018 – almost double the $206 spent in 2017. And the total spent for drunk shopping increased by $10 billion dollars compared to 2017.
What does this all mean to you? Well, an innocent glass of wine, bourbon, or beer might seem like a way to take the edge off temporarily but could have long-lasting effects on your household finances. Your true impulses and desires to purchase items you normally wouldn’t might just come to fruition when you imbibe after you start browsing on the internet. Be careful about this because we don’t often see these purchases until a month later when the credit card statement hits our mailboxes. Once you read what you’ve bought, it might just get you drinking even more.
If you have an HSA (Health Savings Account), you know the
great value is that you can use funds from the account Tax-Free to pay for
medical expenses. Unfortunately like
most government created financial instruments, there is a limit on how munch
you can contribute to the account each year.
But even with a contribution limit, Employee Benefit Research Institute
(EBRI) reports that in 2017 only 13% of all HSA accounts were fully funded and
36% of HSA accounts were not funded at all.
Typically, the reason accounts are not fully funded is the
owner is either not educated on how the accounts work; or they do not have the
cash flow/income to make the contribution.
So, there is a strategy that most people do not know about,
where you can take dollars from your IRA and move them to your HSA. And most importantly you pay no tax or
penalty to do this. It is called a QHFD
(Qualified HAS Funding Distribution) and it works like this.
First, you need to understand that this is a once in a
lifetime option. While you are not
allowed to do this more than once in your lifetime, the QHFD lets you take a
tax-free distribution of your IRA funds and transfer them to your HSA. You can only transfer up to your allowable
HSA contribution limit. In 2019 those
limits are $3500 for single and $7000 for family coverage. (There is a catch-up
contribution for those of you over 55).
So as an example, if you are single and made a $1000 contribution into
your HSA, you would be able to do a $2500 QHFD.
Couple of gotchas.
The transfer must be done direct.
You cannot use the 60-day rollover rules. And since you can only do this once, you must
make the complete transfer from one IRA.
If you have multiple IRAs with balances less than your transfer amount,
you will first need to combine your IRAs before making the QHFD transfer. Also, this is for taxable IRA money
only. If you made non-deductible IRA
contributions, those dollars will not qualify.
Since this is a little know strategy and may not be for
everyone, YourSmartMoneyMove is to check with your financial planner or tax
advisor to discuss the specifics of your situation.
A few weeks ago, my family was
walking through the food hall in Ponce City Market on a Saturday morning. It was about 30 minutes before everything
actually opened up, but the place was buzzing with walkers and talkers
already. What was most interesting more
than the strollers, were the dozens of Instagrammer teams that were out and
about with their snazzy outfits, portable lighting kits, and super high def
digital cameras, snapping shots that were sure to hit Instagram with the latest
and greatest of what you need to know.
Our imagination is the most
powerful thing that we all have in our possession. Seventy-nine percent of smartphone users check their
phone within 15 minutes of waking up, and the most popular time for using
Facebook and Instagram is in the evening. About half the time we spend is on our
news feed or checking the Instagram stories for the day. (source
bizjournals.com). Every time we look at these
pictures and newsfeeds during the morning and evening, pictures conjure up
images of our friends having the time of their lives. We see people who seemingly are traveling to
a new city every week. We watch our
friends and neighbors driving luxury cars.
Or we fancy the dessert our friends are having at the brand-new
restaurant with a sparkler sitting on top of a chocolate ball. It makes us all take quick stock of
measuring up our own lives against the visuals we see on Facebook and Instagram. So how do Facebook and Instagram get us to
spend more money?
The Sneaky Ad
– You should
know by now that Facebook and Instagram know your tendencies better than your mom
or your spouse do. They know what you
like to watch, where you like to shop, what decade relates most to you, and
where you would want front row seats for a concert. Did you ever wonder why they might be serving
you up ads for retro t-shirts with 80’s sayings? Or why they put certain brands of sneakers in
front of you? Or maybe wonder why there
are constant ads for Keto products and a Peloton? Whether they get you by using something
called a remarketing pixel or they develop something called lookalike
audiences, the computer is faster and smarter than you.
Vacation I Always Wanted – Facebookers and Instagrammers
are obsessed with taking pictures of their vacations by the beach, in another
country, or on a cruise with the kids.
Since a picture is worth a thousand words, we often ask ourselves this
question: “How are these people finding the money to enjoy all of these
vacations?” The simple answer is they
aren’t. You should check out my new website Money Peer if you really want the truth about where you rank. It doesn’t really matter though, because the
more we see these fancy vacations, the more we want to take one ourselves. Eventually we get the vacation we always
wanted, whether or not we can afford it.
Do you know anyone at this point that hasn’t visited either a) The
Amalfi Coast b) Paris or c) Iceland? It
almost feels like we stalk each other to get vacation ideas.
Car I Always Wanted – Vroom! Vroom! There is a
beautiful picture of that new BMW, Audi, or Mercedes flashed up on the morning
news feed on Facebook. You scan the
picture to realize that you are still driving that 2008 Honda or yesterday’s
minivan. It doesn’t bother you at first,
until the next family posts up their stunning new automobile as well. Recently I saw an Instagram photo where there
was a Lambo, Ferrari, and a new BMW right in the driveway. Before long, you find yourself searching the
internet and then on to the dealership to pick up your new ride. What feels sexier….getting a brand new
Maserati or posting a picture of the 2 year old Toyota Highlander you just
Body I Always Wanted- Instagram models! Instagram
models! Calling all Instagram models!!! Can I get shot of you in real life and
not with a well-lit, filtered out, and definitely not real photo??? Have you
ever seen pictures of someone face stuffing twinkies and apple pie, showing
themselves getting heavier and heavier as they grow older? Of course not. In fact, most people who have whipped
themselves in shape show off the bikini pose or shirtless on the boat. Those who eat too much simply show pictures
of their kids. It’s kind of how Facebook
and Instagram work. When you see these
pictures of people you knew 25 years ago looking so fabulous, you too
eventually start spending money to get your body in better shape as well.
and Instagram are clearly two of the largest social media platforms in the
world. Beyond the people who annoy us with
random posts that are creepy and dark, or those that post up on how horrible
their day was because they stubbed their toe, most people post the best of
their lives to let everyone else know how incredible they are doing. Enjoy the pictures, but don’t let it make
you take a bite out of your wallet.
Nobody….and I mean nobody, posts their credit card debt or lack
of net worth statement on these social media platforms. You know what isn’t fabulous—STRESS!!! And you may have lots of it if you spend just
show you can keep up with the Joneses, because BTW, the Joneses are broke!
What’s your worst nightmare on a
Saturday night? We live near a massive
outdoor shopping and eating complex called Avalon. Filled with 20 or so restaurants, it’s
generally buzzing on the weekends with couples and families walking around,
spending money in the stores and grabbing a bit of the cuisine of their
choice. My worst nightmare on a
Saturday night is taking the family out or meeting some friends and stepping up
to the hostess who tells me it is going to be an hour and a half wait to get a
table, and puts our name into the software so we can track how far back we are
in the line to eat. Nightmare,
A few weeks ago, a friend of mine flew
into town and we went to grab dinner at a hot spot in Buckhead, where they told
us our wait was going to one hour and fifteen minutes. When I heard the hostess shout out the
lengthy amount of time we would have to stick around, I told my friend we’d be
best off finding somewhere else to eat.
Then it happened. Something that
I’ve seen work in the movies and thought had gone out the window circa 1985. My friend changed my mind about what kinds of
financial tactics still work in today’s modern-day age.
He glanced at the hostess and said,
“Hey, can I ask you a favor?” as he pushed a $50 bill across the counter. “I’m sure that there is nothing you can do,
but please take this in case there are any openings that happen to come up
quicker, and let us know.” When I saw
him push the money across the hostess stand not even done in a discreet way, I
thought to myself how embarrassing this situation is going to be. We turned our backs as she scraped up the $50
bill and we headed over to the bar for a drink.
As my friend and I grabbed a cocktail I
said, “What was that? You know with all
of these waiting apps today, that kind of old school give money to the hostess
stuff doesn’t work anymore, right?” He
quickly gave me a quasi-staring glance and said, “Yeah, it works all the
time. Everywhere I go, I have no reason
to wait in line. I just give them a tip
and magically I am at the head of the line.”
As he blurted out this statement, I laughed a little bit and thought it
would be best to take our drinks and head to the patio scene.
As we worked our way to the patio, he
shared with me WHY he uses this technique.
He started discussing the concept of an HOUR of time and what one hour
of time is actually worth today. If an hour of your time is worth $100, $200,
or even $500, why in the world would you ever make you, your friends, or your
family wait if you could spend money to get to the front of the line? They do it in places like Disney World with
the fast pass, so why not fast pass yourself at the restaurant?
About five minutes later on the patio, a
buzz came into my phone. Sure enough, it
was the hostess saying that my table was ready for us to sit at RIGHT NOW! Not only did we get a table, but we got one
of the best patio tables in the entire place.
As we sat down, an incredulous look came across my face almost in
bewilderment of what just happened at the restaurant. I said to my buddy, “There is no way I
thought that kind of stuff worked anymore.
If I had known that, I would have used it a week ago in Savannah, where
we had to wait 90 minutes for dinner.”
He said to me, “Just remember Ted, what is an hour of your time worth? If you can get seated for less than that, do
it every single time.”
Next time I am in line for a long wait, maybe
Uncle Benjamin will join me and find us a seat within the blink of an eye.
Atlanta based oXYGen Financial, one of the pioneers of Generation X and Y financial services, is opening another new location in Sarasota, FL. oXYGen Financial has four divisions and has more than 1.4 billion dollars under advisement.
This new location, being managed by seasoned financial advisor Micah Keel is the second new location opened by oXYGen Financial this year. Keel discussed the impact oXYGen is going to have in the Sarasota
area. “oXYGen’s new branch embraces an evolved concept that focuses on
design, service, and people. The oXYGen Financial technology platform
builds efficiency and productivity. This will allow our team in Sarasota to focus on our clients and move from a transaction drive culture to a more consultative, hands on approach with clients.”
“We are excited to have Micah and his team join oXYGen Financial,” said Ted Jenkin,
CEO and Co-Founder of oXYGen Financial. “We continue to look for
talented financial advisors who can help more clients breathe easier®
about life. While many companies still push proprietary products, we
embrace the idea of being a true fiduciary through a high tech and high
touch approach.” oXYGen Financial has been using a specialized
proprietary process through a Private CFO® concept for more than a
decade and has introduced new services for families including something
called a budgetologist to help business and individuals become better at
managing their cash flow.
Keel underscored how important the elements of advice and service
are today as products become more commoditized in the financial services
industry. “With all of the options available today, people select
oXYGen Financial as a company to do business with because they want a
personal experience—nothing can replace a smile or a familiar face
when it comes to building trust and providing reassurance to clients,”
“We are excited to add oXYGen to the dynamic Sarasota
landscape. Our goal is for oXYGen Financial to become a financial hub
of commerce and community for residents and businesses who live and work
here. Sarasota is the perfect market
for the oXYGen brand, and we invite everyone to stop by to discover a
breathe easier® way to financial planning and advice.”
oXYGen Financial was co-founded in 2008, and the company now has
more than 1.4 billion AUA. They are routinely featured in the Wall
Street Journal and plan to open five more locations over the next
year. To learn more about oXYGen Financial, go to oXYGen Financial or oXYGen Financial Sarasota locally in Sarasota.
Recently, I had the opportunity to experience something really special. Several of my college roommates were turning 50 years old, and there was a multiple person birthday gathering in Washington, D.C. that I attended. As we reminisced about the good old days in college and I watched their children run around (most of them six to eight years old), it occurred to me that my very own friends are going to be starting down the backstretch towards retirement. It’s hard to imagine that for some of them they will be 65 years old when their kids either get into college or graduate college, so does this mean they will take a different path to retirement?
Either way, there are smart money moves you should be making when you turn 50. I know this first hand because the two co-founders of oXYGen Financial (Kile Lewis and myself) both turn the age of 50 this year. While we started oXYGen Financial to represent our generation and the next one coming, we’ve found that whether people are 22 or 72, they absolutely love the way we do business. We are now in four cities, have thousands of clients, and more than a billion dollars under advisement – so we know a thing or two about planning our finances. Here are five smart money moves to make when you turn 50:
It’s Time To Catch Up- There are quite a few good things about turning the age of 50, and one of them is that those who want to save more for retirement, get a special tax break from Uncle Sam. These are called ‘catch-up’ provisions and they allow you to put more money into your 401(k), 403(b), IRA’s, etc. This may be the most powerful savings tool you do for retirement at the age of 50.
Here in 2019, you can put away up to $19,000 pre-tax in your 401(k) or 403(b) plans, but if you turn 50 at any time during the 2019 calendar year, you are eligible to put away $6,000 more as a catch- up in your 401(k) plans. If you are saving money in IRA’s, you would normally be able to put away up to $6,000, but the catch up now allows you to put away an additional $1,000 within your IRA. For those of you who own a small business and have set up a SIMPLE IRA, there are catch up provisions in those plans as well.
Closely Examine Your Mortgage Situation- Depending on what age your children are, the housing situation could be challenging to figure out over the long term. Some 50 year olds are seeing daylight and thinking about whether their empty nester home will be in the city, the mountains, or at the beach. Or maybe some of all of that! For those 50 year olds who just had kids recently, you still might be thinking about what school districts you want to be in or considering an area that will be good for raising kids.
The harsh reality you need to contemplate is how long you think you will be able to earn the same income you are earning today, and how that will work with the timing of paying off your mortgage. I paid mine off years ago, and I still think no matter where interest rates are there is something very comforting about driving home and knowing that your house is done and done. This is the time with interest rates being low that you might consider going to a 15 year note or looking at the numbers of your current 30 year note to see how to pay it off in 10 or 15 years, depending on your overall retirement plan. The biggest concern is if you take a new 30 year large mortgage today, ask yourself how you will pay that off when you no longer are making the same income you are making today.
When Will the Kids Be Off of Payroll?
Depending on the age of your kids, you really need to assess the balance of what you want to do for assistance with college education and your desire to make a work optional plan. Do not underestimate (no matter how tough you think you are going to be), how much emotional pull there will be to actually help your kids. I’ve heard parents that say, “I’m only going to give my kids a head start of $10,000 a year.” However, when their children get into a top school, they begin to figure out other ways they can help fund their kids dreams. I’ve seen this time and time again, so have a realistic conversation about what this is going to look like.
For the aftermath of college, consider whether you will let them live at home or not, and for how long that will persist. How long will you pay for their mobile phone? Their auto insurance? Their health insurance? All of these questions will help you better determine your overall run rate as you approach retirement. And don’t forget if you have daughters (and sons), there is probably going to be something down the road you’ll have to come out of pocket for if they get married. I recently saw one that was well over six figures out of the parent’s pockets!!
Consolidate- For the first 30 years of your adult life, you’ve probably acquired more stuff than you imagined. There is at least one or two collections in your house that you haven’t looked at or touched in years. There are countless numbers of boxes of pictures, cards, awards, and other family related items spread throughout the house. You’ve got closets of clothes and pieces of old luggage in your storage closet. Is it time to do a purge and see what you really need?
That’s the physical part of what you have collected. On the financial side, you might be carrying four or five credit cards, a checking account(s), savings account(s), credit union account(s), various old 401(k)’s, several brokerage accounts, and other financial instruments you have purchased over the years. If the accounts are in many different places, are you really gaining an advantage by having all these accounts? Are there some strategies that just aren’t working? Are you tired of trying to figure out where everything is and how it is actually performing? This is a great time to consolidate and get your financial house in one or two places.
Review Your Insurance- Especially Long-Term Care- You are probably thinking 50 is the new 30, right? Wrong! 50 is actually 50 and whether we like it or not, the aches and pains and signs of aging are starting to happen. At this point you might be fully grey or seeing signs of grey. You might be using reading glasses (100% in a dark restaurant reading a menu). You might notice the knees don’t work exactly as they used to or your lower back has just a bit more pain than it once did ten years ago. This is the year you will get all the big physicals and have your colonoscopy (ugh!). But it’s super important before it gets too expensive to review if you need long term care insurance or if you need to adjust and get more life insurance or disability insurance for the stretch run.
When do you really know that 50 is 50? When you start managing people and making references to 1980’s movies or music that are now considered classics! Turning the big 5-0 can be a lot of fun, but will be even more fun if you know that your financial house is in order. Use these five money moves and create a plan that will help you make work optional!