Yearly Archives: 2016

Time for Self-Reflection

Camargo-WEBThe last quarter of the year has arrived, and it will likely pass in a flash as we enjoy the cooler weather and celebrate the holiday season with friends and family. despite the hurried pace of life in the final months of the year (or perhaps because of it), I find it helpful to slow down for a little bit and make time for self-reflection.

I like to take stock of my financial life and goals by considering a series of questions. Perhaps this is because of my profession. Still, the questions I ask myself apply to all of us. Making time for self-reflection helps me feel more grounded and in control of my finances. It also tends to recharge my motivation to work and save and achieve my goals.

If you’d like to give it a shot, here are a few questions and ideas to get you started.

  • How much did I save this year? Could I have done more? How much do I want to save next year? One way to make saving easier is to make it automatic, through direct deposit from your paycheck to your savings or investment accounts.
  • Did the money I spent in 2016 reflect my values and priorities? Make a list of five uses of your money that made a significant, positive difference in your life this year. If you have trouble thinking of five, consider outlining a plan for more purposeful spending in 2017.
  • What are my top three long-term financial goals? Reviewing your goals every now and then can help boost your motivation and drive.
  • How much debt am I taking into the New Year? Take an honest look at the number. If the size of your debt is holding you back from saving for your goals, develop an action plan for reducing your debt next year.
  • What are some poor money habits I can squash? We all have at least one or two. Consider the areas in your life where you can make changes, no matter how big or small.
By |2019-08-14T13:59:56-07:00October 24th, 2016|Current Affairs, Financial Planning|

Tax Loss Harvesting for Fall

Eng-WEBAs the weather cools and seasons change from summer to fall, farmers are looking to harvest. Much like the farmer, we at Perspective Financial are turning our thoughts to harvesting – from a financial perspective. Tax loss harvesting, capital gains distributions and required minimum distributions (RMDs) from IRAs are areas of tax planning we review and monitor for our clients throughout the year. During the fourth quarter, we pay particular attention to how these aspects of their portfolios may impact their individual tax situations.


The practice of selling a security that has experienced a loss is called tax loss harvesting.


By realizing (or “harvesting”) a loss, investors are able to offset taxes on both gains and income. The sold security is replaced, at lower cost by a similar one, while maintaining the investor’s asset allocation. We were able to do some tax loss harvesting earlier this year when the markets were very volatile and weak, where it was appropriate for clients with taxable accounts. We continue to look for such opportunities as the year comes to a close.

By |2019-08-14T13:59:56-07:00October 10th, 2016|Financial Planning, Investing, Taxes|

Estate Planning and Your Digital Afterlife

McCann-WEBSerious concerns about our “digital afterlife” have emerged thanks to the rapid rise of social media. When the time comes to settle a deceased person’s estate, digital property is a relatively new and growing problem. This type of “asset” simply did not exist 20 years ago. Estate planning and your digital afterlife now go hand in hand.

Digital property is any digital record you own or control – including financial accounts, email, social media, blogs and digital files like music, movies, books and photos. Access to these is limited by the “terms of service” you agreed to when creating an account or buying a product online. Because of privacy laws, many services don’t allow you to pass account control to others upon your death — even if you include it in your will — creating significant legal and emotional challenges for your family.

On the plus side, some companies and services are understanding of the challenges and taking steps to help ease the problem.

In 2013, Google became one of the first major internet companies to put control of data after death directly into the hands of its users. You can now specify what you’d like to happen to your data after you pass away. You can choose to delete data after a certain time period, or to pass the data (from accounts such as Gmail, cloud storage, YouTube, etc.) to a designated person(s). It’s important to note, however, Google doesn’t allow you to pass control of accounts – just the data.

Last year, Facebook (FB) introduced a new feature that lets you choose a “legacy contact” – someone who can manage the memorialized account after your death. You may choose to give that person permission to download an archive of the photos, posts and profile information shared on FB. The legacy contact will not be able to log in as you or see your private messages. Alternatively, you can request that FB permanently delete your account after death.

Until more service providers follow FB’s and Google’s lead, there are steps you can take to protect digital assets.

  • Find out if your service providers have a way of naming a person who can access digital assets in the event of your death.
  • Back up important items from the cloud into some “tangible” form that can be given to your heir(s).
  • Explain to loved ones today what you would like to happen to your digital accounts upon death.
  • Create a comprehensive record of accounts/passwords. Store it in a safe place, and tell your personal representative how to find it.
  • If you don’t want anyone to have access to your online accounts after your death, do not provide them with access. Make account names/passwords difficult to guess, and inform service providers of your wish to have accounts deleted when you pass away.
By |2019-08-14T13:59:56-07:00September 26th, 2016|Current Affairs, Estate Planning|

Financial Decisions Not Always About Money

Man and Child Having fun in the park.Financial decisions are not always about money. The things you value in life can and do influence the many financial decisions you make. In fact, according to research conducted by Lois Vitt, Ph.D., financial decisions are often not about money at all.

Vitt is chair and founding director of the Institute for Socio-Financial Studies. She conducts research on consumer decision-making, financial-literacy education and other financial topics. In a study funded by the National Endowment for Financial Education (NEFE), Vitt indicates there are four categories of human values that correspond to people’s financial concerns in life:

  • Inner values: psychological and spiritual
  • Social values: family, friends and communities of interest
  • Physical values: health and environment
  • Financial values: sufficiency, sustainability, appropriateness

These values can run the gamut from spirituality to physical health; from a desire to be with and take care of others to the need for freedom and independence; from craving beauty and comfort to controlling how others perceive you.

Take the Quiz

To better understand why and how you make financial decisions, Vitt asserts that you first must understand your values. When you have a handle on what you really value, you can clarify your thinking, make smarter decisions, improve your personal relationships, and get better at making, keeping and growing your money.

Click here to take the 20-question LifeValues Quiz.

By |2019-08-14T13:59:56-07:00September 12th, 2016|Financial Planning|

The Rainy Day Fund

Eng-WEBOne cornerstone of a good financial plan is a rainy day fund. Saving for a “rainy day” helps ensure you have money available to meet an unexpected expense, like a car repair or a medical bill.

Last year the Federal Reserve released a report on the economic well-being of U.S. households.  Their survey revealed that 47 percent of respondents either could not cover an emergency expense of $400 or would cover it by selling something or borrowing money. This means that almost half of American households do not have a rainy day fund.

I am often asked by clients, “If I had an extra amount of money left over at the end of the month, where should I put it?” If you do not have a rainy day fund, you should start building that up first. Good financial planning would not let an unexpected expense derail you and your family.

Start by putting aside $1,000 in a savings account to be your rainy day fund. This step is also the first of Seven Baby Steps recommended by financial guru Dave Ramsey of Financial Peace University. As with any type of savings goal, it is best to make it “automatic” by setting up a monthly auto deposit or direct deposit into a savings or investment account.

After your rainy day fund has been established, your next goal should be to grow that fund into a true emergency fund of three-to-six months of living expenses. This pool of savings will enable you and your family to weather a larger potentially-catastrophic event, such as a job loss or a chronic illness.

Another important thing to be mindful of when prioritizing your “extra money” is to make sure you are not going into debt to save. You do not want to max out contributions to your 401K plan at work and end up paying for other things with your credit card. Look at your goals as needs, wants and wishes. Understanding the priority of each of your goals will help you to know where savings should be allocated.

Saving for a rainy day is a great first step in a sound financial plan and will put you on track to understand how to prioritize that next dollar of savings.

By |2019-08-14T13:59:57-07:00August 22nd, 2016|Current Affairs, Financial Planning|