Be the Change You Want to See: Wear A Safety Pin

November 11, 2016  |  No Comments  |  by Stephanie  |  WeAr Safety Pins

The idea of wearing safety pins to show solidarity was a grassroots movement that started overseas in the wake of the Brexit vote.

Months later, many Americans are now reeling with similar shock, grief and disappointment following the outcome of our latest election. Many people feel more vulnerable about our future than ever before. I understand the fear, the anger, and the anxiety; I’m feeling it too.  But I’m really tired from being really scared. I also believe that giving into anger is going the way of the very reasons we feel so hopeless right now.

Let’s stop fighting and creating further division and fear. We are so much more powerful to create the change I think we all want to see if we bind together against whatever events are to come.

I want to be clear that I did not “invent” the idea of safety pins as a show of solidarity. That credit belongs to a Twitter user named Allison, according to an article by Good. (I’ve reached out to her to try to hear her story directly, and if I do get a response from her will certainly report on it here).

The bottom line is that I think it’s brilliant idea. When I read the Good piece, I immediately got teary eyed. For the first time in days, I felt hopeful. We can use our voices in a way that is powerful but peaceful. Because of that, I want to help spread word about the safety pins movement.

A life coach I follow on social media named Elli Richter once posted this tip and it’s stuck with me. I’m paraphrasing, but her advice to any struggling to identify their passion in life is to start with what makes you angry.

Let’s shift our energy away from angry fighting about our political beliefs on social media and into positive action. Regardless of your political opinions or who you voted for, we are  people first and foremost.  People have their own reasons for how they voted, and that’s their right as citizens. But this is where we are. We need to stop pointing blame and start preparing for what is likely going to be a really rough ride through uncharted territory, regardless of where we eventually land.

Let’s bind together to protect our present reality, and whatever the future holds. We are not alone, we are not powerless, and we are not without a voice. If you’re feeling scared, vulnerable, anxious or threatened, wear a safety pin to indicate that you are a  safe place and support system for anyone feeling the same.

If you want to share your positive story about the outcome of wearing a safety pin or why you are compelled to do so, I’d love to publish it here. (I will immediately delete any hateful comments or stories expressing as much).  I’ve just established a WeAr Safety Pins Facebook page to help spread the word, too. Please share it with others you if you are so inclined.

Let’s bind together: This is not about politics. It’s about people.


Women Have a Right to Be Offended By This Election (Even If Your Candidate Won)

November 10, 2016  |  No Comments  |  by Stephanie  |  Better Your Life

I’ve listened to more political commentary about the 2016 presidential election than I ever have in the past. Despite that, I don’t really consider myself a political person. If anything, I’m a libertarian. But to be perfectly honest, I don’t trust the political system in general. I suspect many Americans feel the same based on this election. The truth is, the whole political machine is so far gone few of us feel we’re a part of it.

We vote because it’s our civic duty, and to teach our kids to do the same. But do we really expect any meaningful change when we elect a new candidate? Personally, I’m just trying to pick the person who will keep us out of war, keep the economy in tact, and preserve our  civil liberties.

So I was so surprised by my deep emotional reaction to the 2016 presidential election election.

Let me start by saying my feelings have little to do with Hillary Clinton as a candidate. While I think it’s absurd that a woman hasn’t been elected as the leader of our country by now, I wasn’t “all in” for her. I felt from the start that she was too divisive a figure to be the best fit as a candidate, purely from a Democratic branding standpoint. But her loss is meaningful because it’s a reminder of a societal problem I think a lot of us want to believe doesn’t still exist.

Let’s just look at the facts, taking politics out of the equation. Love or hate her, you cannot dispute that Clinton was/is qualified for the job. Think she lied? Maybe she did. Think she’s corrupt? She may be. Is she part of a system people distrust? Indeed. But you can’t blast one candidate with that argument if you’re not going to hold the other one’s feet to the fire with the same accusations, too.  I’ve heard excuses from what I’ll call reluctant Trump supporters that he was the lesser of two evils; people wanted change so desperately they’d vote for any outsider. I won’t get into political arguments, but that sounds a lot like cutting off your nose to spite your face.

Regardless, that’s my opinion and we all know the saying about those. But humor me for a moment and put your emotions about the 2016 presidential election aside. Look purely at the facts. We turned away a highly qualified female candidate in favor of one with no experience. If this were a job interview for an accounting position at a business, it would sound a little fishy if a female job candidate with twenty plus years of experience lost the job to a male candidate who had no experience relevant to the industry, if both were willing to do the job for the same amount of compensation. Am I right?

So when I take emotions out of the equation and look at the election through that lens, the reason this outcome feels so unsettling to many women is clear. We just got a living, breathing confirmation that the roadblocks I think we hope are slowly going away really haven’t at all. Yesterday, we got a big slap in the face message: Commitment to serving others, dedication to a cause or profession, education, passion and intellect are not enough. Work as hard as you want but at some point in your career, you will lose the job to a man.

I’ve seen a lot of social media posts like “boo hoo, get over it, your party lost.” It’s not about that all; I don’t consider myself a card carrying member of any party. I’m not ride or die Hillary Clinton. But as women, we share common ground we both wish we didn’t: We’ve been humiliated by the actions of a man, talked down to, disrespected, marginalized, and objectified. Paid less than a man to do the same job. Stared at by ogling men driving by, whistled at, called “hot” or “cute.”

Regardless of if your candidate won or lost, all women have a right to be offended by the outcome of the 2016 presidential election. The country told us in no uncertain terms: You’re still not in power. You’re still subject to whatever actions a man wants to bring upon you. Whatever your political leanings, let’s all agree that women deserve better than that.





What Financial Health Means to Me

June 29, 2016  |  No Comments  |  by Stephanie  |  Better Your Life
financial health stephanie taylor christensen

financial health by stephanie taylor christensen

Financial health the ability to move out of a career you hate. Financial health is the option to choose relationships based on emotion instead of perceived security. It’s confidence that you can leap into the unknown. Financial health is the freedom to live on your terms.

I grew up in a family where money was the catalyst behind a number of pivotal life events and emotions. My dad was a small business owner who grew up in poverty. Though armed with only a high school education, he took it upon himself to learn how the rich become wealthy, and provide a better financial life for his children than he experienced. He learned about the stock market, and exchanged phone calls with his broker daily. It worked well for him—until it didn’t. When we celebrated my birthday on October 18, 1987, the Taylor family had no idea that a margin call was to come in less than 12 hours. Black Monday changed our financial life entirely.

I wouldn’t understand the details of what had happened until I was nearly 30 and my dad passed, but the crux of the lesson wasn’t lost on my ten year old self: Money, material items and the sense of security they provide are fleeting. I didn’t need to see bills, bank account or credit card statements to know where my family stood financially throughout the years. Our financial security was palpable based on the amount of stress that was or wasn’t present on any given day.

While these experiences likely shaped the reason I am a freelance financial writer today, I didn’t learn about financial health until I was 26. I was educated and business-minded but had no idea that I was expected to live within my means, save money, or manage debt. I didn’t understand how to use credit cards or live on a budget.  But it didn’t bother me; I had no aspirations of being financially secure. I figured debt was the American way. My experience was no different than most: 57% of Americans struggle financially, according to the Center for Financial Services Innovation’s data.

It wasn’t until I met a former ex who had his financial act together that I learned you can chose your financial life. That was the start of what would be a five year journey to dig my way out from under $15,000 in credit card debt. I pinched pennies, worked side gigs in addition to my full-time job, said no to almost every non-essential purchase, and cried many tears of frustration. But in that time, I grew emotionally, and intellectually and physically. I learned that commitment to a goal dictates your success or failure. I learned that I had far more options over my financial path and where it could lead than I once believed. One day, after all the years of struggle, I was free of debt. For the first time, I felt financially empowered, capable and free to live on my terms.

Financial health is the ability to choose your path, whatever you want it to be. When you’re ready to achieve financial health, life is yours for the taking.

Do You Need Security Apps to Bank on Your Phone?

May 13, 2016  |  No Comments  |  by Stephanie  |  Make More of Your Money

Using your phone to access bank accounts, make deposits and pay is convenient, but is it really secure? According to an analysis by IO Active Labs, the answer is…not really.  Of the apps it audited, 40% did not validate SSL certificate authenticity, and 70% did not use multi-factor validation. That makes life pretty easy for identity thieves; they only need one piece of  information, like a password, to crack into your accounts.

Assuming that doesn’t scare you off from using your mobile device to access your financial information, it does underscore the need to be personally proactive about mobile security. Here are a few hacks and suggested security apps to protect your financial data when you bank on your smartphone or tablet.

Conduct your own mobile security audit.  The threat of identity theft is kind of like death: The odds are high that it will happen to you when you least expect it, yet most of us ignore that realty until we’re staring down the barrel of the proverbial gun.

The best way to prepare yourself from being a victim of identity theft or security breach? Simulate what you will face before you’re under the threat to address your vulnerabilities. Role play exactly what would happen if you lost your mobile device:

  • Is the password security feature activated on your device? How many minutes pass before it activates when the phone isn’t in use?
  • Do you have the information you need to suspend bank and credit card accounts if when you’re near and not near a computer?
  • Do you know the phone numbers to each financial institution and credit card providers 24/7 customer service line?
  • Do you know the answers to security questions you’ll need to verify your identity with credit card issuers and financial institutions?
  • Do you know how to quickly reset account numbers and passwords from a different device, if your phone or tablet is lost or stolen?
    • If not, there are security apps that simplify the process: Checkout Lookout Security & Antivirus for Android, or 1Password for iOS.
  • What are the odds someone could crack your passwords? (Amazingly, 123456 and “password” are still commonly used).
  • If a person was able to log into your phone or tablet, what would they find in it that could be used to infiltrate your other personal information?

Don’t log in to your accounts on open Wi-Fi. By definition, WiFi hot spots are  free to the public. You cannot control who is on the network or predict whether that person has the tech skills to start a cybersecurity issue. Resist the urge to log into your bank and credit card accounts on your mobile device until you are on a private, password-protected connection.  Though many mobile banking applications use encryption technology to protect your data,it’s better to wait a few minutes to find a secure connection than take the risk.

Use mobile apps instead of browsers. Despite the security concerns associated with lots of supposedly secure apps mentioned above, you’re still better off using your financial institution’s secure mobile banking app than accessing your account info though a mobile browser. Just make sure to download it directly from your financial institution instead of the app store, to confirm you’re not duped into downloading a fake version of it.


4 Simple Financial Literacy Lessons for Kids

April 7, 2016  |  No Comments  |  by Stephanie  |  Make More of Your Money

financial literacy for kids

Most parents want their kids to have more opportunities than they did. But for all the hard work and sacrifices parents make to give their kids every possible advantage, most of us fall short when it comes to teaching kids basic financial literacy.

Regardless of your own level of knowledge or interest in money, you can instill financial literacy in your kids, simply through your words and actions. Here are four ways you can make your kids more money savvy, starting today.

Talk about money openly. Money remains one of the last taboo topics. Look at politicians. They’ll talk openly about race, religion, abortion and immigration, but get prickly when the topic of their financial lives arises. But like any issue involving shame, swiping the topic of money under the rug creates bigger long term effects. In fact, a study by T.Rowe Price revealed that 46% of kids whose parents talked about money openly felt they were savvy in the area of personal finance–even when some of those conversations were parents arguing over money. Just 14% of kids whose parents didn’t talk about money in front of them said they felt money savvy.

Give them an allowance. Kids who have the opportunity to earn money develop an inner work ethic, and sense of confidence regarding their value. Nearly 40% of kids in the T.Rowe Price survey who got an allowance said they were smart about money.

Let them make bad choices.  The temporary nature of money becomes apparent when you’re responsible for paying for your own rent, food and bills.  But if you don’t learn how to make financial choices based on the money you have, earn and owe, the stakes are high and can have lasting consequences. Let your kids choose how they’ll spend their money–even if you don’t agree. When kids are empowered to make decisions about how they will earn, spend and save, they learn lifelong lessons about the consequences of choice when it comes to money, in a low-risk environment.

Explain price tags, and relative value. Kids who are as young as five years old can grasp the concept of comparison. Just as three apples are more than two, they can reasonably understand that an item that costs $5 requires more money than one that costs $4. When you take them shopping, explain price differences and why they matter, including the fact that sometimes packages make you think you are buying a “better” item, when it’s actually the same. Invite kids to participate decision-making processes of what you buy. If you disagree with their choices, explain why. These money lessons may add a few minutes to your grocery trip–but can make kids better critical thinkers about money for their whole lives.

As bigger ticket items like bikes, cars and college applications become part of your child’s financial reality, discuss price tags, value and choice with the same level of transparency. If your teen wants to buy a car, for example, discuss a reasonable price tag and how you expect him or her to earn the money to pay for part or all of it, including how to budget for the costs of gas, repairs, and insurance.

When kids are ready to complete college applications, compare college prices along with their choice of major or career. While money shouldn’t determine education or professional decisions entirely, viewing them the lens of financial reality can help kids understand the impact of their choices, and sacrifices those may require. To manage student loans, for example, many experts recommend not borrowing more than one can reasonably expect to earn the first year in the professional world. With that in mind, you and your child can discuss if it makes financial sense to take some general classes at a local community college, to consider various housing options, or to secure a part-time job while they’re enrolled in school.



Wills, Probate and Estate Planning: Protect Your Wealth

February 9, 2016  |  No Comments  |  by Stephanie  |  Make More of Your Money


You work hard for your money in life. Why let it get caught in probate when you die? Here are common mistakes even the financially savvy make when it comes to estate planning.

Thinking estate planning is only for the wealthy.  The term “estate” tends to have a connotation that conjures images of old money and family homes in Nantucket. But in legal terms, your “estate” is anything you own when you die. That can be personal property, like furniture, a car, or jewelry. It can be intangible property, like your retirement and bank accounts. It can be your home, or any property you have ownership interest in.

If  you don’t take steps to legally finalize your estate plan before you die, your family could temporarily lose access to any of your property (that does not include a joint owner or state a beneficiary) to probate court.

The probate process is mostly a clerical one, but it could take several months to resolve. You can take steps to avoid probate with proper estate planning.  A revocable living trust, for example, will allow survivors to bypass probate court for any of your assets that can’t be owned jointly, or allow you to specify direct beneficiaries. But you have to legally establish it before you die.

Keeping your plans secret. Once you’ve  prepared an estate plan with a lawyer, the law firm will hold a copy of the documents on file. But they might not be in business forever. The lawyer could die. You might move to several states between the time you prepare the legal documents, and die. Don’t assume you can walk away from your involvement with your estate plan just because you’ve finalized the legal aspect of it.

Once you have planned the details of your estate, let the heirs you’ve designated in your estate documents in on your plans. Ideally, you’ll provide them with a notarized copy of your estate planning documents, and the contact information for the law firm you worked with to finalize them. Some law firms charge a nominal fee to file official estate planning records with the county courthouse. But it could be money well spent, simply for peace of mind that your wishes (and money) will be handled as you intend.

Not planning for living. No one wants to think about being incapacitated or unable to care for themselves, but estate planning isn’t about happy events. It’s about minimizing the stress associated with the less than celebratory ones. Your estate plan needs to include what will happen if you or your spouse come upon the the worst of scenarios, including events that require hospitalization or long-term private medical care, or someone to make decisions about the future on your behalf.

Not making plans for life insurance payouts. Life insurance proceeds are normally included in your estate when you die. But unless you plan appropriately with a trust, that money can be subject to probate.

Five Ways to Dig Out of Your Student Loan Debt

February 5, 2016  |  No Comments  |  by Stephanie  |  Make More of Your Money

dig out of student loan debt

The average student loan debt is upwards of $30,000 for today’s college grad.  How you can possibly establish solid financial footing for the future when you’re struggling to keep your head above water in the now?

Here’s a five step plan to help you dig out from under student loan debt.

Make payments no matter what. You have to make at least your minimum monthly student loan payments in order to maintain your credit,avoid fees, and hold onto the interest rate your loan offers. American Student Assistance, a non-profit group, estimates that 60% of people with student loans miss payments and let their accounts fall into delinquency.

There may be months when missing a student loan payment feels like the easier path, but keep this in mind: You’ll  find yourself in even bigger financial trouble if you miss your student loan payment. Here’s why.

  • Private student loan missed payments could be reported to credit bureaus once the payment is 30 days late.
  • Late Federal student loans may be reported to credit bureaus once they’re past 90 days due.
  • Late payments bring your credit score down (though how much depends on what your credit score was before you missed the payment).
  • Late payments on your credit history (especially recent ones) make it tough to get approved for other credit products, including a mortgage, auto loan or credit card.
  • If you do get approved for a loan with a history of missed payments, don’t expect to borrow at a low interest rate.
  • Many private student loans charge higher interest rate once you miss a payment.

Know your loan options. If you don’t know whether your student loan interest rates are competitive, do some research to understand if you should consider refinancing student loans.  Betsy Mayotte, director of regulatory compliance for the ASA says to add up exactly what you owe, and to whom so you can look into potential repayment leniency programs. Federal student loans offer lots of repayment options based on your income, along with some repayment plans designed for teachers, attorneys,health care workers, and professionals who work for non-profits. Marketplace lenders like SoFi and Lending Club also offer lending options that may help borrow for less than what you currently pay  in interest for your student loans.

Use leverage to your benefit.  You want to get rid of your student loan debt quickly, but make sure it’s your most costly burden. If your student loan rates are  4% but you have credit card debt that costs you 12% interest, for example, you’ll fare better by making the minimum payment on the student loan and being more aggressive with the credit card debt. Simply put, the credit card debt costs you more to carry–even if it’s just $5,000 and your student loan debt is $20,000.

Additionally, some of your student loan interest rate payments may be tax deductible; interest you pay on your credit card debt is not. Once you pay your credit card debt off, you’ll have free up more money to pay down student loans. Then, start using cash so you don’t charge your way back into debt.

Focus on improving cash flow. You can improve cash flow if you’re willing to work for it. There are a lot of ways to come up with more cash: Take on a second job, minimize your costs of living, and/or pay off costly debts.

Start small; identify a fixed number of additional cash you can realistically come up with each month. Let’s say it’s $200. Each month, you can choose to save it, or put it towards your most costly debt. Either way, you’re investing in your future: The emergency savings fund reduces the risk that you’ll have to charge an unexpected expense on a credit card, which could end up costing you even more when you factor in credit card interest charges. Paying down the debt gets you one step closer to reducing what you owe.

Invest in your retirement. Why would you invest in your retirement account when you need money to pay down your student loans? Three reasons: Compounding interest and the power of time, and the tax benefits associated with retirement contributions. You can put up to $18,000 a year into your 401(K) plan, or $5,500 a year into a ROTH or IRA. Both should help to lower your adjusted gross income (AGI), which could reduce how much tax you owe. Plus, whether your student loan interest payments are tax deductible is based on your income. If you’re single, you’ll have to report less than $80,000 to taxable income to claim it.

As far as the power of compounding interest, the little bit you put away each month into your retirement–especially if you invest into stocks or low cost mutual funds should grow over several years. Yes, it may take years to resolve your student loan debt. But once you do, you’ll be glad that you invested simultaneously, so you have a nice chunk of cash waiting for you.


Use Stock Market Dips to Get Out of (or Avoid) Debt

January 25, 2016  |  No Comments  |  by Stephanie  |  Make More of Your Money

stock market dips to get out of debt

None of us like to lose money in a stock market dip. But you can use market downturns to deal with–or avoid–debt.

In fact, the degree of panic you feel when you see that your retirement account balance has decreased is one of the most honest gut checks there is about the state of your financial life.

When a major event we can’t control happens—whether it’s stock market volatility, a divorce, a medical scare, or job loss– we feel vulnerable. Then we realize that maybe we could have protected ourselves a little more—by paying off debt, by preparing for the unknown, or spending a little less.

Consider these questions to get a gut check of current financial state. If it turns out you could benefit from getting out of debt, or managing spending a little better to avoid it, wouldn’t you rather know now?

1. Would your bank account last six months without income?

More than half of us have nothing saved to carry us through an emergency, according to data reported by MarketWatch.

 There’s no question saving is hard when you’re living paycheck to paycheck, or drowning in a heap of debt. But it becomes impossible if you delay putting money aside until a financial emergency strikes.

You will have to turn to credit cards. Or you will withdraw cash early from a retirement account. Or you’ll take out a personal loan with a crazy high interest rate. None of those are good scenarios. In fact, they all cost you so much in the long run that you may never find your financial footing again.

Take an honest look at your savings account balance. If it wouldn’t carry you through six months without a paycheck, you need to find a way to start saving.

Consider the idea this millionaire posed to Inc:

Pay yourself first. Then find a way to pay your bills.

That doesn’t mean you skip on your bills.It forces you to eliminate and minimize the expenses that you can, so you don’t keep giving yourself the short end of the stick. It puts you in control.

2. Do you vacation now, pay later?

Charge your vacations to earn credit card reward points. But don’t charge any trip you can’t pay off in full by the statement close date.

That’s typically three weeks before the statement due date, and is the only way to ensure that your balances paid in full are reflected on your credit report. (If you wait to get your statement, you already missed the date).

 That doesn’t mean you stop taking a vacation. But it does mean you’ll need to allow plenty of time to save for the cost of your trip.

If that means you skip a vacation this year to afford one the next, so be it. A staycation never killed anyone.

3. Do you consider your car’s cost in monthly payments only?

You may be able to afford a $300 car payment. But have you calculated how much you can afford if you consider the total purchase price of the car, divided by the number of payments you’ll have to make until you own it outright?

This math is not completely correct, but for the sake of a simple example, picture this:

The car’s stick price is $25,000.

You can afford to pay $500 a month for the car.

You’ll have to pay $500 a month for 50 months to own the car outright. That’s a little more than four years.

(Remember that does not consider any repairs/maintenance).

Not willing to pay that much for more than four years for a car? Shop around for one with a lower ticket price.

4. Do you know when you’ll be out of credit card debt?

Credit card debt is one of the worst expenses to have, because it’s completely unavoidable. It also grows into a terrible beast until you take control of it.

To do that, you have to know how long it will take you to get out of debt with your current strategy. Plug the numbers on each of your credit card statements into a free credit card debt payoff calculator and know where you stand.

Tiny adjustments—like adding an extra $50 payment to your highest interest credit card each month—can put a huge dent in your debt. The more you do that, the more cash you free up to pay even more. (The same practice applies to student loans, too).

You may not have your credit card debt paid off for years. But you will have a plan. That’s your power.

Only then can you reduce the kind of vulnerability you’ll face when an unexpected financial event happens.

How the Right Friends Can Make You Rich

January 13, 2016  |  No Comments  |  by Stephanie  |  Make More of Your Money


There’s a belief that you become a blended version of the five people you interact with most. But did you know there’s scientific proof that having the right friends can make you rich? Here are some subtle ways the company keep can either build or bust your bank account.

Surface friends can cause you to overspend. In a study called “Social Exclusion Causes People to Use Money Strategically in the Service of Affiliation” published in the Journal of Consumer Research researchers found that people who feel they belong make the same financial choices in a group setting as they do alone.

The study confirmed what most of us know about peer pressure. If you don’t feel accepted with people you hang out with, you’re more likely to take on their tendencies to fit in. So that pricey dinner you can’t really afford or designer bag most people in the group own is more likely to end up on your credit card statement when you don’t feel you’re among real friends. It’s a basic desire to belong. But it can bust your budget if you’ve got spendy surface friends.

If you’re trying to dig out of debt or be a little more selective with where you spend, now’s probably not the time to get together with people you just met (unless they manage their money in a way you aspire to do).

Friends with interest and hobbies are better for your wallet. If you can choose between a friend who loves to shop, or loves to run, pick the runner. Not because hobbies and activities don’t involve costs. Because people who fill their time in ways that don’t inherently involve spending have a positive impact on your sense of happiness and fulfillment. In turn, you’re less likely to spend to fill a void. (If you don’t believe me, feel free to read how I got out of a heap of debt training for my first marathon).

Broke buddies keep you broke.  It’s easier to change your behavior when you’re surrounded by like-minded people. But people don’t have to be physically close to you to have influence–good, and bad.

Back in 2007, The New England Journal of Medicine reported that obesity was “contagious” among friends–including those who interacted only on social media. Researchers determined it’s because social acceptance of any kind helps us justify choices. So if you have a network that approves of your bad behavior (even Facebook friends you haven’t seen in two decades) the less likely you’ll be to change.

But that same social influence can help you make positive changes, too. If you’re trying to save more money or want to get serious about investing, join an online community of personal finance enthusiasts, or a money club.  You’ll have positive role models that will help you stick to your goals, and you’ll pick up new knowledge. That can make you feel more empowered to tackle money woes head on.

Pretend you’re the poor friend to build wealth.  What it means to be rich” or “poor” is subjective, and fluid. What made you feel wealthy in your teens is totally different than what makes you wealthy when you’re 40. But no matter your age or life stage, you’re likely to gauge wealth or poverty based on the company you keep and where you stand financially relative to them.

There’s a theory called “the house money effect” that explains why people make riskier choices when they’re playing with money they perceive as “fun money”. (Hence, the term house money). Its why gamblers keep betting, even when the odds indicate it’s wiser to walk away. It’s why people who make money in the stock market start to take on more risk, or spend more lavishly. It’s also why you spend more when you make more money.

To that effect, if you perceive yourself as one of the richer people you know, it’s also likely that you’ll throw money around more foolishly. Relative to them, you’ve got play money (even if you really don’t).

By all means, strive to be the richest person you know. Just pretend you’re not.

Having a Baby? Here’s How You’ll Start Saving

January 12, 2016  |  No Comments  |  by Stephanie  |  Make More of Your Money

having a baby

Having a baby is an experience you’ll never forget. But learning you’ll  add a new member to your family also tends to bring to the surface important questions that aren’t so easy to answer.

You’ll wonder if you or your spouse can you afford to take unpaid maternity or paternity leave. You’ll start to research child care costs for day cares, in home providers and private nannies. (Then you’ll wonder how you’ll cover that cost).

As pregnancy progresses, you’ll build a collection of toys, clothes, pack and plays, cribs and playmats. Eventually, you’ll wonder if you even have room to bring a baby on board.

There’s also that question of healthcare costs. How will you budget for the new bills you’ll receive throughout your pregnancy, for child birth, and after baby is born?

All legitimate questions. But all ones you can prepare for, and answer.

Here are some budgeting tips to help manage the financial concerns you may face upon hearing the news that you’re having a baby.

Confirm your workplace maternity and paternity leave policy.  Not all employers offer paid maternity or paternity leave. Not all promise to hold your job because you’ve taken time off after having a baby. And not all required to.

Under the Family Leave and Medical Act, full-time employees are entitled to take up to 12 weeks unpaid leave with job protection, including spouses in same-sex marriages. But, there’s a caveat. If you work part-time, you may not be entitled to FMLA. If you are self-employed, ditto. If you have worked for your employer for less or than a year, or work for a company with fewer than 50 employees, FMLA doesn’t apply either.

Unfortunately, no FMLA coverage and/or no paid maternity leave leaves you with few options. You can:

  1. Prepare not to take any maternity leave. (Which is probably not realistic)
  2. Negotiate leave options with your employer, which may include putting in extra hours now, or using accrued vacation time towards your leave
  3. Start saving aggressively now to cover the time you won’t get paid, so you have the option to take off when baby comes.

One important word of warning for my self-employed friends having a baby, or trying to conceive: You cannot use short-term disability insurance as a sort of paid maternity leave. But you’ve read in many credible places that you can? Me too. Then I personally researched the facts.

According to all the insurance agents I spoke with, pregnancy is considered a pre-planned event, even when you secure short term disability coverage before you’re pregnant. Pre-planned events aren’t covered under short term disability insurance. “If I could sell disability plans to cover pregnancy and maternity leave, I’d have retired years ago,” said one agent.

 Calculate where you have to spend, and what you can change. To budget for having a baby, you need to know what you spend each month and on what, relative to your monthly take home pay. As soon as you know you’re having a baby, sit down with your spouse or partner and start tracking your money.

  • Add the total monthly cost of your basic expenses that aren’t likely to change. (Costs like housing, auto loans, credit card and student debt, and utilities).
  • Subtract your total monthly take home pay from the number above.

What remains is the amount of money you  “theoretically” have to set aside for your maternity leave and new baby savings each month. Why theoretically? Because you likely spend money on plenty of non-essential expenses each month. A gym membership, a cell phone bill, meals at restaurants, trip to hair stylists, etc. You may not be willing to slash all these costs, but in theory, you could.

Consider what non-essential expenses you’re willing to eliminate, or at least minimize, so you can increase how much you can save for your new baby.

If your employer offers paid maternity leave of some kind, you may not need to slash expenses as aggressively. If you’ve already saved at least six months of take home pay and have little to no debt, you may have some wiggle room too. But, if you’ll take three months of unpaid leave that your employer won’t pay, you need to save to replace that income in advance.

 Know exactly what you need, and where you stand. Research shows that savers are more successful when they identify exactly how much they need to save. (In total, and each month). They’re also more likely to stick to their plan when they track their progress. Approach how you’ll budget and save for your new baby in the same way.

Keep your money out of reach. When you know how much you need to save each month, establish automatic savings transfers into a savings account that pays some kind of interest, and requires no minimum account balance. You should be able to get to it within a matter of days, but not so easily that you’ll dip into it on a whim.

Use the value of your time. Time is a scarce resource once baby is born. If you have little room to save based on what you currently make and spend, try to find ways to make extra money in your spare time when you’ve still got it. Simple jobs like house sitting or pet sitting give you some extra money to set aside, with little effort and no long-term commitment.

Plan for medical costs. Pregnancy means medical bills–even if you have a completely healthy and run of the mill pregnancy, delivery and baby. Research your health insurance coverage to ensure you know exactly what services are covered, and what your out of pocket responsibility entails.

If your employer offers pretax savings plans for dependent care and you’ll use a child care provider you’ll claim on taxes, take advantage of the pretax savings.