Instilling Financial Literacy For Kids In Des Moines

Instilling Financial Literacy For Kids In Des Moines

Memorial Day weekend can often feel a little disjointed.

There we are with our burgers, our pools, our picnics — all while we are supposedly remembering the sacrifice of so many thousands who laid down their lives in the line of duty for this country, and for the sake of our constitutional freedoms.

However, when you talk to veterans from Des Moines (as I get the chance to do in the course of our tax preparation work), they do often tell you that these very freedoms (the ones much bigger than backyard barbecues, of course) are exactly why those sacrifices are worthwhile.

So I suppose that despite how jarring it can feel, parades and picnics are exactly the right sort of thing to honor those men and women who made the ultimate sacrifice.

And so we pause and remember.

Memorial Day is much more than simply the “start of summer”.

Moving forward … now that summer *is* here, for many Des Moines families, children are much more “underfoot” than they are during the school year.

So I have an idea for you: Might I suggest the summer to be the PERFECT time to rework your children’s relationship with money? Here are some thoughts on financial literacy for kids that might help start the conversation…

Instilling Financial Literacy For Kids In Des Moines
“Adversity doesn’t test character, it reveals it.” James Lane Allen

Teaching children to save money when they’re young can help them deal with financial emergencies when they’re older. Here’s how to get them started, even this summer…

Encourage kids to save *something* over the summer. 
Whether you’ve got a 10-year-old stashing away a dollar or a teenager opening a savings or checking account, get your children in the habit of saving no matter how small the amount. Start them small over the course of the summer, and have them build towards something for the end of the season that will be a real treat.

Help kids balance treats and sacrifices. 
Work with your kids to set and meet small goals, which will allow for small indulgences along the way. Once these smaller goals are met, allow them a little withdrawal to buy something for themselves. Go for the little victories in the beginning.

Instill the idea of an emergency fund. 
Loose change can add up, so don’t let kids toss pennies or leave them lying on the ground. These can become the perfect seeds for the concept of an emergency fund (which will help them as they grow into adulthood).

Set an example. 
Children don’t miss much. If they don’t see you saving, they might wonder why they have to save. Share with them what YOU are saving towards so they can see the process of building towards a victory.

Keep kids away from credit as long as possible. 
Credit card companies expend lots of effort on marketing to teenagers. And with the rise of app-related money systems, many children with smartphone access have even readier availability to the kinds of “time-saving” money traps that so often ensnare adults. Make sure your kids understand what credit pitfalls could lie ahead.

Schedule money meetings. 
Meet with your child at regular intervals to discuss their savings and emergency accounts, answer questions, and discuss money issues he or she might encounter. Especially if they are working a summer job in Des Moines, helping your children to see where their money is going over each month of the summer will help them to get financial clarity.

Which of course, leads to…

Help children set up a real budget. 
The earlier that young people learn to manage a budget, the easier things will be down the line. Younger ones can start learning by jotting their pluses and minuses down on a piece of paper, while older kids can be introduced to budgeting on software and apps.

The main thing is that you should not rely upon “school” to train your children in financial literacy.

And the summer is a great time to get started.

Warmly,

Ann Hartz
(515) 707-0884
Ann M. Hartz, CPA

How To Manage Money For Des Moines Millennials

How To Manage Money For Des Moines Millennials

I’ll tell you what…

The month of May is beginning to look a lot like December.

Definitely not because it’s cold out there, but with so much “end of school year” stuff happening these days, from graduation parties (ranging from pre-k “graduations” all the way up through college and beyond), to weddings (both royal and otherwise), to sports seasons wrapping up, to Memorial Day plans … well, I know some Des Moines parents who are longing for those “quieter” days during the winter holiday clamor.

I guess we all find ways to look ahead, and OUT of our current circumstances.

Which is why I’d like to take a moment and address my younger readers today. Specifically the recent graduates, but really anyone on the sunnier side of 30 years old.

Though, to be clear, this is advice that would behoove you to pay attention to, no matter your stage of life.

How To Manage Money For Des Moines Millennials
“Age is a very high price to pay for maturity.” -Tom Stoppard

One thing not often taught in schools is how to manage money and prepare for retirement.

Many students, whether they attend college or go straight into the workforce after high school, don’t grasp the importance of saving for later in life and are waiting too long to start stashing away money for retirement. When we start working with younger Des Moines clients, these are the sorts of things about which we have conversations…

Think about saving before a life event forces you to. 
Major life events such as the death of a family member, being laid off from a job, or a debilitating physical injury can occur before we consider the impact they could have on our financial future.

Don’t be caught off guard. Begin to build a nest egg to ensure the financial security of your (future) family.

Technology can’t replace the human touch. 
For all the conveniences that technology provides us, it still can’t replace the experience of a connection with another person.

An experienced personal financial advisor can ask the right questions, provide ongoing guidance, and be an important resource for those who want to plan for retirement. A computerized advisor or even a live advisor supporting an automated advisor service often doesn’t deliver the same depth of advice or relationship.

Don’t give up too quickly. 
Let time be your ally.

Investing in the stock market with retirement savings can feel like a roller coaster ride. There will be plenty of ups and downs, but the descent is no time to jump off, even if you do get jittery. Market history suggests that eventually things may work out, if you allow enough time.

Think about taxes before they think about you.
In the early years of your career, taxes seem more like a mere inconvenience than a tangible thing to plan around. But the reality is that you can set up your financial life NOW to prevent your future self from having to pay more taxes than you ought.

Whether that’s starting in on a Roth IRA or other tax-savings strategies, don’t be fooled that the larger standard deduction moving forward will suffice for you when your career reaches maturity. Get advice now for how you can plan ahead for whatever comes.

I wonder if you know someone who can help you with that?

Warmly,

Ann Hartz
(515) 707-0884

Ann M. Hartz, CPA

Ann Hartz’s Three Tips For Resisting Financial Process Automation

Ann Hartz’s Three Tips For Resisting Financial Process Automation

Did you see Google’s demonstration of their new virtual assistant technology, Duplex, last week?

If you did, like me, probably you were both amazed … and a little bit terrified of the implications. Essentially, Google is close to figuring out how to make it so that machines and robots can engage in regular human interaction — with the human being oblivious of the fact that they are engaging with a machine.

 (And apparently, I wasn’t the only one troubled by that concept, as Google quickly appended their policy by stating that their robots would indeed self-identify as such.)

 The fact is that we are barreling down the road towards ever-increasing automation, and only recently have people begun to pull off to the side for a moment and ask themselves: is all of this automation, speed and convenience a good thing?

 These are questions worth pondering as a society, as families in Des Moines, and even for the sake of our own souls.

 And, as I will posit to you today, for the sake of our wallets.

 But before I get there, and speaking of wallets, just Monday of this week, the Supreme Court struck down a 1992 law that outlawed sports gambling at the federal level. Which means that state and federal treasuries are about to salivate over all of the new tax revenue that legalized sports gambling might bring.

 It was a 7-2 decision. So, if you were on it at -4.5, you’re a winner.

 

<Groan>

 Sorry, couldn’t resist.

 And speaking of groan-worthy segues, it might prove to be a very good thing for you to resist the steady snowball of robot automation within your personal finances.

 

Here’s what I mean…

 Ann Hartz’s Three Tips For Resisting Financial Process Automation

“As our circle of knowledge expands, so does the circumference of darkness surrounding it.” – Albert Einstein

 What if we thought differently about autopay?

 What if we were to take a moment to consider the consequences of so much convenience, not just with scary robots intersecting our daily lives, but for the sake of what it might be doing to our pocketbooks?

 Small business owners in Des Moines and those with more complicated incomes know what it is to write checks for quarterly taxes, and, I believe, they tend to have a deeper sense for what they are paying, as a result.

 In fact, I think our country would be a different place if everyone had to write a personal check and send in their taxes like this. If people really saw what they pay (or don’t pay) I think they would feel differently about their tax burden.

 This is a common refrain among certain political observers — but it has me thinking about what it might mean for YOUR family …

 In fact, this is part of the genius of financial guru Dave Ramsey’s “envelope system” for family budgeting (whereby you place cash into specified envelopes, and pay only as much cash as remains in the envelope for different budget categories). “Automating away” our obligations can lull us into financial slumber.

 Which is why I now propose that you REMOVE financial process automation from certain checks that you write each month. (Again, this is aside from automated savings, as I’ve previously discussed.)

 Now, allow me to interject a word of caution: The only danger to this approach is that you run the risk of focusing too much on scrimping pennies. I certainly advocate wise budgeting, but it’s important to remember that thinking overmuch about saving money can constrict your mind away from important “risks”, which can often be worth taking — like starting that business, making a new investment, etc. Don’t let this technique keep you from expanding your financial mindset.

 

So, here are a few suggestions for what you might DE-automate, for the sake of personal clarity:

 1) Just once, receive your paycheck in cash (instead of ACH’d), or cash the full amount when you receive it. Because, have you ever HELD one paycheck’s worth of money before?  It’s really hard to fully comprehend how much you’re bringing in until you physically feel those stacks of $20s in your hand. I can guarantee you it’s a lot harder to spend it when you’re seeing it in person rather than online.  And it hurts frittering it away more, too.

 2) Pay your mortgage manually. Feel the burn of this large check, every time you write it. It will trickle into how you think about the other bills which you pay such that even if this is the only bill you take off of “auto-pay”, you’ll be wiser with your remaining funds each month.

 3) Only purchase vehicles for cash. If you had to pay outright, wouldn’t you end up with a cheaper car? Probably. Just because many are used to setting up loans and payments for vehicles, does NOT mean it’s wise — in fact, this is one of the primary markers for the “quiet millionaires” (those who are getting ahead financially, even on relatively smaller salaries). Yes, your pride might suffer when you’re not rolling around in a 2018 Audi through Des Moines … but considering the real cost of that vehicular pride-booster does wonders for calming your egoistic tendencies.

 

In short, paying in cash (or with a manual check) helps you to consider the following questions:

 * Is this ____ still WORTH it?

* Is there a way I can cut it down a bit?

* What’s the best way to pay for it right now? (c/c, check, cash?)

 

Again, some of this could literally take seconds, but the point of it all is that you STOP to think about it. With automation, you don’t get the “ping” every month because it’s already doing the thinking for you.

 You’ll learn a LOT more about the financial “you” this way than you would otherwise, I’m certain.

 It’s really about paying closer attention.

 And we could all use more of that in our lives.

 

Warmly,

Ann Hartz

(515) 707-0884

Ann M. Hartz, CPA  

A 12-Point Financial Health Check For Des Moines Families And Individuals

A 12-Point Financial Health Check For Des Moines Families And Individuals

We are now fully engaged in our tax “off season” here in Des Moines.

But interestingly, this is where the real difference that we can make on behalf of our tax preparation clients is actually made. We’re diving into the new tax legislation, and attending classes (online and in person) to get clarity, even as the IRS releases various new guidances for how to implement the new legislation for our Des Moines tax and accounting clients.

As for our actual tax work, we’re focusing on extended returns, amendments, and working with Des Moines business owners and families with year-round concerns. If you are interested in finding out more about what we can do for you NOW — like proactive tax planning to reduce your future taxes (especially in light of the new tax law), feel free to shoot me an email through the link at the top of the page.

As I’ve already communicated, we are so grateful for our clients for making this tax season our best ever. Seems that many of our current clients’ friends needed a “port in the storm” this year.

Now, this week, I have an idea I’d like to propose to you. I believe it could help you in multiple ways: with your family’s monthly bottom line, your taxes … and even your mental health.

Let me know what you think.

A 12-Point Financial Health Check For Des Moines Families And Individuals
“You can accomplish much if you don’t care who gets the credit.” -Ronald Reagan

If you’re like most people in Des Moines, I bet that when you get your house insurance renewal notice, you quickly glance at the price — and renew it. You renew it simply because you don’t have the time to search around for better prices.

In my experience, working with family finances for YEARS, I’ve learned that most people in Des Moines have a good sense of what needs to be done to improve their finances but they simply cannot find the time.

So here’s my proposed solution for you:  Take a day off work.

In fact, many financial tasks simply cannot be completed in the evening or on the weekend. By taking a day off work, you can contact people who may only be available at regular business hours.

On top of the true bottom line impact a day like this could create, there is, of course, the “mental health” aspect of it all. HR professionals often recommend taking a mental health day, from time to time. Well — call this your “Fiscal Health” Day.

Possible tasks to consider accomplishing on your day off:

1. Dump your savings account with a puny interest rate and open a high yield savings account.

2. Get quotes for cheaper insurance: health, life, auto, house, and any other insurance. And you can even do a little calculating to determine how much you could save by changing your deductible. Even better —  a good broker can do all of this shopping for you.

3. Complete the most important (but not obviously-pressing) financial tasks like making a will. Best done with a professional in Des Moines, by the way. 

4. If you’re carrying credit card debt, call the companies and ask them to reduce your credit card interest rates. Believe it or not — they’ll often say yes. Take time to develop and formulate a good plan to get out of credit card debt. Find or prepare a debt reduction plan.

5. Get more organized with your finances by shopping around for and using a good personal finance software program. Mint, YNAB, and Quicken are all good options. There are many more.

6. Review your budget, get caught up on your budget, or learn how to budget.

7. Shop around for the best online financial broker. Be sure you’re getting the best price for your stock trades.

8. Make energy efficient changes to your home and lifestyle.

9. Find a quality second-hand store to shop at, as an alternative to the local department store.

10. Set up automatic payments for your bills, to be sure you avoid late payments.

11. Sell your junk on eBay. Look for junk lying around the house and list it. Or use a service like 1-800-GOT-JUNK, and have them come to your house. You just point at the stuff you want to get rid of (warning: this is a little costly, but it can be gratifying).

12. Make sure that your taxes were handled properly.
Undoubtedly, there are more things which can go on this list, if you’re industrious about it. But simply put, I’m hoping to give you “permission” to see your financial health in a similar light as you see your mental health.

Warmly,

Ann Hartz
(515) 707-0884
Ann M. Hartz, CPA

Four Tips For Des Moines Couples To Make Money and Marriage Work Together

Four Tips For Des Moines Couples To Make Money and Marriage Work Together

It seems like crooks these days keep finding new ways to trick people here in Des Moines into giving them more money.

And no, I’m not talking about Congress.

Last week, for those of us in the tax professional world in Des Moines who are paying attention (because let’s be honest — many of our colleagues are still on vacation), we got bombarded by the official IRS channels and other such voices that there is a new scam afoot. Essentially, the thieves are now “spoofing” the numbers they are calling from so that the incoming call seems as if it is originating from an actual IRS Taxpayer Assistance Center. And then, if the taxpayer questions them, they direct you to IRS.gov to look up the local TAC office phone number to verify. They then hang up, and call back a second time — now armed with the taxpayer’s trust.

Allow me to remind you: IRS employees at TAC offices do not make calls to taxpayers to demand payment of overdue tax bills. There are certain instances when the IRS does call a taxpayer, but never before sending multiple notices in the mail.

Don’t give in to threats, and don’t fall for this one.

Now then … May is here. And the season is definitely shifting.

In fact, I do believe we are headed into wedding season here in Des Moines.

And the fact is, an overwhelming number of failed marriages from Des Moines cite financial troubles as a major factor in their breakup. As sad as this is, it really shouldn’t be too much of a surprise, because the way we use our time and money reflects our values.

And, of course, without a strong set of shared values around money and marriage, marriages drift apart. But I’ve seen how dealing with finances together can actually bring a couple closer — not farther apart.

But it matters how you approach it. Here are some thoughts, heading into this wedding season. Perhaps they would be useful for a young couple in your life… (or maybe you!)

Four Tips For Des Moines Couples To Make Money and Marriage Work Together
“The only way to have a friend is to be one.” -Ralph Waldo Emerson

Many young couples start out married life without a clear idea of how to handle their finances — leading to stress, arguments, and long-term marital problems.

And correspondingly, there are some couples for whom finances have become a painful wedge. So, though I don’t fashion myself to be a “marriage expert”, I have seen many financial partnerships work well … and more than I’d like, of those that didn’t.

Here are some ideas for you, as well as a little gift idea at the end.

1. Don’t avoid the hard stuff.
Whether you are in a pre-marriage stage, or are already working through your partnership, it’s crucially important to learn the skill of conversation about finances. There can be so much mental anguish over shame, fear, and past pain that unhealthy communication patterns begin to emerge.

So give yourselves the gift of honesty, and make a list of hard topics that you can tackle over time.

As an example, many couples from Des Moines are afraid to talk about the three D’s: debt, death, and disability. Take time to discuss these fears instead of avoiding them. Planning will help you both feel better.

2. Talk through your different money backgrounds.
How we were raised has an enormous effect on how we deal with money. Depending on what your home was like as a child, you likely heard many different attitudes expressed around the dinner table, and they have undoubtedly shaped your financial paradigm as an adult. Whether from poverty, or from abundance, your background is extremely powerful.

So, if your money attitude differs from your spouse’s, talk about how you were raised  and work toward a compromise where you can strengthen each other’s weaknesses.

3. Put yourself in each other’s shoes.
If one of you usually pays all the bills, switch for a couple of months. You or your partner may get a crash course on how much running the household actually costs. Keep track of all spending for at least one billing cycle (usually one month) to actually see where your money is going, and decide which expenditures can be decreased or eliminated. You might even find opportunities to give.

4. Maintain (small) independence.
A joint checking account is useful, but maintain some kind of separate amount of money as a “slush fund” of sorts, whereby you can each make purchases without mutual consent. Keep these amounts small (you always want partnership in the big amounts), but a sense of independence (however symbolic) will help both of you feel you have equal footing in the relationship, even if you have a big difference in salaries.

5. Work together to build something financial.
Find a way to work together on a small, money-related project, whether playing the stock market or saving towards some small goal. Pick something that doesn’t carry emotional weight, and see it as an exercise. You’ll find that working together in a small way will help you in a BIG way, as your decisions become more significant.

6. Agree together that you won’t lose on your taxes.
Obviously, this is what we are here for, and perhaps one of the best gifts you can give yourselves is a workable plan as it relates to a tax strategy.

And maybe the best place to start is to make sure that your taxes were handled properly.

Warmly,

Ann Hartz
(515) 707-0884

Ann M. Hartz, CPA 

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