Spring 2014

There is something for everyone in the spring issue of “Financially Speaking.” May your spring season be free of clutter (in all its forms) and full of life!

“That’s been one of my mantras – focus and simplicity. Simple can be harder than complex: You have to work hard to get your thinking clean to make it simple. But it’s worth it in the end because once you get there, you can move mountains.”

–Steve Jobs, Co-founder of Apple

6 Surprising Consequences of Getting Rid of Clutter

When your environment is cluttered, the chaos restricts your ability to focus. Clutter makes you distracted and unable to process information as well as you do in an uncluttered, organized, and serene environment. Below are six unexpected things that happen when you get rid of clutter:

1. You don’t buy things unless they’re awesome
After decluttering – when your stuff is pared down to only what you use and love – you hold every purchase to a higher standard. You’re more aware of what you already have, of what you’ve bought in the past and never used, of what the genuine spaces are in your closet, kitchen, and home. You only feel like buying things you really love.

2. You enjoy your stuff more
The things that survive your declutter seem so much better without all that other stuff suffocating them. Dressing is more fun with the closet clutter gone. Cooking is more enjoyable when your accoutrements are neatly organized. Lying on the couch reading is more relaxing without clutter distracting you. Home is a more fun place to be.

3. You find forgotten treasures
When you get rid of stuff you don’t love, you invariably uncover forgotten things you do love. Your life only has time, space, and energy for a certain quantity of things. Clutter takes up that time, space, and energy, and crowds out the good stuff. Getting rid of the clutter lets you re-discover the precious.

4. You feel happier
Some people say they like clutter and know where everything is. Maybe they do. Maybe they’re in denial. I don’t know. I do know this. I’ve known many people who claimed they were fine with clutter, and then decluttered – and without exception they became elated. Thrilled! They couldn’t believe how good it felt.

5. You feel calmer
Clutter has psychological costs. Maybe you waste time looking for things. Or feel stressed by the visual chaos. Or get embarrassed and avoid visitors. Or argue with your family. Without clutter, there’s that much less in your life to wind you up. You wake up, look around, and simply feel… calmer.

6. You inspire others
We all know that people don’t change unless they want to and that trying to change someone is a great way to get them to dig in their heels. However, making your own changes can have a profound effect on people around you. Your spouse, kids, and neighbors – they can be inspired by your decluttering example and you won’t have to say a word. Those are some pretty cool consequences of decluttering.
So set a date to attack clutter, stay focused, and create more joy in your life!

Special thanks to my favorite online organizational coach, Michele Connolly, the “Get Organized Wizard” for sharing this.

Claim It!

The State Controller, John Chiang, has setup eClaim, a breakthrough online system that reunites Californians with unclaimed property without “snail mail.” At claimit.ca.gov, you can now search for and claim your money entirely online, and expect it within 14 days. Simply search your last name at the website and find out if you have any unclaimed property.

In just three weeks, eClaim has resulted in $1.14 million in payments with an average wait time of ten days. This means that nearly 16,000 unclaimed property owners were able to claim online and quickly receive more than a million dollars without having to mail in forms.
(I personally had a refund from Sears for $7.50 and $43 from DirecTV that I was able to claim electronically. –Kevin)

From The Data Bank

Pepper...and Salt_Tough Negotiating21 is the average number of years people expect retirement to last. (CNNMoney.com)

32 is the percentage of Americans ages 65 to 75 expected to still be working by 2022. (Bureau of Labor Statistics)

36 is the percentage of American millennials (ages 18-31) who live in their parents’ home, the highest rate in at least four decades. (Pew Research Center)

46 is the percentage of all American workers that have less than $10,000 saved for retirement. (Employee Benefit Research Institute)

50 is the percentage of Americans who now cite the Internet as a main source for national and international news. (Pew Research Center)

67 is the percentage of the total $6.6 billion in long-term care insurance benefits that were paid out to women in 2013. (AALTCI)

$650 was the average annual income in America in 1919. (Childrensmuseum.org)

“You have to decide what your highest priorities are and have the courage – pleasantly, smilingly, non-apologetically – to say “no” to other things.”
–Stephen R. Covey,

American Educator, author, businessman, and speaker

CFP Board Releases Reality-TV Style TV AD To Increase Public Awareness

As everyone in the planning industry knows, clients are routinely duped by advisors who are either outright frauds or simply less than ethical operators. Now a new set of CFP Board TV ads aims to make the point that clients can protect themselves by choosing a CFP® certificant.

The ads — which represent the next phase of the board’s public awareness campaign — feature a model and DJ named Azmyth Kaminski; in the ads, he dresses in a suit and tie (and shears his blond dreadlocks) to fool unwitting clients into thinking he’s a financial advisor.

“If they’re not a CFP® pro, you just don’t know,” a voiceover proclaims in the reality TV-style reveal, as Kaminski shows his new “clients” a video of his DJ performance.

The ads, 30-second and 15-second spots, are scheduled to air in 2014 on national cable networks such as AMC, Bloomberg, CNBC, and The Golf Channel, among others.

“The years between 50 and 70 are the hardest. You are always being asked to do things, and yet you are not decrepit enough to turn them down.”

–T.S. Eliot,
American-British writer

Allowance For Kids

I recently responded to a post on my local mothers’ club blog on the topic of allowance and decided others might have similar questions. The original post was from a mom of a 7-year old who wanted to start an allowance, but was uncertain of the parameters to put on it. If you think about it, there are many issues to consider.

At what age should I start? The experts differ on the answer to this question, but the basic approach should be when your child starts showing an interest in money and the things it can buy. Some books say as early as age 3, but I found when they enter Kindergarten to be a natural time when they become more aware of their world and how it works. It’s never too late, so even if your child is older, consider starting one.

How much should I give them? There is no right or wrong answer to this question. Some of it depends on your family’s resources, cultural norms and what you expect them to pay for with the allowance. For simplicity, I follow the approach advocated by one book, which is to give them $1 per year of age per week. So my 5-year old gets $5 per week and my 7-year old gets $7.

PerksShould it be tied to chores? This one really depends on your family’s values and what you are trying to teach them. If your main focus is to teach them they must earn their money, then tying it to chores can make sense. My own approach is that I want the allowance to teach them how to manage money, so I don’t tie it to chores. They are expected to do certain chores as members of our household (e.g., make their beds, take their dishes off the table, feed the cat), but if they want to earn extra money, they can do other jobs that I might otherwise have to hire someone to do (e.g., pick up the apples that fall from our tree). The risk with tying chores to allowance is that the child can always refuse to do their chores if they don’t care about the allowance.

What items should they be expected to pay for with it? This also varies by family and by the age of the child. My young children are only expected to cover any toys they might want between birthdays and Christmas and any candy or treats they crave. My son also buys iPad apps with his allowance. As they get older, I expect to include lunch money, movies and clothes, but then the allowance will need to increase to allow room for these items.

How do you allocate it to various buckets? While some families may view the allowance as pure spending money, many families are trying to teach their children the importance of saving and giving to charity. As such, they might divide the weekly allowance into spending money, long-term savings and charity. If you can get your child into the habit of allocating a portion of their money to savings and charity, this will serve them well as adults. There are no correct proportions to use either, but try to make it somewhat realistic with what you might want them to do as an adult. I also try to use proportions that create easy amounts for dividing. For example, my daughter’s $5 allowance is split as follow’s: $3.50 spending money, $1.00 savings, $0.50 charity.

An allowance is a critical component for teaching your child to be financially responsible. It’s never too late to get started and you can always adjust the parameters after you see what works best for your family. As with much in life, there is no right or wrong answer, the important thing is to just get started. If you wish to read more on the topic of how to teach kids about money, I recommend Raising Financially Fit Kids by Joline Godfrey.

Special thanks to Tanya Steinhofer, CFA® and CFP® of Redwood Grove Wealth Management, for sharing this.

Office Notes

Inspired Financial has created a new video that talks about why Evelyn founded Inspired Financial and what Inspired Financial is all about. The video is featured on the homepage of our website. www.inspiredfinancial.biz Check it out!

We have hired a new intern, Laurie Dubchansky, to help us through tax season and then work on some special projects this summer. One large project is to migrate to a new client relationship management system. She has brought a positive energy to the office and we hope you get a chance to meet her.

Kevin has been co-leading the Financial Planning Association of Orange County’s NexGen group. The last panel discussion had two prominent financial planners in Orange County share their knowledge and wisdom to a capacity crowd.

Evelyn and Mark’s daughter, Alison, will graduate with her MBA from the University of Virginia on May 18th. In July she will join M&T Bank’s internal consulting group based in Buffalo, NY. That makes three kids with three graduate degrees in two years. They are so done with schooling (Evelyn and Mark too!) and ready to launch into their careers.

Evelyn and Mark are looking forward to an exotic cruise from Mumbai to Athens on their annual, post-tax season vacation. In addition to the usual good food, good wine and lots of reading, they’re looking forward to scuba diving in new locales and seeing Luxor and Petra.

We hope you enjoy this beautiful season and we remain grateful for your trusted relationship.

Your Team at Inspired Financial

Note: The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) or strategy may be appropriate for you, consult with your attorney, accountant, financial advisor, or tax advisor prior to investing or taking action.