A Financial Education Event
     

Consumer Confidence Lowest in 35 Years–A Bad Thing?

According to today’s latest bulletin, consumer confidence data measures at a 35 year low. That means when boomers were wearing hiphuggers and halter tops, listening to ZZ Top and the Eagles and lamenting the hedonistic value of vacuum cleaners–consumer confidence was as bad as it is now. So it’s the worse it’s ever been for at least two generations of consumers.
We may be in for a Marathon rather than a 50 yard dash when it comes to economic recession. Before you assume that this is a hopeless race for which you are ill prepared, let’s look on the upside of the downside of today’s news.

  • The Stretch – When my husband and I married 20 years and five kids ago, I inherited $40,000 in consumer debt from his divorce. The upside was that I got two great stepdaughters out of the deal. But a total of seven kids to support and lots of debt was not fun for this broker-turned-bride. It was a stretch for me to give up my well paying career and take on the challenges of being a SAHM while trying to pay down debt on my husband’s military salary. But being stretched isn’t a bad thing, it gets us ready for the next phase.
  • Flexibility — One of the ways this business backgrounded mom made ends meet was to become flexible in the way I managed money. I developed a sophisticated method of recognizing ways to save on everything from clothes to corn to cars–and it worked. Flexibility did not include miserly, cheapskate, wierd ways of saving money–like collecting tin foil balls or taking other people’s leftover pizza home at a restaurant (my parents generation did that kind of thing). No, I preferred the savvy savings approach that didn’t embarrass me or my family. I still wear Calvin Klein suits bought at the Nordstrom Rack for the same price as a Jacqueline Smith (disposible) suit other people would purchased at K-mart. (I don’t shop at K-Mart–ever!) But… I do have a Wal-mart brocaded jacket that gets more compliments than my designer suits! It’s all about savvy choices. In today’s economy, there’s a couple of generations of consumers who can step up to the starting line and learn this same kind of “saving money is cool” approach to life.
  • Endurance — What did the easy-credit, low mortgage rates of the past few years do for consumers? Did it make couples stop arguing about money? Did it put their kids through college debt free? Did it improve their quality of life–especially NOW in light of today’s recession? No, it didn’t make life better, it only made it easier to get into debt by having a house that owns you (too much house) or escalating credit card bills that are cushioned with the idea that “my home equity can pay these bills if I get in a pinch.” BAD, real bad. Now that the equity has deteriorated, it’s time to learn the endurance part of running the great race. Learning how to cut back, curb impulse buys, be thoughtful and strategic in your spending and implementing a little-known thing called “self control” in money issues is a good possible outcome for a bad pronouncement. It depends on the choices consumers make at this point in time.
  • Finishing Well — David Bach’s best selling book, “Smart Women Finish Rich” is a must read for all consumers (guys can get in touch with their feminine side and make a buncha money in the process–just look at Tyler Perry). Finishing well, means finishing rich but being rich may not mean having a multi-million dollar home or a self-propagating portfolio. We all know miserable misers who saved themselves into delusional denigration (ever heard of Howard Hughes? Being rich can drive you nuts!) The kind of wealth I think most Americans want is to have a nice home that will be paid for at retirement, put their kids through college debt free and have the ability to pay the bills without worrying about nastygrams from creditors. That’s rich, baby!
  • The Winners Circle — OK, time for true confessions. My husband and I recently competed in the LA Marathon and finished. I didn’t end up in the winners circle, but they create a similar circle for EVERYONE WHO FINISHES. You get a rose, a medal, & a sports massage. So, with my swollen toes, wilting rose, cramping calves and smiling husband, I could say as a forty-something year old mama of many–I finished the Marathon. Just don’t ask me my time. There’s a lot to be said about the finishing the process. If consumers will embrace the economic challenge that a 35 year low in confidence presents, then it can be a good thing. New generations of consumers, who have never had to put on their big girl panties (or big boy underwear) will have to step up and learn a thing or two about managing money and avoiding credit. It can be done and it can be done well so that we have a whole new circle of winners.

Run well, finish well, then celebrate!

Ellie Kay

America’s Family Financial Expert (R)

http://www.elliekay.com/

Twice As Stimulating!


The check is in the mail. The check is in the mail. Oops!

Can you remember the check you waited the longest to receive? Maybe it was your college roommate who borrowed $300 and “promised” to repay you within the month–some three years later you’re still waiting. Or, it might be a deadbeat relative who is always wanting to borrow “just the rent money” and amazingly seems to be near homelessness without your check. But the next time you see him, he’s driving a new Mercedes–that’s a check you’re never going to see.

Well, this year, Uncle Sam really DOES have the check in the mail–sometimes twice! Through June 6, the U.S. Treasury had sent 66.6 million payments totaling about $56.8 billion. Altogether, an estimated 130 million payments will be made this year. A hand full of people are getting a SECOND stimulus check in the mail. Don’t take that as God’s way of telling you to put the money down on a new Mercedes!

If that happens to YOU, then don’t think it’s a windfall from a doubly generous Sammy. The IRS will eventually catch their mistake and come back after you for the money. If you get the check, write “void” on the back of it (under the endorsement section) photocopy it for your records and return it to the IRS with a note indicating it was a “erroneous stimulus check.” You should mail it to your regional IRS office where you filed your return http://www.irs.gov/file/content/0,,id=105693,00.html
This isn’t just a matter of being honest, it’s a matter of saving a huge headache in the future when you’ve spent the second check and the IRS is wanting it back post haste!

So much for twice as stimulating!

Ellie Kay
America’s Family Financial Expert (R)
www.elliekay.com

Wall Street Meets Main Street

The only thing worse than being associated with Wall street these days is being a Wall-Street-type going back to your college reunion. I’ve been remiss in posting the last couple of weeks because I’ve had back-to-back-to-back trips. The first leg was for my husband, Bob’s, Air Force Acadmey reunion.

We saw generals, astronauts, corporate CEOs, airline pilots (lots of those) and even an occassional wayward fighter pilot or two. Bob clearly had the most enviable job–as a test pilot for the Sabreliner and F-4 fighter jet.

At this reunion, the week the Dow fell south of the equator, the least enviable job was that of a financial investor. Most of these Wall Street guys had a good attitude, but Bob and I spent a painful 20 minutes with one Financial Management guy who spent 1/2 the time talking about how rich he was (yeah, I believe THAT) and the other 1/2 about how smart he was to own the company. Bob tried to interject, “Well, Ellie works in the financial area as well–she’s an author, speaker and media personality.” He took one very condescending look at me, tightened his lips, raised his eyebrows and looked as if the idea of listening to me talk about my work would be as pleasant as the thought of having to stand in for the “Naked Cowboy” in the middle of Times Square. I spared him. Instead I said, “Bob, he probably needs to go and catch up with other class mates, if he wants to know more about me, he can go to my website.”

The vast majority of Wall Street is so disconnected with Main Street. Their main interest is “my accumulated wealth, my ambition, and oh, yeah, ME.” But then came the second leg of my back-to-back-to-back trips–Fort Polk, Louisiana or Main Street America. At this post, 85% of the soldiers are deployed NOW. They brought me out to speak at a spouse’s conference that the leadership put together to help these (primarily) women deal with: 1) their finances and 2) the life and death aspect of their role as military wives. Just before I came to town,we got word that the post lost a soldier. So when I spoke, behind me on the platform, the stage was set up for a memorial service for the staff seargant who was killed in Iraq and left a wife and three kids. The memorial was to be held in the same building where we had our event. My message was practical and purposeful and one that gave hope in the midst of their real world life.

The next day I spoke again to another group on post. One of the women came up to me and said she had talked to her soldier the night before from Iraq. He said, “let me live vicariously through you, what did you do today?” She told him about the spouse’s conference and some of the funny stories. He laughed. She also told him about other aspects of the presentation and said, “She made me laugh. She made me cry. She made me proud to be an Army wife.”

He asked her to give me a message, knowing she would see me at the event that day. “My husband wanted me to tell you” she smiled shyly, “Thank you for making my spouse laugh. Thank you for making her cry. Thank you for making her proud to be my wife.”

When it comes down to working on Wall Street or working with those on Main Street. I think you know where I choose to live. Later this week, I’ll talk about the final leg of my back-to-back-to-back trips (hint, it involved Times Square and the good news was Bob’s broker classmate wasn’t there!)

Ellie Kay

America’s Family Financial Expert (R)

http://www.elliekay.com/

An Economic Victim–The American Marriage

When our daughter, aka “Bunny” was three years old, she was convinced she would marry her Papa when she grew up. He was and is her hero.

Well, Bunny’s hero (Bob) and I went to see the movie about another hero who was a firefighter featured in “Fireproof” http://www.fireproofmymarriage.com/ . It was made for $1 million dollars and as of this morning had grossed $20 million, a certifiable and unexplainable “hit” by Hollywood standards. The New York Times reviewer said: “Fireproof may not be the most profound movie ever made, but it does have its commendable elements” and “But the cast of mostly amateurs (Mr. Cameron of “Growing Pains” being the exception) is surprisingly good.”

During the movie, I laughed, I cried, I cringed (at some of the acting). But we left feeling that three couples we know, who are on the brink of divorce, should see it and maybe it would save their marriage.

Saving marriages is also a big part of my work, believe it or not. When the number one reason cited in divorce is “arguments over money” I wanted to see if this “marriage movie” dealt with economic issues. Money made its appearance, when the main character put his money where his mouth was and as a result, his wife returned to their marriage.

With an eye on the economy, we need to talk about keeping an eye on one of the main victims of difficult economic times–the American marriage. Believing that communication about money matters is the key, I developed the “Money Workout” which dedicates one hour to talking through your money issues with your mate. It has made a huge differences in marriages and if you want a copy of this workout, just email assistant@elliekay.com and put “Money Workout” in the subject line.

Don’t let the economy make your relationship the next victim, fireproof your marriage.

Ellie Kay

“America’s Family Financial Expert”

http://www.elliekay.com/

Texas to Toronto – From Ya’ll to Eh!

My “Living Rich for Less” book tour took me from my original stomping grounds in Texas all the way to the frozen white north of Toronto. I tend to adapt easily to my surroundings, so when I did TV shows in Canada, I found myself saying, “The thing aboot finances if that you have to stay on top of them, eh?”

In Dallas, I had to keep myself from saying, “Hey ya’ll, I’m fixing to tell you some thangs that are gonna help you a bushel with yer money.” But somehow I managed and you can see some of these clips to get short, pithy and helpful hints that will help to save you $30,000 in 2009! This was on CBS NEWS You be the judge and tell me if you think the Financial Expert or the Texan took over in these interviews!

Ellie’s personal story: Runs 2:40
– Ellie on the economy: Runs :43
– How to save on Homeowner’s Insurance: Runs: 1:51
– How to save on Auto Insurance: Runs 1:31
– Grocery Savings: Runs 1:14
– Restaurant savings: Runs :55
– Saving Is Cool: Runs: :24
– Tips on Refinancing your mortgage: Runs: :47
– Charitable Donations: Runs: 2:09

I’ll be back to Texas to do shows for CBS “Prime Time” (interactive perhaps?) and other shows on March 19th–so stay tuned!

Hey ya’ll, check back again for more helpful hints on my blog, eh?

Ellie Kay
America’s Family Financial Expert

Ellie on Neil Cavuto — Financially Pinched Companies Pinch Employees

Goodyear Tire announced that they were reinstating their 401(k) program after cancelling it in 2003. But it’s not the “good news” it appears to be because at the same time they froze more traditional pensions, thereby saving hundreds of millions of dollars at employee’s expense! So what do YOU do when your company cuts benefits–do you have a recourse?
Basically, you take charge. You don’t rely on your company to be your uncle sugar, you realize that you have to rely on other resources that are available to you. Today, I shared this on Neil Cavuto
1) TAKE ADVANTAGE WHILE YOU CAN: Invest in your 401(k) if/when it comes back into play. Companies are reinstating formerly suspended 401(k) plans. These may come back for six months, a year or longer. TAKE ADVANTAGE OF THE MATCHING PORTION up to the the % the company allows (usually 4% or 5%). Even if they are only matching 25%, that’s a much better percentage than what you can make on your money in today’s market.
2) TAKE MATTERS INTO YOUR OWN HANDS: One of the things that companies are doing is kind of a bait and switch tactic. For example, they may be reinstating 401(k)s but they are coming in the back door and cutting pension programs that are far more costly. It used to be that you could cound on social security and your pension to retire, but that is no longer true during a recession. Therefore, you need to fund your own retirement through Roth or Regular IRAs or even a SEP IRA (Simplified Employee Pension) if you or your spouse own a small homebased business. Max out the amount you contribute to your IRA based on your age (up to $5,000 for a traditional IRA or $6,000 if you are over 50) and don’t trust your company to fund your retirement.
3) TAKE CARE OF YOUR OWN HEALTHCARE: Just about the time we find out that healthcare costs are rising 7% to 8%, we also find out that more and more companies are cutting healthcare benefits. Yesterday was the time to check into a high deductible individual or family plan with an HSA (Health Savings Account). For example, if you’re an individual and have a $2900 deductible on your health insurance, you can tuck up to $2900 into a tax favored HSA account. If you’re a family you can contribute up to $5800 per year. These tax favored funds are not the old fashioned “use it or lose it” rather they are your funds that will be rolled over from year to year and can eventually be used at retirement. Premiums for this high deductible plans are about half what a costly group plan can cost you and your family, so now is the time to have that safety net of covering the big medical expenses while not trusting your employer to be there for you when it comes to healthcare.
4) TAKE IT TO THE TOP & BE THE TOP: Employers still want to attract and keep the best talent. Show them you are not the weak link and make yourself indispensable. Go the extra mile, do quality work, bring in business, get along with your peers, support your boss and make sure that YOU are the talent they want to keep.
5) TAKE THE HIGH ROAD: If you are in the position of having to accept a severance package realize that you can still negotiate it. You can often test the wiggle room to get a higher amount and you can determine whether you take a lump sum or a longer payout. You also need to be sure to negotiate for longer lasting health and life insurance benefits. Don’t sign any papers the day you are let go and don’t make any rash or emotional decisions. Take a breath, take your time and realize that you still have options.

Ellie Kay

America’s Family Financial Expert (R)

MAJOR MEDIA – Couples Money Workout

One of the most requested files I have is for my “Couples Money Workout” as it is helping save marriages by giving couples a tool to discuss money matters without throwing food or calling in the SWAT team. I recently recorded a segment with a fabulous couple, Chris and Kathy Hansen, for a major media news show. Once it’s going to air (later this month), I’ll announce the show and the date.

When Bob and I were first married we didn’t like to say that we “argued” about money. Since he was a born spender and I was a born saver it was natural that learning to manage money as a couple would require a certain amount of give and take—but the word “argue” was just kind of negative for newlyweds like ourselves. So we called it “intense fellowship” instead! We learned that there was a right way to approach this dreaded topic and a very, very wrong way.
One of the things I did before I talked about the One Hour Money Workout for Couples, with the Hansens was to play a game—the Newlywed game, in fact! You can do this by getting 12 pieces of paper (or cardstock) and two big markers (like they use on the show) and get ready to learn some things about your mate! Answer each of the following for yourself and your mate and have your partner do the same thing.

1. Complete the sentence, when it comes to money, I wish my partner would stop _______.
How do you think your spouse answered this question? ___________
2. If you won $1000, what would you do with it? ____________________ How would your spouse spend it?____________________________
3. How would you answer this statement (circle one) “I would rather have: money * beauty * brains.
What would your spouse circle?________________
As you answer these questions, I think you’ll find that you and your spouse are different. You may discover that you didn’t know as much about your mate as you thought you knew or vice versa! But part of any healthy relationship is realizing we are different and we can give each other permission to have their own thoughts and feelings about financial matters. The goal, whether you are a newlywed or you’ve been married forever, is to communicate effectively about money, get on the same team and find financial freedom!
As we prepare for the workout, it’s important to establish boundaries and do a little bit of preparation work as well. Here are some things to keep in mind as you set up boundaries and prepare:

  • table all financial talks until your couples money workout time
  • no condescension or negativity
  • no interrupting your partner when they are talking
  • no name calling
  • no throwing food
  • start by saying one positive thing to each other
  • end by saying one positive thing to each other
  • create an environment that encourages comfort and success
  • have a timer on hand – for each segment in the workout

Bob and I developed a one hour money workout because we thought that if our “money talks” had a start and a finish they would be a lot less painful. We knew we wouldn’t get all our problems solved in just one hour, but we also knew that if we kept at it, we’d make progress. Email me and ask for the “Couples Money Workout” and you’ll find a miracle happen in your marriage, too!

Ellie Kay

America’s Family Financial Expert (R)

Is the New Frugality Here to Stay? — Ellie on FOX NEWS – Neil Cavuto

A new study by research firm AlixPartners indicates that when a new normal sets in after this recession is over, Americans will spend at about 86 percent of their pre-downturn level. Today, I was on Neil Cavuto to discuss with guest host, Stuart Varney, whether this new frugality is lasting or just a passing fancy.

I believe it’s here to stay for several reasons. I think that the hard-earned, hard-learned lessons of the recession are not likely to fade as soon as our economy shows its first two quarters of growth. Some of those lessons came through job loss, foreclosures and underemployment and if you weren’t directly impacted–you know someone who was.

Secondly, I think that we’re not going back to those pre-recession spending levels because there will be what I call a forced frugality. While there will always be spenders out there, it’s going to be harder to spend because:

· NO MORE EASY CREDIT the days of easy credit won’t be so easy as lenders continue to scale back on available lines of credit. One of the reasons Americans could spend beyond their means was because of the ready availability of easy credit.
· NO EQUITY – there’s not going to be the equity in your home to leverage in order to pay for consumables. The people who used home equity to pay for vacations, get out of consumer debt or add a new kitchen are now wishing they had the equity instead. Some of these people are even upsidedown in their homes because of leveraged equity.
· EMPLOYMENT ISSUES – Because spending is down, more job sectors are going to continue to be impacted. As people spend less, more folks lose jobs and unemployment may continue to rise even after the recession if officially over. It’s going to take a while for the job market to bounce back—unemployment and underemployment are going to be continued problems.

Thus, the need to adopt the new frugality as a classic style rather than a passing fad. People like me, who have been preaching the gospel of living within your means, paying cash, paying down consumer debt and letting your kids go to a college you can afford—are now in high fashion.

I hope this kind of fiscal sensibility never goes out of style!

Ellie Kay
America’s Family Financial Expert (R)
http://www.elliekay.com/

Is the Recovery for Real?


One of my favorite musicals is The Phantom of the Opera. I’ve seen it on Broadway, in Spokane and in Los Angeles and it’s always a powerful reminder of the phantoms we struggle with in life. This recession has been a formidable foe for many Americans as they wonder when (and how) it will end.
Recently, Federal Reserve Chairman, Ben Bernake, announced that he believes the recession is over. How do we know if this is the real deal or just a phantom? Here are some signs that the recession is really over:

  • Retail Sales – With the holidays right around the corner, retailers are forever watching to overall gains and losses. Any signs that retail sales are on a sustainable upward trend (3 or more quarters of growth) are good signs for a recovery.
  • Corporate Profits — We will need to see genuine revenue growth from US Companies in order for us to say this area is picking up. We can’t just look at profits that result from cost and job cuts or stimulus incentives. Real growth means real revenue.
  • The Market – When investors move away from safe havens such as low yielding CDs and money market funds and they instead go back to investing in stocks–then we can be sure that confidence in the stock market has been restored.
  • Jobs — Just try to tell the guy who is unemployed, “hey good news! The recession is over!” He’s still without a job–it doesn’t feel like it’s over for him. We’ve lost almost 7 million jobs since the beginning of 2008. Signs that companies are creating jobs, done firing and even looking to hire mean that their cash flow is improving and so is our economy. When there’s a drop in the number of jobless claims (getting below 500,000), then we can believe we’re in recovery.

Whether the recovery is real or we’re still in a recession, it’s important to practice the basics of good financial management: get on a budget, live a more frugal lifestyle, pay down debt, and follow the seven steps to thrive and survive during a recession. If you allow this recession to be a wake up call as to how you manage your money, then your personal recovery will last a lifetime!

Ellie Kay

America’s Family Financial Expert (R)

http://www.elliekay.com/

When Two Incomes Become One – WIN A BOOK!

Here is another chance for you to win a copy of Ellie’s newest book, The Little Book of Big Savings (Waterbrook, 2009) by having Ellie answer your question on ABC News Now.

Do You Fear Unemployment?
Are you a two income family, that is suddenly down to one income?
Are you afraid your company’s cutbacks might include your job as well?

If so, then we want to hear from you! What question(s) would you like to ask Ellie about your situation?

The producer(s) of ABC News Now will select the questions for Ellie to answer on the “Good Money” show to air on October 27, 2009.

Please email your questions to: assistant@elliekay.com or posted it on today’s blog (below).

The deadline for your questions is: Monday, noon PST, October 26, 2009

Remember the ABCs of past prize winning questions:

  • Accuracy– Questions that accurately fit the show’s theme for the day are most relevant. This week’s theme is “When Two Incomes Become One.”
  • Brevity – If it takes two minutes to ask the question, then it won’t be selected. A question that can fit into a 10 to 15 second soundbite is ideal.
  • Clarity – The world of TV news revolves around questions asked in a way that is easily understood by viewers.

We look forward to hearing from YOU as you join Ellie on ABC News!

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