Meet Our Newest Planner: James Jacobucci

April 10, 2017

The newest member of our CERTIFIED FINANCIAL PLANNER™ team, Jim Jacobucci, CFP®, MBA, has always liked to save money. It’s one of the reasons he switched careers to financial planning from manufacturing. I asked Jim some questions about his money story, money and family life, and what it means to come to Financial Finesse:

What’s your personal mission? Who do you most want to help?  I most want to help people who generally do not have access to sound financial guidance. Those who have problems making ends meet each month or who have taken on high levels of credit card debt need help just as much, if not more, than anyone else. My mission is to provide sound guidance on how to navigate through everyday financial issues that are important to everyday people.

What’s your money story – what your parents taught you about money, etc.? Did you hold any negative beliefs about money that you had to overcome? For as far back as I can remember, I liked to save money. I’m not really sure why. When I was, say, 8 years old, I did not have a goal in mind to buy something specific, but I just liked to save what little money came my way.

I do not recall my parents teaching me specifically about money, but we were a middle class, single income family. When my dad was working, things were fine, but if he was laid off, things got pretty tight, pretty quickly. Maybe just experiencing this influenced me to save when I could.

What is the biggest mistake you ever made with your money, and what did you learn from it? The biggest financial mistake I ever made was not having an adequate emergency savings fund while I was going through a career change. I knew that my income would drop during this transition, but I did not properly plan for all scenarios. For a while, money was pretty tight until I gained some more traction in my new profession. What I learned from this is to always hope for the best but plan for the worst when it comes to making decisions that will have a long term financial impact.

What have you learned about money and marriage that you can teach the rest of us? I am very fortunate in that my wife and I are pretty much on the same page regarding our finances and how to prioritize. And therein lies a lesson learned. This may sound a bit too clinical, but I believe when you commit to spending the rest of your life with someone it just makes sense to be sure you have the same general philosophies when it comes to money.

My wife and I never really had in-depth money conversations before getting married, but you get a pretty good grasp on someone’s financial tendencies when you are spending time together. While dating someone, if I saw she was spending frivolously on luxury items at the expense of more practical things, that would have been a red flag for me. Not that she would be “wrong” in her spending choices, but having such a different outlook on spending compared to mine would present some challenges if we did get married.

How do you teach your kids about money? I try to explain to my kids why I am making the everyday choices that I am with regards to money. It started out at the grocery store when they were young.

If we were going to buy a gallon of ice cream, I would explain why I was buying the brand that I was. Was it on sale? If one brand is more expensive, is it worth spending that extra dollar on that brand or would it be wiser to spend that dollar somewhere else?

Now that they are a bit older, when it is time to make a purchase for my kids for say, new summer clothes, it is left up to them what to buy (as long as it is tasteful). They are given a budget of how much to spend, but it is up to them on how they spend it. My wife and I certainly provide some coaching along the way and help weigh the pros and cons of buying a designer item vs. a more run-of-the-mill item.

What do you think your generation does differently with money/attitudes about money? Being a Gen Xer, I think my generation sees money that is something that you need to work hard for, to earn. Put in an honest day’s work and get an honest day’s pay.

If you could wave a magic wand and reform financial services, what would you do? I am frustrated that those who need the most help, those who are really struggling to make ends meet, get the least help. One of the great things about delivering workplace financial wellness benefits is that we’re compensated and incentivized equally for offering financial guidance to an employee with a net worth of $10 or one with $10 million. This is the approach of Financial Finesse and why I love working here.

Tell me about your financial coaching philosophy? First and foremost, I respect every employee that I am coaching. They may be in a bad financial spot, but there are always reasons for getting to where they are.

Understanding those reasons, how they affected their finances, and what can be done to improve their financial wellness is what I strive to do. I never pass judgment on a person, regardless of their situation or how they got there. It’s my job to listen and understand and give employees the tools to make improvements.

Why did you want to earn your CFP® designation? What does it mean to you? There were three main reasons that I decided to pursue my CFP®: to broaden my knowledge base in tax and estate planning, to provide myself with a certain level of intellectual stimulation that was lacking in my job at the time and to give me the ability to help a wider range of people. To me, the CFP® designation represents an ongoing commitment to keep current on financial planning topics, which enables me to be in a position to help people make the right financial decisions.

Is there anything that really surprised you about coming to work at Financial Finesse? Why? The thing that surprised me the most about coming to work at Financial Finesse was all of the planners are deeply involved in the company in areas which impact how workplace financial wellness programs are designed and delivered. They are involved in many parts of the business – research, consulting, communications, recruiting and fact-checking. This is a great because the planners all have unique skill sets and experiences that are useful in multiple areas of the company.

 

Do you have a question you’d like answered on the blog? Please email me at [email protected]. You can follow me on the blog by signing up here and on Twitter @cynthiameyer_FF.

 

Financial Lessons From a Chess Board

March 31, 2017

I don’t always watch 60 Minutes anymore, but when I do, I am reminded that I have liked it since I was a kid. That brings up a few points. First, the show has been on a very long time! Second, I was a weird kid – watching 60 Minutes while my neighborhood friends rode their bikes. I’d join them before and after so it’s not like I wasn’t social too…just nerdy.

In a recent episode, there was a story about a man teaching chess to kids in Mississippi. Google “60 Minutes chess” and watch the quick story. Here’s a quick synopsis of the segment. What I found fascinating is that while he’s teaching the kids to play chess, he is actually teaching them about far more than that. He’s teaching incredibly valuable life lessons.

I have some odd thoughts on parenting, but I’ve summed it up this way: If I teach my kids how to win with class, lose with grace and think through a decision making process, I’ll feel like I’ve prepared them for the real world. That’s a part of what he is teaching these kids.

Chess, like life, requires patience and constant learning in order to succeed. They kids, like all of us, learn more from their losses than their wins. For them, this is because they review the losses for what they could have done better. The sting of a loss is a great teaching tool.

In a way, conversations about money can have that flavor too. I’ve talked with a lot of people who start their conversations with me by saying “I’m lousy with money” or “I’ve made a lot of mistakes in my financial life.”   The good news is that they recognize that they could have done things differently. The downside is that they haven’t worked with anyone, like a coach, who has been able to help them review their mistakes and provide suggestions for ways to improve based on those losses.

When I hear conversations start that way, I immediately stop the conversation and tell people that they are no longer allowed to speak negatively about their financial skills. I ask if they were handed a violin and put on stage with the New York Symphony, if they’d do well or if they’d fare well in a chess match against Bobby Fisher (for those with great memories) or Magnus Carlsen (for a more current reference) if they have never played before. The answer is a universal “NO.” Those are skills that are honed over a lifetime of practicing and learning.

Managing your personal finances is way easier than mastering chess or the violin so it won’t require nearly as much effort or skill. In fact, it’s relatively simple to become a financial success. There have been years worth of blog posts in this space giving little tips about how to become financially well/secure. I’ll close by summing up several years of posts in a few bullet points:

  • Spend less than you take home.
  • Save 15-20% of your income for retirement.
  • Have a healthy emergency fund. (Start with $1,000, get to $2,500, and then get to 6-9 months of expenses over the course of time.)
  • Pay attention to where you spend money. No one will care about your money as much as you, so guard every dollar that you work hard to earn.
  • When you mess up, which we all do, figure out why. Learn from it and don’t repeat it.

 

 

 

What To Teach Your Kids Before College

July 26, 2016

This time of the year is brimming with the excitement of future college freshmen over their new adventure. Talking to them is fun – hearing about their hopes, dreams and expectations of their freshman year. The more I started listening, the more my excitement wore off and disbelief settled in. I started to realize that some parents have this expectation that they can teach their kids zero about finances, give them an account with a few thousand in it and expect their kids to become financially responsible and budget properly. Here are some tips to follow instead:

1. Summer jobs are great economic teachers. If your student has a summer job, use it to teach your child invaluable lessons such as what their future careers may be for life if they drop out of college with no plans, that the gross vs. net difference in a paycheck is big and guidance on how to budget their money. Use websites like Mint, YNAB, or even the budgeting tools where you and your family banks to help your child create a budget.

2. Show your child the economic realities of college. Most people think about tuition, books and room and board. To some degree, that is only the beginning.

Every organization, fraternity or sorority your child is thinking about joining may have a fee, some to the tune of over $600 a semester. There are also those pesky fees like student health center fees, student activity fees, orientation fees, new student fees, technology fees and whatever other fees the college thinks up to charge. Use checklists like this one as a guide to possible costs.

3. Come up with an “oops I screwed up plan.” Okay, let’s be honest. None of us were financial wizards when we went to college. A lot of us overspent in our attempt to fit in and alleviate home sickness. Talk to your child before they mess up about how you will handle it the first time and come up with what you will do if they make the same mistake twice.

One of my friend’s parents told her daughter that she would consider the first time she makes a financial mistake a lesson learned. The second financial mistake will result in the “Bank of Mom” shutting down. My friend figured that at worst, her daughter would still have food from the cafeteria to eat, a dorm room bed to sleep in and feet to walk to class.

Don’t wait.Working on a contingency plan now will save you from unnecessary and probably emotionally charged conversations in the future. Take the time to work with your kids on a financial plan for college to not only save your wallet but to save your sanity.

Have You Made a Big Financial Mistake?

June 24, 2016

Lately, I have been spending more time in the kitchen. One of my sons has become addicted to the Food Network and we have been watching a lot of Chopped lately. We will watch a few episodes and come up with a few dishes that we want to cook, head to the grocery store and then come back and experiment.

Surprisingly, it has produced some very nice results. We’ve eaten some very tasty meals and laughed a lot at our mistakes. It has been a great learning experience for us.

Laughing at mistakes is easy when it’s in the kitchen. When it’s in our financial lives, it’s not as easy. I can scrape some overcooked or horrible tasting food into the trash can and order a pizza. We can’t make such a quick correction if we really botch something up in our financial life.

For instance, I met someone recently who made the mistake of putting her name and her name alone on a lease for a rental house. She and her new boyfriend went from first date to wanting to live together within about 6 weeks. They found a place that fit both their lifestyles and when they went to sign the lease, she discovered that his credit score was very low and that he had a checkered financial past. She was in love so she overlooked those data points and merrily signed the lease for a place that required each of them to pay a bit more than they had been paying on their own.

It was a very beautiful place…or it was until 3 months into the lease, when he decided that he’d opt out of the relationship and into one with someone else. She was left with her name alone on a lease that she couldn’t afford. It was tough just to cover her half of the rent.

Paying the whole amount…impossible. She still had 9 months to go, and the landlord had very inflexible terms. She would be responsible for the rent, even if she moved out, until it was rented to someone else.

It was a terrible lease, but she signed it willingly. She put two months’ rent on a credit card while sorting out the details of her life and her short-lived relationship. Eventually, one of her friends moved in and was able to share the rent, but the credit card bills still lingered.

The rent was a challenge to pay, especially after a few car repairs – which also went on the credit card. When I met her, she had $10,000 on the credit card and was only able to pay the minimum payment. The balance was going nowhere, and she was not patient. She wanted it gone and gone fast.

We put together a plan for her to increase her income since she couldn’t reduce her expenses in any significant way. She was very knowledgeable about wines so she took on a part-time job as a server at a very high end restaurant with an extensive wine list. The upside…she had very few tables on any given night and was able to talk about spectacular wines. She decided that every dime she made from that job was going to be used to pay off the credit cards and when they were paid off, she’d use the money to save for the down payment on a house.

When she checked in with me last, she was halfway through the debt and loving the job at the restaurant. Not only can she talk about great wines, she gets to sample some ridiculously good food and pair it with spectacular wine at the end of her shift.  She figures that by the end of the year, the debt will be paid, and she’ll have enough to put 3 ½% down on a house. If she goes another year beyond that, she might get 10% down.

If you find yourself in a position where you’ve made a critical mistake in your financial life, don’t panic. One of my friends is fond of saying that once you dig a hole for yourself and you’re ready to get out, the first step is to simply put down the shovel.  A great way to do that is to ask for help! And be patient. While it’s not as easy as dumping a plate of food and ordering a pizza, with the right strategy and some effort, you’ll be able to dig yourself out of any jam.

 

Follow These Steps To Stop Making Bad Decisions

March 25, 2016

In a world where things can “live forever” on the Internet, we all need to be careful when posting things to Facebook, Instagram, Snapchat or any other social media platform. A funny, in a not very funny way, example of that happened with the rapper 50 Cent before he appeared in bankruptcy court recently. He posted a photo of himself sitting on the floor with stacks of money spelling out “B-R-O-K-E.” His creditors were NOT amused. (Note to self – when trying to show impoverishment, it’s best to not have a flamboyant display of wealth posted to social media.)

We’ve all made mistakes or put our foot in our mouth or done something to help someone else point out the error of our ways, but this is one of my all time favorites. It’s not quite as colorful as a story in my local paper when I was a kid about a guy who tried to rob a gun store at knifepoint (I’ll let you do the math and figure out how that ended) but the concept is the same. I wonder if at any point before having that photo snapped, 50 thought “this just might be the worst idea I’ve had in a long time?”

Again, we all do silly and not brilliant things from time to time, and I’m no exception. I’ve pushed myself too far too fast when recovering from injuries and ended up needing surgery. The worst part is I knew that surgery could be a result if I didn’t dial back, but I didn’t listen to the little voice in my head that said “this is really stupid!”

This week, I spent the majority of my time talking with people in financial coaching sessions and I heard a lot of people acknowledge that they made very dumb (their word, not mine) financial decisions when they KNEW it was a mistake before doing it. It made me wonder how often that happens and why we do it. Why do we make bad decisions?

I’ll let you read that article and hit Google to do more research, but regardless of the “why,” it’s something we humans do. And I’m noticing it everywhere now. The more people I talk to, the more admit to knowing before they made a bad choice that it was a bad choice. We willingly disregard our instincts and move forward to make regrettable choices.  My challenge to myself and to you:  STOP IT!!!

When you are about to spend way too much money buying something that you don’t really need – don’t do it! When you are thinking about reducing your 401(k) contributions for a short term reason – walk away from your computer and don’t allow yourself to do it! When you are about to buy a car and the payment is almost as much as a mortgage on a small house – be like Nancy Reagan and “Just Say NO”

Prolific business authors Chip and Dan Heath have a book about decision making. Decisive: How to Make Better Decisions in Life and Work is a great read. It goes into the “4 villains” of bad decision making:  1 – Our focus it too narrow  2 – We have confirmation bias 3   – Short term emotions get in the way 4 – Overconfidence hurts us.  If you can understand why you are about to make a bad decision (I recommend reading the book so you get a full explanation of each of the 4 villains), you’ll be less likely to follow through with it.

Where the book gets even better is when it moves from diagnosing why we make bad choices to building a good decision making process.  There are a few simple steps there that we can all use to help us make better choices in life. They call it the WRAP method:

W – Widen your options. Move from “this or that” to “this AND that.” Don’t limit your view.

R – Reality test your assumptions. Try to see the decision from your point of view, the points of view of your friends and family, and people who would disagree with the decision. The more angles you see, the better your decision becomes.

A – Attain distance before deciding. I love the 10/10/10 rule. How will you feel in 10 minutes, 10 months, 10 years about this decision?

P – Prepare to be wrong. Build in time for the unexpected. Anticipate problems and don’t let a bad decision linger.

There is a lot of info packed into each part of the WRAP process. (Here is a great summary of it.) If you are looking for a way to improve your decision making process, whether it’s already good (like I claim mine is!) or if it needs some work, head to your local library (trying to be financially sound) or hit your local bookseller to look for this book. Maybe it can awaken your inner “is this a good idea?” voice. When managing your financial life, slow down, take a deep breath, and try to listen to that voice.

 

 

 

 

Finding Some Good In My Worst Financial Decisions: Part 3

November 09, 2015

During the last few weeks, I’ve pointed out some of my own financial failures. Well, these failures weren’t exactly complete financial fails because I learned something from them and moved forward with a greater sense of purpose for how to better use wealth to accomplish life goals. Perhaps it is the voyeuristic culture that we live in with constant social media updates and reality TV shows that condition some of us to enjoy seeing others make mistakes right in front our eyes. I don’t know what that really says about our society, but it may just make us feel better to see that others are a little more messed up in the head than we are. Continue reading “Finding Some Good In My Worst Financial Decisions: Part 3”

Finding Some Good In My Worst Financial Decisions: Part 2

November 02, 2015

Last week, I started a series of blog posts discussing some of my personal financial mistakes and the lessons that I’ve learned from them. I don’t know what has gotten into me lately but I am really starting to make a habit out of picking on my own money mistakes. Last month, I wrote in Forbes about some of the things that I have been spending money on in The Last 10 Things That I Bought and was able to identify just how easy it is to get off track with our spending plans. Continue reading “Finding Some Good In My Worst Financial Decisions: Part 2”

Finding Some Good In My Worst Financial Decisions

October 26, 2015

Have you ever made some really dumb mistakes with your money? Perhaps your rational brain was screaming “No!” at the time but your emotional brain won the battle.Well, even though I may be a professional financial planner tasked with leading others to smart financial decision-making, I’ve had some major money missteps along this journey called life too. This week is the first in a series of blog posts about a few of my biggest blunders and how I tried to turn those mistakes into some good old fashioned life lessons. (Unfortunately, some life lessons can be quite expensive.) Continue reading “Finding Some Good In My Worst Financial Decisions”

How to Roll with the Punches

December 15, 2014

Last week, my family was just beginning a six hour trip home from Orlando, Florida when a major brain cloud of forgetfulness appeared that cost us money. After getting the family wagon loaded with kids, wife, parents, and luggage at a record setting time for punctuality and efficiency, our crew was ready to go. (It is important to note the small victory this appeared to be at the time because I am known to operate on “island time” when in vacation mode.) Google Maps was even confirming an estimated arrival that would leave us plenty of time at home to finally put lights on our sad and extremely naked tree and to do some Christmas shopping​. Continue reading “How to Roll with the Punches”

Is There Hope or Doom on the Horizon?

July 19, 2013

For a long time now, I’ve talked to people who have found it relatively difficult to come up with a 20% down payment and banks have not been very flexible with the 20% down payment requirement. Things may be changing though.  This article talks about what may be an encouraging sign for borrowers. It looks like there is some relaxing of the 20% rule now, with the return of the mortgage with a 10% down payment being seen more widely.  Is this a sign of hope that banks are having money flow back into the economy?  Continue reading “Is There Hope or Doom on the Horizon?”

Beware of Reverse Mortgages

October 19, 2012

One of the hidden nightmares of the financial crisis over the last few years is coming back into the news again.  And, I’m hoping that it won’t stay hidden forever.  I’m talking about reverse mortgages.  Continue reading “Beware of Reverse Mortgages”