Holidays are times of gathering for families. As such it provides opportunities to help the extended family strengthen its economic foundation. These are the perfect times to discuss estate plans, elder care, custodial expectations and more. Now that sounds pretty heavy and it may be depending upon how your family views these subjects. But not talking about it isn’t wise.
Normally estate matters are resolved as part of a process that takes time to complete. But they must be started. Start with the easy stuff. Are wills in place for all adults 18 years and older? What happens to the kids? Are there durable power of attorneys and health care directives in place for all adults 18 years and older? It is better to have these discussions before a crisis requires them. Not having proper estate plans in place has put significant stress on family relationships regardless of assets forever. Yours will be no different.
Take the next steps depending on what is learned. Help those that have no plan get one written and recorded. Encourage those that have a partial plan to upgrade. Lead by example.
Family gatherings can also provide opportunities to save money through the elimination of redundant streaming services expenses. Most streaming services allow for multiple profiles or device logins. Maximizing profiles used for each service and spreading the cost of the subscriptions can expand extended family access while lowering individual unit costs. This is also a time to review subscription services already shared to see if they are still used and eliminate those that aren’t.
Some services can be eliminated seasonally depending upon demand. The family can adopt a “binge and go” strategy. This is where a service is subscribed to for a period of time to allow episodes to be binged. The effect is to make the service disposable, use it then lose it. This eliminates autopilot spending that subscriptions require.
Here is a list of some popular subscription streaming services and links to their multiple user policies:
Living paycheck to paycheck is hard because there never seems to be enough money, ever. Being “broke” all the time ain’t no fun, that’s for sure. Especially if you make a “decent” income and know you should be doing better. This also encourages the unsustainable use of debt for lifestyle support.
It's not just how much money comes in and how much money goes out. It's also when does money come in, and when does it have to go out? That's called cash flow. If you manage your cash flow properly, you can reduce your stress and survive short term minor financial shocks.
The steps to proper cash flow management:
A lot of times you'll have more dates with money going out than you do money coming in. It’s not just the date when money has to go out, also its relative size to the money coming in has an impact as well. For example when a rent payment requires most of a pay period check.
My first confrontation with cash flow was during my first job. Newly married at 22, totally inexperienced at handling money. While also suffering from early-onset testosterone poisoning better known as “stupid looking for somewhere to happen” that silently infects so many American males. My beautiful young 20-year-old bride did not have much experience with money either. We were properly raised in Black middle class families where money was a closely held secret revealed only on a need to know basis under the penalty of death if revealed to anyone.
I got a job working for 3M Co as a territory sales rep. In 1973, my starting salary out of graduate school was $800 per month, paid once a month at the end of the month. That was all the income we had. Besides the salary, the job came with a company car. And they also reimbursed expenses bi-weekly, such as gas for the company car and meals with clients.
Being paid once a month will force you to learn how to manage money. Unfortunately, we made a ton of errors on the way to that knowledge. There was always seemed to be “a lot of month left at the end of the money.” It was a stressful way to live and led to an unmanageable debt load that would accompany us for years. I remember one particularly painful month when my wife made a simple arithmetic mistake in the check register. (These were the days before digital calculators, nevertheless ATMs, computers, or apps.) The account was overdrawn and there was nothing that could be done about it until next payday. Of course, the bank had no problem racking up overdraft fees throughout the month and immediately subtracting them from the next deposit. This made a bad situation worse and prolonged the pain for additional months.
I left that job for another job that paid more money more often, from once per month to every two weeks. The biggest change besides the slightly larger income was going from 12 to 26 paydays per year. That change lowered our stress and increased our capacity to save aggressively and spend wisely.
You can also use your credit card to control due dates. This is a strategy that is especially effective with multiple cards and delivers rewards as well. Remember cash flow is impacted by how much goes out and also when it goes. Using a credit card to pay an obligation can effectively extend its due date and allow you to retain your funds longer. Using a series of credit cards with rotating closing dates to pay routine obligations such as utilities, insurance premiums, etc can improve your cash flow and buffer unexpected increases. To use this strategy you must pay your credit card statement balance in full each month by the due date.
The 3 fundamentals of good cash flow management are simple and evergreen:
Power outages and interruptions happen. If they happen often enough or for long enough you could be eligible for compensation from DTE and Consumers Energy. The Michigan Public Service Commission (MPSC) Service Quality and Reliability Standards requires utility companies to compensate customers for losses associated with power outages. Rules regarding outage service credits and eligibility requirements can be found in the MPSC’s Service Quality and Reliability Standards. These standards provide customers a $25 credit upon request if the utility’s investigation of your request determines you have experienced a qualifying outage.
There are 3 types of available credits:
An investigation will be conducted and a decision will be rendered within 30 days. Your claim will be summarily denied if:
Where does the money go? Answer: holes in your spending plan or spending leaks.
A spending leak is an uncontrolled expenditure of resources. Spending leaks are caused by a variety of reasons, both personal and economic. Common examples of spending leaks are susceptibility to impulse purchases, routinely paying credit card interest, or using energy inefficiently. Whether small or large, leaks add up and reduce the chances of achieving your goals. Sometimes spending leaks are hidden or camouflaged. So they have to be discovered. Others are more apparent. Once discovered spending leaks must be fixed.
Fixing a spending leak may be quick or require a long term behavior change. All are repairable with varying degrees of difficulty. Here is one spending leak repair that is sustainable. It is a behavior change that eliminates a leak for a lifetime. Make a quality decision to Stop Paying Fees. A quality decision is one from which there is no retreat. Most people don’t make a lot of those in their lives. Nor should they. But you can on this one. Just set your jaw, head down, and just do it.
Fees are not interest. They are other charges for privileges or penalties you have accessed through your actions. If you don’t access them, you don’t pay. It may take a strategy and some time to sustainably eliminate all fees but it can be done.I have for decades.
Here are 5 fees to never pay again. When it comes to my money I see paying these fees as a self-inflicted wound. Those are the worse kind. I decided to stop hurting myself on purpose.