Category Archives: Expert interviews

Steps to Financial Planning for the Holiday Season

Financial planning is not necessarily a topic we think about during the holiday season. We are all so busy going to Christmas parties and planning who to buy for and what to get. For this reason, I thought it would be a good idea to share with you the steps to take in order to plan our finances during the holiday season. After all, we all spend more during the holidays than any other time of year. So I asked Elaine King CFP®, CDFA™, President of Family and Money Matters Institute™ , author of Family and Money Matters & La Familia y el Dinero Hecho Facil, CFP Ambassador and Chairman of the Financial Planning Association of Miami Dade if she could write a piece about the key steps to take in order to plan our finances during the holidays. She kindly obliged.

Here is her contribution.

Did you know that you can save 30% on average if you plan ahead for this holiday season?  Now is the time to get started and dust off the plan you set up in January and make sure you are on target with your spending plan.

Financial planning is more than just keeping track of your money. Other areas of financial planning include education, retirement, taxes, investments, and estate planning among others.  But it all starts with a spending plan.  To get started on this first step, follow these 3 tips to stay on track for the holidays as well as for the rest of the year.

1. Create a realistic spending plan.  Before going out shopping, it is essential to have a fund designated for each activity in your spending plan.  A spending plan is a list of all of your expected outflows for the month, designated as either a variable or fixed expense. Fixed expenses are those that must be paid, holiday or no holiday,  and are the same amount each month, such as your rent or mortgage payment. A variable expense, on the other hand, is one that is not necessarily incurred each month and/or varies in amount.  Some of these variable expenses are necessary – such as utilities or transportation, while others are entirely subject to your discretion.  This last category includes your holiday spending.

The key to keeping holiday spending under control is to build these year-end expenses into your budget at the very beginning of the year, and actually fund them monthly.  The money can be moved from your checking account to a savings account or a money market, so you are not tempted to use it for other expenses during the year. A good practice to keep you motivated and on track to having the holiday money when you need it is to use online tools such as Mint, Doughhound or Yodlee.

2. Share your spending plan with the family. Most of the commercials, ads and marketing campaigns developed for the holiday season are targeted to children and families.  They are attractively designed, promoting “must have” products and experiences for the holidays.  It is imperative that you take the time to share with your children the value of money and giving, but also discuss what is appropriate and affordable for your family. Consider empowering your children by designating an amount in your spending plan that is for them to use (and keep within this plan!) as they do their own shopping.  Have them participate in financial decisions about entertaining.  For example, you could set aside $50 for a small gathering at your house, and have the children share in the task of buying food and supplies at the supermarket.  You might reward them if they find ways to spend less than the budgeted amount, such as putting the savings in their own accounts.  It’s so important to get children involved in financial management, and empowered to take control of finances.

3. Stay away from credit card debt.  Equally important is to avoid using your credit card to buy more than you can currently afford.  You should also limit the number of credit cards that you hold. Consider that a debt of $1,000 at a 19% APR where you only pay the monthly minimum will take 20 years to pay off the balance.   Debt is not always bad, however.  Debt that is used to finance items that appreciate over time such as a college education, or a business start-up, are effective uses of leverage.  On the other hand, using debt to purchase something that depreciates in value or has only short-term benefits, such as clothing or entertainment, is bad debt.   During the holiday season, our generosity and holiday spirit can sometimes lead us into bad debt that lingers long after the festivities have ended.

In the past few years, the year-end has brought feelings of anxiety and loss due to economic, political, and social turmoil.  However, we all want to close the year on a positive note, creating a culture of responsible finance despite the affairs of the nation.  Consider giving donations in the name of a family member or friend rather than buying the person a store gift. Consider hosting events and asking your guests to bring a toy for a shelter, or contributing to someone’s education fund.  A Certified Financial Planner professional can help you with your seasonal planning and budgeting and give you more control of your finances which will allow you to enjoy the season and relax.

How can businesses better prepare for a disaster?

Holmes E. Miller, Ph.D, Professor of Business at Muhlenberg College in Allentown, PA gave me a several good tips for business owners.

–        Mitigate immediate damage.

When the disaster first occurs if no actions are taken the resulting damage might be worse than if one acts to lesson the impact.  For a family, if a basement is flooding, taking valuable possessions off the floor and moving as much as they can to higher ground mitigates the water damage.  For a business mitigating immediate damage might be mitigating physical damage such as closing natural gas lines that might explode, shutting down computer systems, or even contacting customers and telling them to hold off submitting transactions that might be unable to be processed.

–        Assess damage to and availability of personnel, facilities, infrastructure and systems

After the event has occurred assess the status of various “systems” needed to operate. A recent Wall Journal Article said a firm had backed up its computer systems offsite, but then realized they had not backed up phone lines from customers until they assessed the situation.  Customers thus could not call in because the one line to the main facility was inoperable.  Also, are key people available? The disaster recovery plan might specify that certain individuals be around to operate a computer system but are they available? Assessing facility damage involves assessing how badly damaged buildings and machinery are.

Infrastructure assessment involves things external to the company that the company uses — for example, right now, gasoline is hard to find in NJ and NYC. Even if a firm has a fleet of trucks, is the external fuel available?  Or if the trucks use a bridge, is the bridge open? And, as many firms are experiencing, is electrical power available?

–        Prioritize critical operations to be resumed

Prioritizing critical operations means that not all things can be backed up and start running immediately.  Some are more important (according to predetermined criteria) than others. Hopefully, this has been done before the disaster and is spelled out in the firm’s disaster recovery plan, but even this needs to be revisited.  For example, a hospital might ensure an ICU is running and postpone administering optional MRIs.  If resources are limited, which of the services can be offered immediately?  Or, which customers can be served and which will have to wait?

–        Marshal internal resources

This involves forming the disaster response team for the short term and for the long term, this is the recovery team.  It involves personnel, necessary equipment and supplies, information, and if people are working offsite — transportation, food, etc.


How to Cope Psychologically with Hurricane Sandy

The stress, sadness and sense of loss of control hits hard when someone becomes a victim of a natural disaster and these feelings can be overwhelming. Donald K Freedheim, PhD, Professor Emeritus of Psychology at Case Western Reserve University in Cleveland, Ohio and clinical psychologist on the Red Cross Trauma Team shed some light on the subject.

What are some ways the people affected by Hurricane Sandy can cope psychologically to what has happened to them?

Some general remarks on coping:

–  Reach out to family and friends for communication and support.  It is important to speak out about the losses, feelings, anger, frustration, etc.  Keeping these inside may increase the pain and helplessness. Some are better at talking than others, but it is important to try to express feelings in words rather than action.

– Explore all options for help.  Do not be shy about seeking government aid, Red Cross assistance, or support from any source.

– Treat yourself to your favorite indulgences [food, entertainment, etc.] to relieve some of the pain.

–  Use the resources of churches, counseling centers and other places where you can “unload” about the losses and pain.

Getting Help after Hurricane Sandy (con’t)

Many of the victims of Hurricane Sandy are seeking help from FEMA. Greg Raab provides some useful advice. He is the Manager of Integrated Services at Adjusters International is a licensed Public Adjuster, a Board Member for the National Association of Public Insurance Adjusters (NAPIA), and currently works as a Disaster Recovery Consultant representing NY, and many other FEMA-eligible applicants.

He says that he has been responding to more and more people in need of every day help after Sandy’s aftermath.  “Many have flood insurance, some have just a homeowners policy, and some, including renters, have no insurance coverage at all.” According to Raab, there are different homeowner responsibilities associated with each situation.  However, regardless of the situation, common things everyone should keep in mind is to focus on their safety and the safety of their family first, as everything else can be replaced.  Also, keep detailed documentation of everything that is happening, including who you talk to, correspondence from insurance companies, FEMA, and local authorities to name a few.

When you are seeking help, Raab states that the best thing for individuals to do is contact their local county emergency management office first, as usually the most updated information and resources begin at the local level.

“They may have immediate remedies for issues you may have including access to Red Cross, local food banks for food and water, etc.  They may be able to best direct you to specific FEMA hotlines and websites for the fastest response,” he adds.

It’s important to also note that FEMA assistance will ultimately be available for losses or assistance above and beyond what your insurance policy or policies can provide, so it is very important to know your policies and the responsibilities of the homeowner contained therein, such as timely reporting, properly mitigating your damages, and filing timely proofs of loss says Raab.


Getting Help after Hurricane Sandy (con’t)



John D. Weaver, LCSW, BCD, ACSW, a founding partner of EYE OF THE STORM, Inc. (Nazareth, PA), and social worker provided some tips to help the victims of Sandy. EYE OF THE STORM, Inc is a company that provides private mental health consultation and training services. The firm specializes in disaster mental health, crisis intervention, and risk management related training and support.

He says that it’s normal to be scared; it helps fight the fear if you are prepared and adds that it’s helpful to get APPs that help us be prepared. Be sure to get the @RedCross APPs

One great tip he provides is to diminish the stress and fear of disaster by limiting exposure to the sights/sounds of TV news/weather reports. #selfcare #RedCross and to use social media and a smartphone to stay connected with friends/family. This is a great way to fight the stress of #Sandy #selfcare.

Also, you can contact the Disaster Distress Helpline, a program of @samhsagov, @distressline. It offers 24/7 crisis counseling; call 1-800-985-5990 or text TalkWithUs to 66746.