Archive | September, 2013

The Red Handbag’s 5 stepping stones to ‘there’

24 Sep

I was introduced to the fabulous term ‘financial meddler’ on    Mostly because that’s ME.  Though I prefer to be called a  financial Yenta:  I meddle in your finances (I also take friends bra shopping), telling you what you should or shouldn’t spend.   Or more like, why and how you should save.

Last month, I had great fun ‘Yenta-ing’ into your closet, urging you to search for your own ‘red handbag’ (…-to-retirement).   Uncovering those somewhat pricey, forgotten, items huddling in your closet and are horrified to find.

Did you look?  Think of it as your own early Halloween scary house exploration.

What extra money is lurking in your closet?  Like this Pottery Barn jan-o-lantern?

What extra money is lurking in your closet? Like this Pottery Barn jan-o-lantern?

Are you working toward saving your $1000 to open (or contribute to) your Roth IRA?   My friend J. was ‘Yenta-ed’ into saving $80 last month for her existing fund.  How are you doing?

Not convinced?  

Look at all those 60+ folks who don’t have the funds to retire – even if they want to.   Sadly, they had no financial Yenta.   And btw, while I’ve suffered through embarrassing explanations of  why a red handbag is my iPhone screen saver, my credit card is now gathering dust and I’ve saved $50.

Fall is the perfect time to begin saving.  Nature is spewing seeds for spring blooms.  We can invest money for retirement blooms.

So read and take action as I walk you through  (last month’s) 5 steps to get from ‘here’ to retirement ‘there’:

1.  Create a long-term dream:  Let’s face it, the only reason to save for an unknown future is because your dream is more enticing than that ‘red handbag’.   Hopefully you love what you do now (if not, you are due for a change).   The next phase of your life should be equally thrilling.  Let  your imagination go wild as you play over fantasies about ‘what you would do if…’.     I plan on running a middle-aged hostel in Eastern Europe;  my friend M. wants to retire to Central America to use the Spanish she’s been learning for the last ten years;  G. and A. have moved to be close to their grandkids.   Create that vision, then tell people about it.  Talking makes it real.  When they ask how you will fund your dream, proudly tell them about your Roth.
2.  Identify your values fulfilled by your long-term dream:  As a Yenta, I can tell you your values direct every aspect your life from finances to love.  If you haven’t identified them, do it NOW!   Here’s why your values must match your dream: without interest in saving –  no interest will accrue to make that dream come true.  And accrued interest, aka compounded interest is how saving helps your money grow.
3.  How much will it cost?  Let’s assume a lot.  Keep in mind:  Starting when you’re 25 and saving $5500/year at 6% interest you could save approximately $902,000.    (Check out to learn more about compounded interest – which grows beanstalks like magic beans)   If you don’t have that much, if you’re older, that’s no excuse to not save.  Do what you can.   But do it NOW to get you on your way.   For my dream, even if I can’t own my hostel, I confidently have the financial freedom to manage one.
4.  Get to ‘there’ starting with YOUR red handbag:  No excuses.  There’s money in your budget somewhere.  Take an afternoon and go through your closet, your bank and credit card statements.  Stay focused on that long-term dream and what you want.  Get rid of ‘crap’ literally and figuratively.  And find yourself a financial Yenta to put her hands on her hips and ruthlessly support your saving.

5.  Open (or contribute) an account:  Remember you have till April 15th.  $1000 will open an account with Vanguard, Fidelity, and T.Rowe Price, or a local bank.  I admit to liking a brick and mortar place.  Remember you can always change where you keep your money so don’t get hung up on finding the perfect place now.  Some banks or brokerage houses will offer money to open an IRA as tax day approaches.  (Take it – why not!)   After you’ve saved it gets easier:  Write your check for the $1000;  Walk into the bank or brokerage house (i.e. Fidelity);   Fill out a form and hand over the check;  If you don’t know which fund to invest your money, ask to speak with someone and in ten minutes they will advise you.

It’s that easy to get to ‘there’ from here.  If it still feels overwhelming, start saving anyway.  And I’m always available to be your financial Yenta!

Dream big!  Many say life gets even better in your 60’s.  I’m looking forward to the experience and want you to join me!

What’s your dream?