![Jill on Money [ Archive]](http://images.squarespace-cdn.com/content/v1/59efbd48d7bdce7ee2a7d0c4/1510342916024-TI455WZNZ88VUH2XYCA6/JOM+Blue+and+White.png?format=1500w)
Here we go again: Another massive data breach, reminding us how vulnerable we are to thieves seeking our personal information and identity. Last week, credit monitoring company Equifax announced that a “Cybersecurity Incident” had exposed names, Social Security numbers, birth dates, addresses and, in some cases, driver's license and credit card numbers, from a whopping 143 million Americans. “Incident” sounds a little tepid for the magnitude of this event, but more critically, consumers who were instructed to go to the Equifax emergency web site, equifaxsecurity2017.com to determine if their information had been compromised, ran into a brick wall: After entering the required information, people could not get confirmation about whether or not they were affected.
More Financial Vegetables: Life Insurance
I've been spooning out a healthy portion of financial planning vegetables in the aftermath of Hurricane Harvey. Now that we have covered the ins and outs of navigating the property insurance claims process, it's time for another helping of what’s good for you…because it’s Life Insurance Awareness Month! I know people really don’t like to think about this topic. But not addressing this cornerstone of planning can leave your heirs with big financial problems. According to the 2017 Insurance Barometer Study, conducted by Life Happens and LIMRA, while 84 percent of respondents agree most people require life insurance, only 70 percent said they themselves needed coverage.
Hurricane Harvey and Insurance Claims
The aftermath of Hurricane Harvey will unfold for months to come. Unfortunately, natural disasters have a way of pointing out some of the more unsexy aspects of our financial lives, like the details of property and casualty insurance coverage. Of course the time to review and become familiar with the terms of your policies is not in the aftermath of a severe event, but before it occurs. That said, many victims of a flood learn quickly that standard homeowners’ policies cover structural and water damage only in limited circumstances, like when a falling tree knocks a hole in a roof or breaks a window, allowing rain to fall inside.
Economic Impact of Harvey and Tax Reform
Hurricane Harvey had a devastating catastrophic and life threatening impact across the Gulf and as the region prepares to clean up, analysts are worried that the economic effect could be devastating. The Texas Gulf Coast oil and gas industries are likely to see the first wave of problems. It is estimated that the region accounts for nearly a third of the nation's refinery capability. Given that many refineries had to close ahead of the storm, Americans could see gas prices spike by between 5-15 cents a gallon, especially in the South, Southeast and mid-Atlantic. Prior to the storm, the region enjoyed some of the lowest prices at the pump, ranging from about $2.10 to $2.21 per gallon, versus the national average of $2.36, according to AAA. Although the increase could be dramatic, it is likely to be brief.
Should I Sell My Stocks?
If during a two week summer vacation, you heard that there was an escalation of tensions between the US and Korea; two international terrorist attacks; a US domestic terrorist attack; a looming debt ceiling crisis; and political upheaval in the White House, you might think that US stock markets would be in free-fall. You would be mistaken. Although markets were down over the most recent fortnight, the damage was fairly limited—about two percent overall. Even with the recent declines, the S&P 500 remains 8.3 percent higher on the year and just 2.2 percent below its record high, while the NASDAQ is up 15.5 percent in 2017. Given these numbers, its not surprising that the most frequently asked question that I have fielded over the past month has been, “I can’t believe that market is doping so well, considering (fill in the blank)…SHOULD I SELL MY STOCKS?”
Personal Finance 101 for College Kids
As millions of parents prepare to send their kids off to college, it is critical that they communicate about safety, hygiene and of course study habits. But it is also important that they discuss money and communicate to their kids that they are responsible for their finances and should act accordingly. Here are the introductory topics to cover: Money Management 101: Each family will create a different system for managing money, but in my experience, the most successful plans start with the creation of a realistic budget. You will then need to discuss what the parental contribution (if any) will be. From that point, parents may choose to provide the student with a lump sum for the semester, though I recommend a monthly allotment, which should help young adults get used to managing finances in the same that they will do so after college.
Electric Shock Spending Therapy
Regardless of how much money you earn, cash flow is the foundation upon which most of financial planning is built. Understanding what’s coming in and going out can help you determine what is available to fund various goals, including debt pay-down, college funding and retirement planning. That’s why nearly every CERTIFIED FINANCIAL PLANNER™ professional (CFP) will start a client relationship asking about how much money you spend today. If you don’t know, she may encourage you to create or adhere to some type of tracking system. Cash flow is probably the least sexy part of planning. In many ways, it’s like dieting and exercising because it relies on self-control and discipline. The best personal trainer can create an effective work out regime, customized to your body type, but she can’t force you to do the squats and dead lifts. Similarly, a nutritionist can design a diet plan that will help you manage your weight, but only if you stick to it.
Can Money Buy Happiness?
“Money can’t buy happiness, but it can make your misery a little more comfortable,” or so my father once said. I have also come to believe that while money can’t buy happiness, it can buy you options. For example, with enough in savings, you may be able to make a different career decision, or you may have peace of mind that allows you to feel free from an employer’s whim or an industry’s downsizing and of course, money may allow you to retire early. But what about that jolt of glee that you feel, when you sit in a brand new car or slip on that sparkling piece of jewelry? Psychologists and behavioral economists have conducted studies, which have shown that despite a shot in the arm that a purchase or even a gift can provide, the happiness boost does not last that long. There is actually a name for this: The Hedonic Treadmill.
4 Ways to Manage Investor Risk Amid Low Volatility
If you’ve been thinking that stock markets have been pretty quiet in 2017, you are right--it's been more like the merry-go-round and less like a rollercoaster. Through the first seven months of the year, none of three major stock market indexes has fallen by more than 5 percent. And one gauge of market movement, the CBOE Volatility Index (VIX), which measures investors’ expectation of the ups and downs of the S&P 500 Index over the next month, recently dropped to its lowest level in 24 years. Low VIX readings have tended to be equated with muted anxiety and high stock prices. Amid this environment, you might be wondering what could go wrong? There are always risks that persist and while their existence does not mean that long-term investors should change their game plans, they are a reminder to guard against complacency and to always approach investing with caution.
Reverse Mortgage Pros and Cons
As house prices have increased, many older Americans may be tempted to tap the equity in their homes with a reverse mortgage, which is a loan that allows homeowners 62 and older to convert a portion of the equity in their homes into cash, as long as the home remains their primary residence. Most reverse mortgages are offered through the Department of Housing and Urban Development and are guaranteed by the Federal Housing Administration (FHA) through a program called Home Equity Conversion Mortgages (HECM).