Signs You Need a Financial Planner

Financial planner Seattle

Financial Planners Help Build Better Experiences

Sometimes it’s hard to tell if you need professional help for a problem or if you can handle it yourself. Whether it’s taking care of a common cold, fixing the sink, changing the oil in your car or doing your own taxes. The same question often arises about finances.

It happens all the time – financial questions pop up that you consider silly or stupid so you feel like you must handle alone and you don’t seek help. This is not the best course. As happens often in life, not reaching out to a professional can delay you reaching your goals and cause you to incur more out-of-pocket expenses and lots of headaches.

Here is the thing: there are no stupid questions when it comes to your finances. Don’t ever sit on the sidelines and fear asking a question or think you’re unqualified to go to a planner. Solid and respectable planners let you know if they can’t help you and refer a professional who can. They also let you know if they think you can plan your finances yourself.

Here are signs you may need a financial planner:

You recently married

To merge or not to merge finances is a huge question: emotions to contend with, forms to update, cash flow to track, debts to pay down, goals to lay out and spending habits and needs to reorganize and prioritize.

Communication during this transition helps you navigate possible questions about taxes, investment allocation updates, selecting benefits, joint roles in management of the household, deciding whether to maintain separate bank accounts and more.

You make a career change

Job or career transitions also bring changes in income and benefits. As a tech employee, you have a little more complexity than the average bear.  Stock compensation can make a huge difference in your overall compensation.  Make sure you maximize your company benefits, leave no retirement accounts behind and ignored, plan appropriately for income fluctuations, take into account future job growth or career prospects and consider the transition’s overall influence on your lifestyle.

You own a business

Whether considering starting your own business or a long-term entrepreneur, you likely need to know how to prioritize goals, pay yourself while keeping the operation running and the best way to manage cash flow on an income that fluctuates monthly.

Not to mention saving for retirement, obtaining health insurance and protecting you and your family against a loss in income from death or disability.

Your family is growing

A baby comes with a slew of considerations: ensuring you have an emergency fund of three to six months’ expenses adjusting your spending for child care, groceries and medical costs and updating your estate plan and insurance coverage in case something happens to you, among many other needed updates.

At the End of the Day

The first step in asking for help always seems the hardest. The assistance and feedback may surprise you when you open up to the idea that you need not handle all financial questions solo.

And it makes the experience much more enjoyable.

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The above discussion is for informational purposes only. Recommendations are of a general nature, not based on knowledge of any individual’s specific needs or circumstances, and there is no intent to provide individual investment advisory, supervisory or management services.

Top 5 Ways to Prepare for Buying a Home

Amazon recently announced their search for a second headquarters and it got me thinking about buying a home.

The thought of 50,000 new employees in one campus location will definitely spur new home buyers.  Seattle has exploded from the number of mid-westerners and Californians moving to the state for work.  Prices are continuing to rise and for most of us, this may create a panic to buy (FOMO around prices) or anxiety around buying a home.

So how can you make this daunting task a little better? Prepare, prepare, prepare.  Don’t be forced into a rushed situation and know your needs ahead of time.  As they say..

Preparation + Opportunity = Luck

When to Buy

Why am I writing a post on buying a home after Labor Day?  Because buying a home when others are too busy is a great time!

You may not always have a choice on timing, but if you find yourself waiting for a good deal then November to January is a great time to make an offer.  With the holidays and school starting, many families may be busy and buyers can be a little scarce.

In a seller’s market, buying in the off-season may mean more bargaining power.

How to Prepare to Buy

1.  Identify a lender or two you are interested in working with.  These may be credit unions in the area, your current bank, or a referral.

2.  Decide if you need a pre-qualification letter or a pre-approval letter.  Nuanced differences – I know!

Pre-qualification is a step before pre-approval.  This is where you can give a lender an idea of your current status without verification with documents and a hard credit inquiry.  This will give you a general idea of what you can be approved for without dinging your credit

3.  Check out your credit score to make sure everything looks right and no errors exist.  A great site for checking this is Credit Karma.

If you are close to a credit score cut off point (i.e. excellent credit vs good credit) then the rates available to you may change.  Take a look at what is affecting your credit score.  Determine if it makes sense to pay down some of your debt or wait for one of the hard inquiries to fall off your credit report.

4.  Know some of your numbers:

  • If you are renting, what will it cost to end your lease early?
  • What size house are you looking for?

If the loan is considered a ‘jumbo loan‘ then lenders may require you to meet more hurdles.

  • Will you put down 20% of the purchase price?

This will mitigate paying primary mortgage insurance on top of your monthly payment for the loan.

  • What is your housing expense ratio?  Lenders generally look for your expenses to be below 30%.

Calculate an estimate:  Annual salary x 0.28 / 12

Will your mortgage payment, insurance, taxes, and HOA fees be below this amount?

  • What is your debt to income ratio?  Lenders generally look for your debt payments to be below 40%.

Calculate an estimate:  Annual salary x 0.36 / 12  Will your debt payments be below this amount?  This generally includes student loans, car loans, minimum credit card payments, child support/alimony, and other required monthly obligations.

5.  When you are ready to buy a home in the next 60 to 90 days, get your pre-approval letter.  Find out when the pre-approval letter will expire.  When the pre-approval letter expires, more documentations and another hard credit inquiry may be required.

So what do you think?  What other tips for buying a home do you have to share?  

When you are ready to chat with someone about how buying a home fits into your long term financial future, schedule a consultation with me!

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The above discussion is for informational purposes only. Recommendations are of a general nature, not based on knowledge of any individual’s specific needs or circumstances, and there is no intent to provide individual investment advisory, supervisory or management services.

Teaching Kids about Money: 2 Ways to Enhance Learning

kids and money

Originally posted on GeekWire.com

When kids enter the picture, it can be hard to decide when to start educating them about finances. Where do you begin? How do you help them develop an understanding? Do you feel you grasp finances well enough to adequately answer their questions? *Scary*

Recently I re-read Ron Lieber’s The Opposite of Spoiled: Raising Kids Who Are Grounded, Generous, and Smart About Money.  

This book had a few too many first world problems for my taste, but I did take away some nuggets of wisdom.

One of my favorite stories from the book is a scene right out of My Super Sweet 16 tv series. A community where the bar mitzvahs keep getting pricier and more glamorous with parents spending tens of thousands of dollars on presents for these kids. Years later, one of the parents asked their child what presents he remembered receiving at his party. He said he remembered only two presents out of the hundred received.

Were these forgotten presents worth the money? I can imagine this response may make some reconsider their gifts after hearing this.  Maybe a more meaningful and valued contribution with a smaller price tag. This question did help the child realize that for all the money spent, it didn’t provide any extra value in his life.

If we can take a pause and ask why we want something and what value it will bring to our life, it may help us discover what we really want with our money as a family.

So not only are your kids learning from you, but you are also learning from your kids. Having financial conversations with your kids is a cycle of knowledge and empowerment.  It can also feel overwhelming if parents are uncomfortable talking about finances with their family.

Without these conversations, kids rely on cues from peers on how to think about spending money, and what their financial goals should be.

One of my favorite quotes from the book is “any conversation about money also had to consider the emotional context – the wave of mixed feelings almost all of us experience about the money we have and what others around us spend.”

Ron’s book relays stories about creating an open dialogue with kids around finances in an emotionally charged world.  How can you add their voice to family discussions on what is valued, and why money is spent the way it is? Only through conversations can you increase awareness of the way social media and instant gratification changes our behaviors today.

This is about preparing kids to make good long-term decisions and to further family goals in practicing a life based on living their values.

The following are two further takeaways I plan to use from the book.

When your child asks a question relating to finances, respond eagerly with “Why do you ask?”

This question can help you see into the world of your child. Many questions asked around money originate from perceived differences, or a fear of not having enough. For example, your kid may see the number of toys another kid has and think, “They must be rich, and since I don’t have as many toys, I must be poor.”

By not blurting out a response that cuts the conversation short, we can create a more constructive and meaningful moment.  We can teach our children more about the world around them, and how each family’s values shape the experiences and physical things they decide to spend money on.

You may find it quickly becomes clear whether your own spending priorities match your values as you impart wisdom to your kids.

*the circle of life/money*

Use allowance as a tool, and reconsider tying your child’s allowance to chores

If chores need to be done to keep a home running, why do we tie this to an expectation of compensation through allowance? Ron walks through an alternative way to consider allowances and how allowances might change as a kid grows up.

He believes in beginning an allowance as early as when a kid can count, or when the child is in first grade, at the latest. An allowance can be used as a tool to show budgeting through a three-bucket system (spend, give, and save).  You can also allocate raises over time and facilitate an example of compounding interest.

I appreciate Ron’s approach to early involvement.  Often when I chat with young tech employees starting their first job, many habits are already taking root. Our chat revolves around determining goals and reevaluating which habits are aiding them or causing roadblocks when it comes to money.

The book makes it easy to start early by detailing common questions parents are asked over time, giving creative ways to incorporate savings and budgeting into a kid’s daily life, and describing how to build delayed gratification skills.

Often, things are simple and clear to our kids – either we are doing what we say, or we are not. I encourage you to grab a copy of the book and check it out!

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The above discussion is for informational purposes only. Recommendations are of a general nature, not based on knowledge of any individual’s specific needs or circumstances, and there is no intent to provide individual investment advisory, supervisory or management services.

Family Saving Styles: Top 5 questions to ask yourself

Every family is different – different in how they spend money, how much money they make, and their comfort level with discussing money.

A friend of mine recently got married and they still keep everything separate, with one in charge of utilities and another the mortgage, etc. They are thinking of combining finances, but just aren’t sure what the best method is for them.

How do you determine what you are most comfortable with? Start by asking yourself 5 questions:

  1. Do I feel like I need to be in control of the money I have? Why?
  2. Does combing our funds make me feel like I’ve lost control of our money? Why?
  3. What are my partner’s views on money and how it should be used?
  4. Does either of us budget on a high level how much we should save and do we each stick to those goals?
  5. How comfortable am I with my partner’s spending patterns?

Money is really about security and/or freedom to do what you want.

It is always a good time to ask yourself what the best set up is for you both when it comes to money.  Knowing how you feel about money will help reduce the friction with your partner.

My husband and I started with entirely separate finances when we first got married – this was most comfortable at the time.

Then, we quickly found value in a joint account where we each contributed the same percentage of our salary with the remainder separate. The joint account was used for joint expenses – rent, groceries, dining out together, utilities, etc. Expenses we clearly shared.

Some individuals feel better with an ‘allowance system’ where each individual receives a set amount of fun money and the remainder goes into joint accounts. This way, if one partner has a habit of spending whatever money is in their account, then they have a smaller amount to work with.

Others are comfortable with combining all funds into joint accounts and going from there.

Money is an ongoing topic in relationships and it is important to start out acknowledging the truth of how you feel about money, how you treat money, and how you can work together to set an optimal method for you both.

Intuitively we think of money as adding and subtracting – logical and known. What we don’t account for are the emotions and stories we each tell ourselves about money based on our past experiences.

If you are nervous about starting these conversations with your partner alone, reach out to us.

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The above discussion is for informational purposes only. Recommendations are of a general nature, not based on knowledge of any individual’s specific needs or circumstances, and there is no intent to provide individual investment advisory, supervisory or management services.
If you live in a state with it’s own form of state AMT, this further complicates the matter. AMT calculations can be difficult and you may need professional help, such as that of an accountant, tax attorney, or someone experienced in complex tax returns.

Our Philosophy

We believe everyone deserves a complete financial plan. A plan that incorporates your values, goals, and finances to help you lead a wealthy life now and build future wealth. 

Our financial plans:

  • define the current factors affecting your ability to build wealth,
  • provide recommendations and a clear framework for tackling your concerns in living a wealthy life, and
  • create an action plan for ongoing progress over our relationship.

Then, we continue to evaluate, implement, and monitor financial changes through ongoing progress meetings.  We review major changes in your personal life, identify your priorities, and review progress toward building your wealth.

Our journey together is about being honest on where you want to go, where you are now, and making a best guess on how to bridge the gap.  We help you balance the trade-offs in what you have to invest: money, time, energy, and skill.

We believe traditional Wall Street doesn’t fit Gen X & Y: the attention you receive should not be based on the amount of your investment assets.

Money decisions are often driven by desires to feel happy, safe and secure. By having a plan that matches your values with how you spend your money, you save time and increase happiness.  Everyone deserves happiness!

Our fee structure is built on the complexity of your current financial situation – not based on your investment assets.

We believe each person and family is different: you should work with someone you can trust and who is an expert in your situation.

It is important to work with a financial advisor who understands your current situation.  Do they have the professional network to assist you with your individual needs and do they understand your major concerns?

We focus on tech entrepreneurs and employees because we understand many of their particular issues:

Do you work for Amazon or Microsoft?

We understand their benefit plans and integrate RSU planning into our financial process.

We also know how to help you transition from the corporate life to a new adventure if this is your main goal.

Do you work for a local early startup? 

If your startup does not have a 401(k) yet or provides limited health benefits, we can help you determine the best options for you.

Want more information on your stock options?  We can help you think about the tax effects of these and make a plan for when to exercise your vested options.

Are you an early stage entrepreneur struggling with cash flow?

We can talk through budgeting, short term debt options, and how to think about your savings during this hard time.

As your career progresses, we assist you with tax planning for founder’s stock, minimizing risk in your portfolio, and protecting your family long-term.

Find out more about us on our About Us page.

Why I created SeedSafe Financial LLC

I am a fan of personal financial education.

I grew up in a self-employed single-mother home, where the highs were amazing and the lows were extremely stressful. I was my mother’s helper in her business and kept track of the business finances in QuickBooks.

In our home, business finances equaled personal finances, and we were often in the red.   The stress this caused in our relationship and our relationships with others was constant.  This period of my life is known as “hormonal teenage years x 10”.  While financially treading water, my mom tried to give us a typical Texas suburb life.

When I arrived at college, I realized I wasn’t alone in my financial confusion.  At my orientation, banks handed out credit card applications and promised a free t-shirt for signing up. Students fumbled through living independently on a budget or worked to make ends meet while attending classes.  None of us knew the best way forward in optimizing our financial situation.  In the case of money, we felt like 1st graders learning multiplication without a teacher’s guidance.

So I dove in and learned as much as possible about personal finance.  I taught seminars on credit scores and what to look for in credit card applications.  I worked as a book keeper for small businesses and developed my tax skills working on tax returns for a regional accounting firm.  Then, I began consulting with self-employed individuals in tax planning for their businesses.

Clearly, this was the time I found my inner tax geek and I never looked back.  I went on to work in public accounting, continued consulting with small business owners, and become a financial advisor.

SeedSafe Financial LLC is the result of my ongoing passion to make financial decisions attainable for Gen X and Y.

We help you figure out your financial options.

My goal is to change the way the financial industry thinks. Instead of doing real financial planning with only $1 million+ clients, I believe we should be proactive in helping you build wealth early on.

SeedSafe Financial LLC meets you where you are (before you are a zillionaire).  We work with Gen X & Y when you have time on your side for small changes to make a huge impact on your life.

Schedule a discovery call with us to learn more!