Five Steps to Fall In Love with Your Finances

Guest Post: The Wealth StylistNatasha M. Campbell, Success and Money Coach

Sticking to a budget is one of the biggest money challenges many Americans face. According to a 2013 Gallup poll, only one in three American households prepare a detailed, monthly written, or computerized, budget that tracks their income and expenses. That means 2 out of 3 households say, “No, thank you” to having a plan for their money.

For many, the “B” word (budget) signals deprivation. If you’ve ever been on a diet, you tend to crave what you shouldn’t have because it’s a form of restriction. The same feeling can be true with your money. Instead of looking at ways you can cut things out of your life, a spending plan focuses on meeting your financial goals and values.

Here are five simple steps to create a spending plan to give your dollars some direction.

What is Your “Why”?

Identify what you want to accomplish. Why does it matter? When you look back a year from now, how will you know that your efforts have been successful? Envisioning your “why” will motivate you to take action. Keep a money journal to remind yourself of your goals and recognize your progress.

Where Are You Now?

To get a hold of your finances, it is important to know where you stand. Review your spending to see if it’s in line with your priorities. Consider printing the last three months of your bank statements and list everything you spent during that timeframe. A 90-day financial view will provide a better understanding of your money. You may forget transactions that only happen on a quarterly basis, like getting the oil changed on your car or receiving bonuses from work.


Image via CreateHer Stock

Identify What’s Not Working

Take inventory of what’s not working in your financial life that is moving you away from your goals. What is holding you hostage from improving your finances? Do you spend out of control when you’re emotional? Simple reflective questions will help you become aware of what’s stopping you from creating a healthy relationship with your money.

 Choose a Customized Plan

There is more than one way to create a spending plan, so choosing the right one is important. The 50/30/20 rule is personally one of my favorites. This rule breaks down spending habits into three categories with percentages. Based on your income, essential expenses (like utilities, food, and rent) make up 50% of your spending. Unnecessary expenses (cable, the internet, cell phone) make up 30% of the budget, and future goals (debt payments, savings, retirement fund) make up the remaining 20%.

In the event of a major life experience, a bare bones budget is ideal. A bare bones budget is based on your lowest possible monthly income. If you’re self-employed, work on a commission-based job, or find yourself in financial distress due to job loss or a medical condition, this type of plan will work best for you. Create a plan based on absolute necessities, such as food, shelter, clothing, and transportation.


Image via CreateHer Stock

Track Your Progress

Stay connected to your plan. If you deviate from your spending plan, breathe and forgive yourself. Remain committed to the process. Review your spending plan and make healthy adjustments as needed. Every month is different, so update your spending plan accordingly for special occasions.

Natasha M. Campbell, the Wealth Stylist, is an entrepreneur, wife, mother, personal finance coach, and certified educator. You can find her @wealthstylist  just about everywhere!

Top Three Reasons to Contribute to your 401(k)

There has been a recent push to ditch the 401(k) for its sexier cousin, the Roth IRA. Keep in mind, sexy doesn’t always get the job done. I helped my mom retire after bankruptcy only using her 401(k). Before I get into the top reasons to contribute to your 401(k), what’s a 401(k) plan? A 401(k) is an employer sponsored retirement plan where the employee contributes a portion of their salary and selects their investments from the plan’s investment options. Many of the 401(k) rules also apply to 403(b) and 457 plans.

You are taxed unless Congress says you aren’t

When Congress gives opportunities to defer taxes, it’s usually in your best interest to take it. Tax deferral is arguably the best 401(k) benefit.


The money you contribute to your 401(k) is not subject to federal income tax. Pre-tax contributions provide two benefits. First, contributions reduce your taxable income. Second, you receive the benefit of growth without taxes (tax deferred). In retirement, you control your taxes by only paying taxes on money withdrawn.

A close second to tax deferral is the Roth 401(k), growth and earnings are withdrawn tax-free. Roth 401(k)s have been an option for employers since 2006, but it’s still not offered by many. Unlike the Roth IRA, the Roth 401(k) has no income limits; a huge win for high-income earners.

Additionally, saving money after taxes requires more money than saving on a pre-tax basis. For example, for someone in the 25% tax bracket, an $18,000 pre-tax contribution would be a $13,500 after tax contribution. Finally, it’s difficult to calculate the true value of tax deferral until retirement. Using the above calculation, at a 7% rate of return over ten years:chartIf the retiree’s tax bracket is the same as it was during her working years, it’s a wash between Roth contributions and pre-tax contributions. But if the retiree is in a lower tax bracket in retirement, which is usually the case, deferring taxes provides more money for retirement.

More money for your retirement goals

The main difference between an employer-sponsored plan and IRA (Traditional or Roth) is the increased contribution limits. In 2017, the contribution limit for employer-sponsored plans is $18,000 and an additional $6,000 for “catch up” for employees over 50. Conversely, an individual can only contribute $5,500 with an additional “catch-up” of $1,000 for those over age 50. If you are single and make more than $117,000 ($184,000 for married couples), then your ability to contribute to a Roth IRA diminishes. Luckily, even if an employee makes too much for the Roth IRA, he/she can still take advantage of the Roth 401(k).

No free money for IRAs

Employer contributions to your retirement might seem altruistic but they aren’t. Employers receive a tax deduction for contributions and contributions help recruit and retain employees. Since IRAs are held and managed by an individual, there are no employer contributions.

There are two different types of employer contributions, non-elective and matching. Although you are entitled to non-elective contributions even if you don’t participate in the plan, these are less common than matching. To receive a match, the employee has to contribute to the plan. According to the 56th Annual Profit Sharing and 401(k) survey, 95.3% of 401(k) plans made matching contributions. The most common match calculation is 50% of employee contributions to the first 6% percent of an employee’s salary.

Although there are legitimate concerns about 401(k) fees and limited/poor investment options, neither should stop you from contributing. There are ways to mitigate them, which I will discuss next week. We need all the financial goodness we can get when it comes to retirement. High contribution limits and employer contributions mean more money directed toward your retirement goals. Tax deferral is a tool that can save you money now and during retirement. My suggestion is to contribute to your 401(k) and IRA after figuring out what the best mix is for you.

What is Stock: Through the Eyes of Apple

The original post was written as a guest post for The Millennials Next Door published on January 8, 2017. 

Millennials grew up with Apple products. We played the Oregon Trail on Apple Macintosh computers at school. And I will never forget trading in my bulky Discman for a brand new iPod.

What company is more successful and more synonymous with being a Millennial than Apple, the “world’s largest information technology company”?

Apple’s beginnings

Forty years ago, Steve Jobs and Steve Wozniak created a business to sell the Apple I computer. They established Apple Computer Co. as a partnership, an unincorporated business where the members (partners) agree to share equally in profits and losses. To fund the partnership, Steve Jobs sold his Volkswagen, and Steve Wozniak sold his Hewlett-Packard calculator. Per the terms of their agreement, written by the third partner Ronald Wayne, Jobs and Wozniak each received a 45% interest with the remaining 10% to Wayne. Shortly after formation, unwilling to take on the risk of being personally liable for Apple’s debts, Wayne sold his interest to Jobs and Wozniak.

From members to shareholders

Within months of forming the partnership, it became clear that Apple Computer Co. needed to incorporate. In January 1977, Apple Computer Co. became incorporated as Apple Computer Inc. Incorporation under the laws of California provided several significant benefits. As partners in Apple Computer Co., Jobs and Wozniak had unlimited liability for the company. Incorporation separated and protected their personal assets from Apple’s potential creditors.

Jobs and Wozniak became shareholders, or stockholders, instead of partners. Mike Markkula, a business-savvy entrepreneur, took a 1/3 share after contributing $250,000. As shareholders, they were still entitled to a share of Apple’s earnings and profits but shielded from Apple’s creditors. Apple’s business was doubling every four months, and more infusions of cash seemed necessary in the future. As a corporation, Apple could raise money by selling ownership, or equity, through company stock. As a result, from 1977 to 1980, Apple’s equity owners increased dramatically.

When Apple offered its shares to the public on December 12, 1980, it created approximately 300 millionaires. After the initial public offering (IPO), anyone could become an owner of Apple ($AAPL) by purchasing shares on the stock exchange. The shares were offered at $22 a share. In 2012, in anticipation of the release of the iPhone 5, Apple traded at over $700 a share. Two years ago, Apple had a one-for-seven stock split, essentially dividing the stock price by 7 and making more shares available to the public.

What’s the value in being a shareholder?

Dividends! Shareholders are entitled to dividends, a share of the corporation’s earnings and profits. As an owner, shareholders are subject to the ups and downs of business. Some years the corporation may not be profitable. For example, in 2002, Apple was not profitable and traded as low as $7 per share.

Growth! The main reason people invest is the potential for growth (capital appreciation). Many investors have an expectation that the value of their shares will increase over time. Be warned, just like a stock can go up, it can also go down.

The Stock Market is driven by market sentiment, or emotion, just as much as company performance. As a result, fluctuations in stock price, up or down, are not necessarily reflective of a company’s performance. However, many stock price movements are the result of how the market reacts to company news that may affect its bottom line. Occasionally, as much as investors believe their investment will go up, there are cases where a company loses everything and goes bankrupt. In which case, you’d lose the money you invested in the company. Therefore, it’s important to invest in companies that you know and understand instead of your neighbor’s hot stock pick. Need help with picking your first stock? Look here.

We don’t buy toys; we buy stock

Each Christmas, I try to balance fiscal responsibility and good gifts. This year I adopted the mantra, “We don’t buy toys; we buy stock.”  Because my niece LOVES American Girl Dolls, I wanted to give her the gift of ownership.

Can I buy stock in American Girl?

Before I could get excited about my idea, I had to see if public ownership in American Girl Dolls was available. Luckily, American Girl has been a wholly owned subsidiary of Mattel (NASDAQ: MAT) since 1998.

The frustration of buying stock for a child


Buying stock for a child can be difficult. Because a child cannot hold assets directly, an adult must set up a custodial account for the child’s benefit. To open the account, you need the child’s social security number, which most parents are reluctant to provide. The adult (or the adult you designate) has to manage the assets for the child until she reaches the age of majority, either 18 or 21, depending on the state.

Stockpile makes gifting stock easy. So easy that, even if I didn’t do my research on American Girl, I could have typed it into the search bar on Stockpile’s website and Mattel would have shown up. After picking the stock, I had the option of buying a gift card for $25, $50, $100, up to $1000. The price of the gift included the cost of the trade (commission). Although Stockpile allows the purchase of fractional shares, I don’t recommend anything less than purchasing at least one share. Stockpile provides the most recent cost per share, and you should consider adding 10% to help guard against price fluctuations. I understand that purchasing at least one share doesn’t make a high priced stock like Google, which closed at $789.81 per share on Friday, December 23rd, an option for most. I can assure you there are a lot of low-priced options available.

Points to consider…

Immediately after my Christmas morning purchase (the epitome of last minute shopping), my Godsister received an email with instructions to set up an account and buy the stock. Although I loved the ease of Stockpile’s process,  I do have several concerns. First, my Godsister was not required to purchase Mattel stock. She could have purchased any stock Stockpile offered. Buying another stock could have defeated my intent of gifting at least one full share of stock. With the option of buying another stock, she could have purchased a fraction of a share of an expensive stock such as Google. Second, she could have completely undermined my intent of gifting wealth by buying a store gift card. The final option, the most bothersome, was the option to regift.

Thankfully, my Godsister and I have the same idea when it comes to wealth, and the Stockpile gift alternatives were never an option. But it’s something to consider before using Stockpile. It was a great experience overall. I received an email from Stockpile the Wednesday after Christmas that the gift was redeemed. My Godsister confirmed that my niece is an owner of Mattel stock.



Six Things to do in 2016 to blow your 2017 out of the water


It’s the last month of 2016, the year that has worn out its welcome. Instead of waiting for 2016 to pass, begin working on 2017 today. If you are serious about changing your life in the New Year, getting started on January 1st is too late. One of the reasons why 92% of New Year’s Resolutions fail is because people fail to plan. Lay the groundwork now. Here are six things to do before the end of 2016 to get a running start on 2017.

1. Protect your stuff


Image courtesy of CreateHER stock

A major unexpected expense can quickly derail your finances. The American Red Cross reports almost 47,000 fires occur during the winter holidays, costing over a half billion dollars in damage. Although not as devastating as a fire, damage caused by bursting frozen pipes averages $5,000, according to The Insurance Institute for Business & Home Safety. Unfortunately, theft also increases during this time of year.

Although many of these losses are unavoidable, you can lessen their impact with proper insurance. If you own your home, homeowners insurance is paramount. If you rent, your landlord’s insurance only protects his or her investment, not your personal belongings. Thankfully, renters’ insurance is relatively cheap and can be bundled with your car insurance for extra savings.

2. Protect your credit

I recommend checking your debit and credit card statements monthly. But the holiday season requires more vigilance because ‘tis the season for credit card fraud. If you notice suspicious activity, notify your bank or credit card company immediately. The longer you wait to report, the more likely you could be stuck with the charges. Instead of using your debit card for online shopping, consider using a credit card and imposing a strict budget. If your debit card has been used fraudulently, it could take weeks to recover your cash.

Also, if you haven’t already, consider getting your annual credit report through, “the only source for your free credit reports authorized by Federal law.”

3. Clexit (Clutter Exit)

I’m a fan of double duty tasks. This year I reduced clutter and increased my cash by selling on eBay and Poshmark. For clothing that is still good but not necessarily sellable, consider donating to your favorite charity. If you itemize your deductions, make sure this is done before the end of the year so you can deduct your contribution on your 2016 Tax Return. 

4. Holiday shopping budget

To avoid regrettable credit card bills in January, make an overall holiday spending budget for family and friends and stick to it. Although Black Friday and Cyber Monday sales have passed, there are still deals to be had, if you do a little research.


Image courtesy of CreateHER stock

5.  Everyday Budget

Without a budget, many people end up wondering where all their money went or how their credit card balance got so high. If you currently have a budget, review it to make sure that it’s still working for you. Get rid of unnecessary expenses; monthly subscriptions tend to be a major culprit.

To assist with the budget creation process, Certified Financial Coach and Author, Del Shawn Hayes, recommends,, and vertex42.

6. Take advantage of your employee benefits

On December 31st, many employee benefits expire. Most flexible healthcare spending account (FSA) balances expire at the end of the year with only a handful of employers allowing withdrawals up to March of the following year. Additionally, healthcare deductibles also reset at the beginning of the year, so if you can squeeze in a last minute appointment, your pocket and body will thank you.


Demystifying the Dow: What are they really saying on the Nightly News?

Every evening, the news unceremoniously reports on that day’s stock market performance. The market was up today xyz points. OR The market was down today xyz points. The night of November 22, 2016, the news was more spirited than usual as the market hit a historic high of 19,023.87.

What is the “market”? What are “points”? When it comes to your portfolio, should you care?


The Market

The “market” refers to the Dow Jones Industrial Average (“the Dow”). Arguably, the most watched stock index in the world. It was named for its creators, Charles Dow and Edward Jones, co-founders of the Wall Street Journal. The Dow was created in 1896 as a stock index focused solely on industrials. It has evolved into a barometer of the U.S. economy spanning multiple industries. To keep in line with the changing economy, Dow has had 51 changes since inception. The most recent change happened in early in 2015. The Dow removed AT&T (T), a telecommunications giant with a long history on the index, and replacing it with the tech behemoth, Apple (AAPL).

What’s in the Dow?

The Dow is composed of 30 well-established, high investment quality companies. So it shouldn’t be surprising that the decision makers, the editors of the Wall Street Journal, have chosen industry leaders which include Coca-Cola (KO), Nike (NKE), and Johnson & Johnson (JNJ).

Because the Dow is a price-weighted index, the higher priced stocks, such as Goldman Sachs and Boeing, have greater influence over the value and the movement of the index. The Dow’s early calculations merely added all of the stock prices together on the index and divided by the number of stocks. Voila! The Dow’s value for that day.

The Dow is now too complicated for a simple average to produce an accurate reflection of its value. A traditional average would miss stock mergers and stock splits. If these events were not calculated, the index would be useless. When an event occurs that changes a stock’s value, the Dow divisor (the number used to produce the average) is adjusted to accommodate that change.




Value of the Dow = (Sum of the shares prices of all 30 of the companies in the index)/Dow Divisor


The current Dow divisor is 0.14602128057775. With a divisor less than one, the Dow’s average will always exceed the total sum of the underlying stocks. Many analysts have said, but for stock splits and other share value reductions, this would be the actual value of the stocks on the index.  On Wednesday, November 23, 2016, the Dow closed at 19,083.18.



A point is essentially a number in the index value. The concept of a “point” doesn’t mean much unless it can be effectively used as a measure. Points are usually used to discuss a change in the value of an index.

The Dow closed on Monday, November 21, 2016 at 18,955.90. On Tuesday, November 22, 2016, the market was up 68 points to close at 19,023.87, to finish at its record-breaking high.

19,023.87- 18,955.90= 67.97 = 68


When it comes to your portfolio, should you care about the Dow?

Yes and no. The Dow is a good indicator of the economy. Although it is a good measure of the market’s strength, it’s probably not reflective of your personal portfolio. First, the Dow is only 30 stocks, so it is not representative of the entire market. If you have any mutual funds, your portfolio most likely has exposure to hundreds of stocks. For more accurate view of total market performance, look at the S&P 500, an index that tracks 500 leading companies which covers about 80% of the market.

Second, even if you own some of the stocks represented in the index, your portfolio will not necessarily reflect the gains or losses of the Dow. Remember, the Dow is an “average,” so even with Tuesday’s record high, major players- Pfizer, Visa, Johnson & Johnson, Merck, and IBM- were down.
Third, the market has surged since the Presidential Election. I was caught off guard (see here for my commentary on The Huffington Post) and so were many analysts. The upswing has been lead by just a few industries, banks and companies related to manufacturing and construction.

How can you get in on the fun?

SPDR’s exchange traded fund (ETF), DIA, tracks the Dow. However, since the market is at record highs I’m not advocating purchasing the index right now. Remember, buy low and sell high.

Brexit: Investment Strategies from the Ashes

Two days before the historic vote, the Daily Mail backed Brexit, Britain’s EXIT from the European Union. It was not until then did I consider the actual possibility of a vote to leave. The referendum, the question presented to the general population for a vote was, “Should the United Kingdom remain a member of the European Union or leave the European Union?” In my mind, the answer was simply, “Remain.” Until Thursday night, it seemed a majority of Brits had the same answer as I did. When the results poured in, one of us got it wrong.

“It’s not whether you’re right or wrong, but how much money you make when you’re right and how much you lose when you’re wrong.” Stanley Druckenmiller

On the evening of Thursday, June 23, 2016, the world learned the United Kingdom voted, 52%-48%, to leave the European Union. Chaos ensued the next day in the world’s financial markets. The Nikkei 225, the Tokyo Stock Exchange index, ushered in its biggest decline since 2000, dropping almost 8 percent. The DAX, the German stock market index, closely followed with a drop of 7 percent. In the United States, the Dow Jones Industrial Average fell by 600 points (3.39%), its biggest loss in 10 months. In a strange turn of events, the U.K. market over performed, closing up 2%. However, the pound, the U.K.’s currency, fell to a 31 year low, down 10%. The Financial Times reported that the Global markets took a two trillion dollar Brexit hit. In short, the world’s markets tell a compelling story, the U.K. got it wrong and will pay severely.



If you’ve got money, you vote in. If you haven’t got money, you vote out.”

In the days before the vote, The Guardian described Brexit as “a kind of misshapen class war.” Although class disparities and irrational xenophobia were the proximate causes of Brexit; the stage for Brexit was set twenty-four years ago in the Treaty, which created the European Union (“E.U.”).

One of the five aims of the E.U. was to establish “an economic and monetary union” with the ultimate goal of creating a central currency. Not eager to lose the pound, the U.K. conditioned its membership in the E.U. on an “opt-out” provision. This clause enabled the U.K. to participate in the E.U. without being mandated to join the currency. It was not a surprise when the U.K. decided not to opt in. Since the E.U.’s inception, the U.K. has taken an a la carte method to adopting its rules and regulations while still enjoying all of its benefits including increased investment in UK firms and access to a single market of 500 million people.

Look no further than the pocket of an average Brit for another, major contributing factor to the Brexit vote. While the majority of the E.U. member countries use the Euro, the U.K. was the largest non-participating member. Shared currency would have provided an actual identity between the U.K. and other member countries and might have made some voters consider how leaving would seriously affect their pocket. Now the country is headed into a recession. Those who championed Brexit will also bear the brunt of its burden. The average voter did not seem to understand, or appreciate, the implications of leaving the E.U. and now are poorer for it.


Where are the investment opportunities?

Brexit fueled a domino effect sell-off in the world’s financial markets; first Japan, then Germany, and finally in the US. In the second trading day after Brexit, the markets continued to slide as the world’s economic fate was still very uncertain.

Equities (Stock)

   Considering Warren Buffet’s advice, “buy when everyone else is selling,” now is a good time to buy. Regarding what to buy, Bank of America’s Chief Investment Officer, Chris Hyzy, suggested that investors should diversify into “higher-quality investments” and look to long-term investment growth strategies. Investors have been using that strategy as the U.S. market posted losses for the second day as they sold off “risky” holdings. Considering the geopolitical landscape, it seems fitting that U.S. and British banks have posted the biggest losses. For guidance on picking stocks, see my blog post, Three Steps to Picking Your First Stock.


In times of economic turmoil, many investors flock to “safe” assets such as the Japanese yen and gold. However, a strong yen is problematic for both Japanese companies and the Japanese economy. A strong yen makes it expensive for global companies to do business with Japanese companies making it difficult to spur the Japan’s economic growth. Tony Roth, CIO of Wilmington Trust, observed, “[i]f the yen does not weaken, the Japanese economy is going to get destroyed.” To counteract this, the Bank of Japan will sell off yen to lower the price. On the other hand, the pound will continue its unassisted downward movement as the U.K. heads into a recession. Between the two currencies, I would strongly consider a short position in the Yen.  Primer on the Forex Market.