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Happy Thanksgiving from Sharkey, Howes & Javer

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Each Thanksgiving we take a moment to reflect on how thankful we are for all the blessings in our lives, from our health and our families to life’s simple pleasures: a fresh cup of coffee, our favorite songs playing on the radio, and a good piece of chocolate. Of course, we could never forget about our amazing clients. We’d like to take this chance to say a special thank you for the trust that you place in us, the stories you share, and the relationships we form. We’re humbled and proud to know and work with you, and it’s our goal every day to do the very best that we can for you.

We wish you a very happy Thanksgiving.

To celebrate the holiday, our office will be closed on Thursday and Friday, November 23rd and 24th. We’ll be excited to be back at work for you again on Monday, November 27th.

Here are a few fun facts about Thanksgiving to share with your friends and family:

  • The first TV dinners were made by Tyson using leftover Thanksgiving turkey. (Source)
  • Even though the first Thanksgiving was in 1621, it wasn’t an official national holiday until 1863 – 242 years later! (Source)
  • We have Sarah Josepha Hale, the author of “Mary Had a Little Lamb”, to thank for campaigning for 36 years to make sure our favorite day of eating was recognized. (Source)
  • The lucky recipient of the President’s annual turkey pardon gets a pretty cool vacation out of the deal as well, including past destinations like Disneyland, Disney World, and Mount Vernon. (Source)
  • Black Friday isn’t just the biggest shopping day of the year, it’s also the busiest day of the year for plumbers. (Source)
  • Turkey isn’t to blame for making you sleepy; a big, carb-heavy meal is more likely the culprit. (Source)

Anticipating Black Friday and Cyber Monday Madness: How to Keep Your Spending Under Control

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For many Americans, the final days of November mean only one thing: the beginning of the year’s greatest shopping frenzy. Black Friday and Cyber Monday bring with them great deals on holiday gifts, high-tech toys, and everyday items. There’s just one problem: as many as one third of consumers go over budget when holiday shopping, and it can be even harder to stick to your budget when you’re standing in the middle of a crowded store, caught up in the moment, face-to-face with big sales. If you’re worried about overspending on the biggest shopping days of the year, these strategies can make it easier to stick to your plan.

1. Set a Budget

Know how much money you have to spend. Ideally, you should determine how much you’re going to spend before the holiday season arrives, rather than waiting until Black Friday sales begin. It can also be helpful to decide how much money you want to spend on everybody on your list. If you go under budget in one area, then you may have a little extra to spend in another, but knowing how much you’re expecting to spend over the course of the day can help you avoid accidental overspending. Make sure that your budget includes everything that you will spend on those big shopping days.

2. Make a List

One of the hardest things about the Black Friday madness is wandering through a store filled with great deals and not knowing what to get. Making a shopping list that covers everything you plan to accomplish beforehand will help you stick to your set budget. This list should include:

  • For whom are you shopping?
  • What you’re planning to buy and alternatives in case your first choice doesn’t pan out
  • Prices for all of those important items, especially the ones that are selling at a deep discount
  • What stores you plan to visit
  • What time your stores open for holiday sales (including whether or not you’re going to try to be there when the doors open for specific doorbuster items)
  • What time the sales end

As you’re looking over your list, make sure you take the time to note how much you’re able to save by shopping on Black Friday or Cyber Monday. In some cases, the best deals may even happen before Black Friday, so be sure to keep your eyes open in the weeks leading up to it.

3. Carry Cash Only

If you’re worried that you’ll give in to overspending, forget the cards and only bring cash with you. This will prevent you from adding credit card debt: the average American with credit card debt can add more than $900 in holiday spending. Shopping with cash helps you visualize how much you’re spending and prevents you from pulling out your card for “just one more purchase” or going “just a little over” at each store.

4. Leave the Kids at Home

Going shopping with the kids is often a hazardous proposition during the holiday season. They see things that they want in every store, and what they don’t want for themselves, they want for someone else! If you must take the kids shopping on Black Friday, give them their own cash to use and don’t budge on the amount they’re allowed to spend.

5. Compare Prices Before You Shop

Before you dive in and make Black Friday and Cyber Monday purchases, make sure you take the time to compare prices at different stores. One store’s $10 deal could be offered for $5 at another store, and on big-ticket items, the difference can be even greater.

Inside the Economy: Is Another Recession Likely?

By | Economic Discussion, Economy, Larry Howes, SH&J Blog | No Comments

On this week’s episode of Inside the Economy, we look at the size of the capital markets in the United States and compare them with other economies around the world. We discuss some of the factors that have made the U.S. an economic powerhouse compared to the rest of the world. U.S. consumer spending is at all-time highs and in tandem the personal savings rate has decreased over the past few years. What kind of impact can this have on the economy moving forward? Tune in to find out more!

Assets, Income, and Financial Aid

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Starting October 1st of a student’s senior year of high school, parents are able to start filling out the FAFSA (Free Application for Federal Student Aid) form that will evaluate the student and family’s financial condition to determine eligibility for college financial aid.  Both assets and income are considered to calculate a family’s EFC (Expected Family Contribution) to college expenses.  Financial aid is then typically awarded in the form of grants, scholarships and loans (click here to read more on the types of financial aid awarded).  The student’s freshman year of college is the base year for which these award packages are constructed so it is important to understand how assets and income are counted on the FAFSA form in order to maximize a student’s financial aid offering.  

Parent Owned Assets and Income

Parent owned assets are counted at 5.64% towards a family’s EFC.  Retirement accounts such as 401(k)s, 403(b)s, Traditional IRAs and Roth IRAs are not included on the FAFSA form, but non-retirement accounts and liquid accounts, including brokerage accounts, and 529 Plans are included.  The value of family businesses may also be considered, as well as the equity in a vacation home.  However, equity in a primary residence is excluded.  In addition to assets, 22%-47% of parent income can be counted in calculating EFC.  When considering income, figures from the parent’s “prior-prior” tax return are used. Therefore, a parent with a college freshman in October of 2018 would be filing the FAFSA form as early as October of 2017 but using 2016 tax return information.

Student Owned Assets and Income

Student owned assets are included at a rate of 20% and income is counted at 50%.  Custodial accounts as well as student checking and bank accounts are included as a student asset whereas interest, dividends, and capital gains reported on a student’s tax return are counted as income.  The student’s prior-prior tax return is used in the same way it is used for the parents in calculating EFC.

Grandparent Owned Assets

Grandparents commonly put aside funds for their grandkid’s education in the form of a 529 Plan.   A grandparent-owned 529 Plan is not counted as an asset on the FAFSA form. However, once distributions are made, they are considered a gift to the grandchild and included as student income at the 50% rate on the FAFSA form. Because student income is counted at a higher rate than parent assets or income, it may make sense to transfer a grandparent 529 Plan to the parent’s ownership prior to the student’s freshman year, or wait until junior or senior year of college to distribute the funds.

The higher a family’s EFC, the lower the amount of needs-based financial aid that is likely to be offered.  Financial aid is also first come, first serve so apply early.  Call Sharkey, Howes & Javer at 303.639.5100 to speak with a CERTIFIED FINANCIAL PLANNER™ and discuss the opportunities for proactive planning when determining who should help with saving for college and how the accounts should be titled and used.

Common Identity Theft Scares and How You Can Protect Yourself

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By now, you have probably heard about the enormous 143 million-person Equifax data breach, which exposed the personal and financial history of millions of Americans. According to Equifax, the breach happened during the three-month period of May through July, and the hackers accessed personal information such as Social Security numbers, names, addresses, birth dates, and driver’s license numbers.

Though an attack of this magnitude is uncommon, identity theft has become an everyday occurrence. This is why it is so important to remain vigilant and know how to protect yourself and your personal information from theft. While the risk of identity theft always exists, learning to recognize the most common threats is the first step to protecting yourself.

Spam Email and Phishing

Ever since the emergence of email, spam messages have been clogging our inboxes every day of the week. This annoyance is also a very serious security threat. Many of these emails ask for identifying information, such as our birthdates, addresses, names, and credit card information, which can then be used against you.

Phishing attacks can come in a variety of other forms besides email including IMs, pop-up notifications, and fake websites, which may ask for identifying information ranging from your SSN and credit card number to seemingly mundane information like your mother’s maiden name or the town you grew up in. This information can then be used to steal from you directly or gain access to your accounts.

Phone Scams

Phone scams are a commonly-known practice of a person trying to persuade their victim to divulge personal information over the phone. Often, the caller acts as a government agency, well-known utility company, or other authority figure in the hopes that you freely give them your personal information.


Hackers can also gain access to your personal information via malware, which are dangerous programs that can install themselves on your computer. Once that happens, they can monitor your activity, record your personal information, or even hijack your entire machine.

How to Protect Yourself

With so many threats out there, protecting yourself from identity theft can seem like a daunting task. However, there are a handful of simple ways to help protect yourself from a variety of attacks.

Learn How Agencies Will Contact You

Both the government and private companies have standard procedures for how they will contact you. For example, the IRS will never call you without first sending a letter. If you’re contacted by somebody claiming to work with the IRS over the phone, it should immediately raise a red flag. If you’re not sure whether or not the person contacting you has a legitimate reason, the safest bet is always to reach out to the agency yourself, using their official phone number or mailing address, and asking for clarification.

Keep your SSN and Other Identifying Information Private

Your Social Security Number is one of the most important pieces of identity that you have. If someone steals it or gains access to it, they can cause long-lasting damage that you will spend months cleaning up. Keep your Social Security card in a safe location and always be extremely careful, only giving out your number when it’s absolutely necessary.

Keep Your Antivirus and Antimalware Software up to Date

It’s much easier to prevent a computer virus than it is to remove one, and with new threats coming out every day, it’s never been more vital to keep your antivirus and antimalware software up to date. With only a few minutes of effort, your software can easily be set to update itself and scan your computer automatically, helping protect your computer from online threats.

Monitor Your Credit Report

Every U.S. citizen is entitled to a free copy of their Equifax, Experian, and TransUnion credit report every year from Ordering one report every four months from one of the three credit reporting agencies will help you stay vigilant all year long and detect potential identity theft as soon as possible.

In addition to your annual credit reports, there are several other free options that can keep you updated on a more regular basis. Some credit cards and bank accounts include your FICO credit score with your monthly statement. There are also free credit monitoring services, such as CreditKarma, that can give you a more accurate picture of any new accounts that may have been opened in your name.

Freeze Your Credit

Equifax, Experian, and TransUnion will allow you to freeze your credit for no cost. After your credit is frozen, no one can take out a new line of credit in your name (including yourself). If you need to access your credit, you can place either a temporary or permanent “lift” with the assigned PIN number. Requesting a “lift” may come with a small fee (such as $10 depending on your state of residence). Freezing your credit will block any new lines of credit from being opened under your name and is one of the safest ways to keep your credit report clean. However, even with a security freeze, it is still important to monitor any suspicious activity on all existing accounts.

Inside the Economy: October 23, 2017

By | Economic Discussion, Economy, Larry Howes, SH&J Blog | No Comments

In this week’s Inside the Economy with SH&J, we take a deeper dive into the unemployment numbers coming from the U.S. Bureau of Labor Statistics to find out what factors are truly behind the low unemployment rates. In addition, we discuss why Americans have taken on 25% less debt in 2016 as compared to 2010. The United States has been in a rising rate environment for the past few years, but it has gone mostly unnoticed to the general public. What are the chances the Fed raises rates again before the end of the year, and will we feel the effects of higher interest rates? Listen in to hear more on these questions by tuning in!

The Numbers Behind Direct Sales

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You may have noticed an increase in the number of your friends, family, colleagues, and neighbors selling a variety of products or services on your social media over the last five years. Newer companies such as Rodan & Fields, Thirty-One, Stella & Dot, CAbi, Jamberry, LuLaRoe, and Beach Body have joined the longer-standing companies such as Arbonne, Avon, Mary Kay, Herbalife, Amway, and Tupperware. According to research from the Direct Selling Association, the number of people involved in direct selling has increased from 15.6 million in 2011 to 20.5 million in 2016, a record number. The industry is growing because of social media and the low costs of entry, which have made joining direct sales companies easier than ever before.

When our clients ask us about the financial pros and cons of direct selling, we suggest turning to the facts. Here are a few statistics:

  • U.S. Retail sales is $35.54 billion, with wellness products topping the charts in category sales. (Source)
  • Of the 20.5 million people involved in direct selling in 2016, 4% are full-time, 22% are part-time, and 74% are simply “discount customers” (only became a consultant for access to a personal discount). (Source)
  • In 2016, 74% of the people involved were female, and 26% were male. (Source)
  • In 2016, 72% of the people involved were selling “person-to-person”, 21% were selling by the “party plan”, and 7% comprise the “other” selling category. (Source)
  • In a survey of 33 tax preparers who filed 14,400 tax returns collectively in 2002, zero tax returns showed a profit from a direct selling company. (Source)
  • The odds of winning a hand playing blackjack is 42.42%, versus the odds of profiting from a typical direct selling company is less than 1%. (Source & Source)
  • An average of 99.7% of people involved in direct selling lose money. (Source)
  • An estimated 90% of direct selling participants have quit their business after 5 years, and 95% after 10 years. In comparison, 50% of small businesses have failed after 5 years, and 64% have failed after 10 years. This is one of the reasons why direct selling participants don’t qualify for SBA loans. (Source)

If you are considering participating in a direct sales business opportunity, the Federal Trade Commission offers a guide for evaluating the proposed opportunity. Finding out as much information as possible will help you make an educated decision before jumping in.

6 Facts Everyone Should Know About Medical Bills

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Everyone faces medical bills eventually. Whether it’s a planned expense, like the birth of a child, a routine checkup, or an emergency, medical bills can cause serious financial heartache. Be sure to familiarize yourself with these basic facts about medical bills and you can save yourself a lot of trouble.

1. There’s a Difference Between a Copay and Coinsurance

When you choose your insurance, your copay and coinsurance rates are both key pieces of information to understand. Copays are a flat fee that you’ll pay each time you have a procedure or pick up medication. Your copay won’t change regardless of the full cost of your bill, allowing you to more easily manage your medical expenses. Coinsurance, on the other hand, is the percentage of the total bill that you pay personally. As the cost of your medical services goes up, so does your coinsurance payment. Knowing how your insurance will bill you can help you plan for your bills.

2. In-Network and Out-of-Network Coverage Are Different

Your insurance company has pre-negotiated discounts with healthcare providers in their network called “in-network providers”. On the other hand, “out-of-network providers” may not discount the services you’re receiving (even with a referral). As a result, you’ll likely end up paying more. Make sure to ask if both your medical facility and your doctor are in-network before you have any work done and you can save a lot of money and time.

3. Medical Bills Are Negotiable

Medical care is expensive, especially if your insurance coverage is weak or if you don’t have coverage at all. Fortunately, many offices and facilities will allow you to negotiate the cost of services, if necessary. Go into your negotiation as early as possible, be honest with your provider about what you can afford, and discuss repayment terms that will fit in your budget. This is particularly beneficial if you have old medical debt that needs to be paid. Providers will often be willing to accept less than you owe if you can pay it all in one lump sum.

4. Paying with Cash Can Yield a Lower Cost

Speaking of negotiating, paying with cash on the spot is often one of the best deals you can negotiate with your providers. Cash payments remove credit card fees as well as offering an immediate source of income for the practice, and many doctors are willing to offer substantial discounts for this convenience. Of course, there is one catch: because you’ll be paying on the spot, you won’t get any help from your insurance provider and it won’t count towards your deductible. You’ll have to decide if cash payments are the best option for your circumstances.

5. Medical Debt Impacts Your Credit

Whatever deal you work out between your provider and insurance company, it’s important to stay on top of your payments. If you have medical bills that you aren’t able to pay on time, they can be sent to collection agencies and reported to the credit bureaus, creating a negative impact on your overall credit score. Late payments could ding your credit and make it harder to buy a home, finance a car, rent an apartment, or apply for an assisted living facility. It’s vital that you don’t allow medical bills to go unpaid. If you’re having trouble paying, try to make arrangements with your medical provider to establish a payment plan and make sure you don’t fall behind.

6. You Need to Confirm That Your Bills are Paid in Full

Medical billing is complicated. There’s nothing more frustrating than thinking that you’ve paid off a bill completely, only to discover months later that it’s gone to collections due to missed payments. Whether your payment was lost in the mail, your insurance didn’t cover their full amount, or the medical facility entered the wrong information, it’s much easier to clear up any confusion before you’re sent to collections. Be sure to track your progress while paying off bills and get confirmation once your bill is settled.

Inside the Economy: October 9, 2017

By | Economic Discussion, Economy, Larry Howes, SH&J Blog | No Comments

In this week’s Inside the Economy with SH&J, we examine S&P 500 companies’ record dividend payouts so far this year. What does this do to U.S. stock prices and can these record payouts continue? Many of the major economies across the globe are seeing expansion at the same time that the U.S. economy is growing. Are foreign companies taking part in offering dividend yield to investors similar to U.S. companies? Find out the answers to these questions and more by tuning in!

Alzheimer’s: Associated Costs and Steps to Lowering the Risks

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We recently wrote on “Caregiving for Elderly Parents” and the emotional and financial burden it can have on individuals and family members. In this article, we take a look at Alzheimer’s, specifically in regard to its attribution to total long term care claims, the cost, and steps that can be taken to reduce the risks of Alzheimer’s.

In a 2013 Cost of Care Survey report released by Genworth Financial, studies have shown large increases in the number of individuals age 65 and older affected by the disease. As stated in the report, “46% of Genworth’s total claims in payment, and 50% of all claims dollars, are due to dementia, including Alzheimer’s.” Along with the increase in the number of claims made, “The Alzheimer’s Association also reports that the cost of care related to Alzheimer’s, including health care, long term care, and hospice, will soar to a projected $1.2 trillion per year by 2050.”

With such high annual costs nationwide, you may wonder, what does that mean for individual costs? In the 2017 Alzheimer’s Facts and Figures report released by the Alzheimer’s Association, “researchers compared end-of-life costs for individuals with and without dementia and found that the total cost in the last 5 years of life was $287,038 per person in 2010 dollars for people with dementia and $183,001 per person without dementia but with other conditions.”

The cost of care for individuals with Alzheimer’s is not covered by Medicare or Medicaid, which can severely strain a family’s finances, especially if high levels of nursing, assisted living, or home health care are required. It is rare that families have enough personal wealth to cover all of the costs. Pre-planning for such care is important. A CERTIFIED FINANCIAL PLANNER™ professional can help review your individual situation to evaluate the need for purchasing a long term care insurance policy to cover some of the costs and help preserve assets for spouses or family members.

While there is not yet a cure for Alzheimer’s, research has found that certain basic guidelines can help reduce the risks and predisposition to Alzheimer’s disease.

The Alzheimer’s Association put together the following tips to help improve brain health:

  1. Schedule time for cardiovascular exercise.
  2. Participate in formal education, in any stage of life.
  3. Quit smoking.
  4. Maintain good cardiovascular health.
  5. Eat a balanced and healthy diet.
  6. Get quality sleep.
  7. Treat depression.
  8. Stay socially engaged.
  9. Challenge yourself.

Even though scientists and doctors continue to research and develop new treatments, don’t wait to plan and prepare for potential long term care issues. Call Sharkey, Howes & Javer at 303-639-5100 to put together your own plan with one of our CFP® professionals.