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Brittany Samples

Financial Planning for Blended Families: 3 Stages of Life

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Planning Your Family Finances | Sharkey, Howes & Javer

The idea of a “traditional” family is ever evolving, and the United States Census Bureau has the research available that clearly outlines the profound shift in family formation. The reports show that families made up of two married heterosexual parents raising their biological children under age 18 now comprises only 20% of households, down from 40% in 1970.

As the traditional family reforms into modern day living, the financial challenges felt by blended families continue to increase. Although there are many definitions of blended families, we are focusing on second marriages and parents sharing custody of children from previous marriages for the purposes of this article.

There is no clear cut “right or wrong” way of managing household finances. Each family needs to find the method that works best for them. We have helped many blended families organize their financial lives, and here are a few themes we find in three different general stages of life.

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Inside the Economy with SH&J: January 30, 2017

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This week on Inside the Economy, we discover why the age of low inflation may be ending and how yields are likely to be pushed higher. The Dow crossed above 20,000 for an all-time high on January 25, 2017, creating a stir in media headlines. Which sectors are being positively and negatively impacted by the incoming administration’s new policies? Listen in to find out more!

5 Important Questions to Ask Yourself Before Deciding to Go Back to School

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Five Financial Questions to Ask Before Going Back to School | Sharkey, Howes & Javer

Going back to school can give you a sense of accomplishment and open the door to new opportunities, but is going back to school for a new or advanced degree worth the investment? We all know pursuing a degree can have a strong impact on finances, career and family.

Here are our 5 questions to ask yourself before going back to school:

Why do I want to go back to school?

Exploring why you want to go back to school is an important and necessary first step. Are you interested in learning something new? Are you looking to move to a new career? Maybe you are hoping an advanced degree will give you a significant income boost. Whatever your reasons for thinking about going back to school, take some time to write them down. Discuss your list with trusted mentors and family members to get their honest input. Their advice could help you find other avenues to reach the same result without the cost and time required by pursuing a degree, or determine that a degree is your best option.

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The Aging Brain and Decision Making

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Regardless of age, we all have moments when we walk into a room and forget what we were looking for or start a sentence and forget what we were going to say. However, as we get older and these occurrences perhaps become more frequent, it is important to consider how our aging brain may be impacting other areas of our lives.

In 2015, the Center for Retirement Research at Boston College released a report on how a decline in cognitive skills affects financial decision making. The study conducted an annual review of a group of aging individuals’ financial literacy or knowledge, confidence in making financial decisions, and level of responsibility for managing their finances.

The study found that while a decline in cognition lead to a significant decline in financial literacy, it did not reduce individuals’ confidence in their ability to manage their finances. As a result, many individuals maintained primary responsibility over their finances despite a decline in their ability.

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Our Thoughts on the Dow and 20K

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You’ve likely heard noise in the media recently about the potential of the Dow hitting 20,000. We recently wrote about the history of the Dow and want to remind you that the media has a tendency to add hype where it is not warranted. In our reading over the weekend we found an article that illustrates our feelings about the Dow and the recent hype around it quite well.

In the article, Why Dow 20k doesn’t matter, published in the Chicago Tribune, author Jill Schlesinger said, “I think the Dow is perhaps the least meaningful U.S. stock index available. Sure, it’s got history on its side — it was created by Charles Dow in 1896 in order to provide investors with a snapshot of how the overall stock market was doing. But it includes only 30 large companies, and considering that Amazon, Google and Facebook are not part of the Dow, it is hard to make the case that it reflects the broader market.” (source)

The full article can be read here and we think it is a worthwhile read.

 

Inside the Economy with SH&J: January 16, 2017

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

This week on Inside the Economy, we review how a strong U.S. dollar and higher interest rates have affected the exporting sector of the U.S. economy and borrowing costs over the last year. Can you guess what the next bubble may be? Listen in to find out, and hear more on expectations for manufacturing’s share of total employment here in the U.S., as well as what a cut in corporate tax receipts could mean for Federal Revenue.

Buying and Selling Real Estate During the Winter Months

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Winter months are not known to be peak real estate markets. Most of us are settling in for the holidays and not thinking about moving. The good news is smart buyers are often looking to buy during this season and selling your house in the off-season is often less stressful than during peak months.

Benefits for Buyers:

Motivated sellers
Off-season sellers are not usually selling because they want to. Either their home has been on the market for a few months or they may need to move due to a job transfer or change of circumstance. Winter sellers are frequently more motivated and may be more inclined to negotiate with buyers.

Better service
By waiting until the winter to start your home search, you are likely to receive better service. Real estate agents, inspectors, appraisers and moving companies have more availability and mortgage brokers have fewer files on their desk.

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Dow 20,000 and the History of the Dow’s Milestones

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The Dow is within “striking distance” of reaching 20,000, a milestone that many investors may feel as though they have been waiting forever for (source). As we are potentially days away from the arrival of the Dow 20,000, and while this is merely just a number – a big, round number – we consider the history of the Dow Jones Industrial Average and the time it took to reach some of its past milestones.

Historically, the index has struggled reaching major milestones. The Dow first reached 100 in 1906, but after many fluctuations, it wasn’t until the mid-1920s before it convincingly traded higher than that level, and it permanently broke above it in 1942 (source).

This was the case for the Dow 1,000 as well. It initially hit the 1,000 mark intraday in 1966 but did not close above that mark until November 1972. It wasn’t until 1982, 16 years after initially reaching 1,000, that the Dow finally traded above that mark for good (source). It took roughly 15 years from first closing above 1,000 in 1972 for the Dow to progress another 1,000 points to the 2,000 milestone, yet only four years to go from 2,000 to 3,000 points.

The Dow first hit 10,000 in 1999, but the average fell below that level for 11 years, until 2010 when it took residence above that milestone. Now, seven short years later, the Dow is about to hit 20,000.

The chart below shows the important Dow milestones and additional key dates that defined what the Dow is today:

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Tax Smarts

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As we settle into the new year and resolutions roll around once again, there’s a good chance that “figure out my finances” makes its way back to the top of the list. Something that you could consider doing differently this year is proactive tax planning instead of reactive tax planning. Here are four ways you could get ahead of your taxes in 2017:

1. Take the Surprise Out of Taxes
If you have a close estimate of the income you will receive in 2017, print a two-page 1040 form and start working through a very basic tax calculation. You can print other forms as needed depending on the complexity of your tax return. Estimate income and deductions to the best of your ability. Compare the estimated Federal tax liability with your current Federal withholding to determine if you are over- or under-withholding, and make proactive adjustments at the beginning of the year. We suggest the same exercise with your state tax forms. Note: Although the 2017 1040 is not yet available, the 2016 1040 will give you a useable guideline.

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Inside the Economy with SH&J: January 3, 2017

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

In our first Inside the Economy of the new year, we discuss our economic outlook for 2017. The U.S. is about 7.5 years into the current business expansion, which is approaching the 10-year record from the 1990’s but will the S&P 500 continue to increase in valuation? What can we expect for mortgage rates this year? Listen in to hear more on these topics in our first economic update of 2017!