Valentine’s Day is tomorrow. It is one of those marketing opportunities for businesses to encourage us to show our love and affection for the special person in our life by buying gifts, going out to dinner, or doing something celebratory. It usually involves a couple. I don’t think Valentine’s Day was designed for singles. In fact, lots of folks find Valentine’s Day to be less than fun and charming. Relationships evolve and change, marriage is not as popular as it once was, and for those who do marry, the divorce rate remains high.
I wasn’t thinking much about Valentine’s Day when I read the article Divorcing Women, Five Signs You Might Need a New Attorney. Please click here. The article reminds us about the importance of shifting from seeing a divorce purely from an emotional aspect to a practical one. We need to be conscious and focused when working on the details of how things will work and be settled.
Thinking about how Valentine’s Day isn’t fun for many who are going through divorce and reading the article reminded me of a woman who called me asking for help. I had a listing in the phone book under financial services and women. This had an unexpected result. I often received phone calls from women looking for social services (such as battered women’s shelters), wanting counseling about family matters, looking for help in starting businesses, and a variety of other topics. This woman was concerned about how her marriage was ending and she couldn’t understand why someone didn’t make her husband stay. She and her husband had children. He had business interests and had been quietly moving the assets with the intent of hiding them from her. She didn’t work outside the home. It seemed to her that there was someone else in his life, but she was only guessing. When I explained to her that she needed to seek legal advice, she told me it wasn’t a problem, her husband had a lawyer and she could talk to him. I explained that she needed a lawyer to represent her, someone whose interest was in protecting her, not in protecting her husband who seemed to be doing a good job of that already. It was a heartbreaking conversation. She wondered why nobody seemed to care about keeping families together and was there someone who could help fix this. I suggested seeking out counseling from clergy or a licensed therapist.. That option was rejected. I took a deep breath and told her that she should talk to a lawyer because he or she would understand the situation without emotion and help her to negotiate as an equal in the situation. Separating emotions from finances is always difficult, but really challenging when it involves the dissolution of a marriage, children, and denial.
It has been many years since that telephone conversation. I am hoping the caller found an attorney who could help her navigate the circumstances of the end of her marriage and move on to a happier time. It would have been hard for her to see a better future on that day we talked, but I am hoping that tomorrow she will be having a wonderful Valentine’s Day celebration with someone special.
Until next time
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The Roth Individual Retirement Account (IRA) became available in 1998. It was named after its legislative sponsor, William V. Roth Jr., a Republican senator from Delaware. The Roth IRA was part of the Tax Relief Act of 1997. Sometimes we let the words for investment terms roll off our tongues without really knowing what they mean. This one is easy, it was named after someone who saw a need for an investment which had the potential of remaining tax-free during both the accumulation (adding to it) or distribution (taking money from it) phases. Of course there are rules to make that happen. As the saying goes, there is no free ride.
First, the money contributed to a Roth IRA is called after tax money, meaning the investor already paid taxes on it. Second the money needs to conform to a few rules to avoid paying taxes. I like the simple way an investment firm, Invesco, has explained it. Please just click here to learn more.
Whether we like it or not, investors often start with the long-range plan of investing money and leaving it there until age 59 1/2 and later and then life catches up with them. A recession hits, a job is lost, a major medical expense is incurred, a business fails, or some other major financial need comes along. Sometimes the investor is looking over all of her or his investment accounts to figure out how to best manage a short-term situation by accessing retirement accounts. Yes it could and has happened to investors, maybe even to you.
The information in the link is very useful as you work with your financial professional to sort things out. It is best to make an informed decision and be aware of the consequences so you can plan on them.
Until Next Time
Please remember, this is a short overview and questions relevant to personal finances and specific to the individual should be addressed to an appropriate professional to ensure that the situation has been evaluated carefully and appropriately.
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I was attracted to a post in the Huffington Post which acknowledges that many Americans are not having their basic banking needs met by the existing services. A few years back I probably wouldn’t have even noticed an article about the subject. Yes, I have seen payday loan advertisements, been at the local super market where people cash paychecks, or even seen check cashing businesses in the strip mall. However, they were just part of the background scenery. Everyone in my life knows her or his way around banks, mortgage companies, brokerages, and all that the financial world offers. Of course they offer it to us because it is profitable.
My perspective changed when I moved to a small town located on the coast of the Gulf of Mexico in Texas. The people with money are visitors, business owners, and those who own resort properties. The local workforce includes a high percentage of low-income people or those living at poverty level. No longer was I living in the suburbs where having a checking account with a debit card is a fact of life for high school students. I found myself standing in line at the post office with lots of people who were getting money orders to pay bills and send money to family members. Sometimes it actually looked more like a bank than a place to send and receive mail. That’s why this concept of basic and uncomplicated banking services at the post office seemed logical to me.
Over time I learned a lot about why the low-income people around me avoided traditional banking systems. One reason is that often they were undocumented and want to remain invisible. Even if the person does have legal status, often he or she was brought up in a family where the parents were undocumented. The children simply emulate what the parents did and the cycle of using cash, money orders, and expensive loans is perpetuated. People living in poverty or on very low incomes see banks as scary places which they don’t trust. Even those of us who are middle-income and above often have that same feeling. Things have just gotten very complicated.
According to the article, collectively those households which use alternative banking products spent about $89 billion in 2012 on interest and fees. That represents a huge cost for people with lower than average incomes.
Please click here to read the entire article. The concept of tying simple and affordable banking services to the local post office is being done elsewhere successfully. There is a very good chance that those people currently using alternative banking methods would be more trustful of a place they have visited throughout their lives, the post office, than they would be of banks which really don’t want them there anyway. There are benefits to the U.S. Postal System too!
Until next time.
To order my book, please click here.