As a mom, I’m always thinking about the legacy we leave for our kids. It’s not just about the photo albums and family heirlooms anymore; it’s also about our digital lives. That’s why I want to talk to you about something super important: digital executors.

What Exactly IS a Digital Executor?

Okay, let’s break it down. You probably already know what a traditional executor does. That’s the person who handles your will, makes sure your assets are distributed properly, and takes care of all the “stuff” after you’re gone. Well, a digital executor is similar, but they specifically manage your digital assets.

Think about it: what does your online life look like? It’s a mix of social media accounts, email, digital photos and videos, online banking and investments, websites or blogs, domain names, subscriptions, and even loyalty programs and digital wallets. A digital executor is the person you trust to sort through all of this, according to your wishes.

Digital Executor vs. Traditional Executor: A Modern Tag Team

It helps to think of your traditional and digital executors as a team. The traditional executor handles the physical world – the house, the car, your belongings. The digital executor takes care of your online world. Both roles are essential to ensure a smooth transition for your loved ones.

Why on Earth Do You Need a Digital Executor?

You might be thinking, “Do I really need someone to manage my Facebook account?” And the answer is, it depends. But there are some compelling reasons to consider a digital executor.

One significant reason is managing online financial accounts. Accessing accounts, paying bills, and handling investments can become very complicated without proper authorization. A digital executor can streamline this process, ensuring that your finances are handled efficiently.   

Preserving memories is another crucial role. Our photos and videos are often stored digitally now. A digital executor can help gather these memories, organize them, and ensure they’re passed on to your family.

Protecting your digital identity is also essential. Inactive online accounts can be vulnerable to hacking or identity theft. A digital executor can close these accounts, protecting your personal information.   

If you’re a blogger, freelancer, or online business owner, your digital assets are your livelihood. A digital executor can ensure that your website, social media, and online business operations are managed or transferred according to your wishes.

Ultimately, a digital executor can simplify the complex, bringing order to the potential chaos of our online lives, saving your family time and stress during an already difficult period.

Stories That Hit Home

I’ve heard some heartbreaking stories about families struggling to access a loved one’s digital life. Families facing difficulties accessing a deceased person’s online accounts is a common issue. These situations can add unnecessary grief and frustration to an already emotional time. A digital executor can help prevent these problems.   

Choosing the Right Person for the Job

Okay, so you’re convinced you need a digital executor. Now, who should you choose? This is a big decision, so here are some qualities to look for:

• Utmost Trustworthiness: This person will have access to incredibly sensitive information.
• Tech-Savviness: They should be comfortable navigating different online platforms.
• Organization and Attention to Detail: Managing digital assets can be complex.
• Willingness to Serve: Being a digital executor is a responsibility.
• Clear Communication Skills: They may need to communicate with various online platforms and family members.
• Emotional Resilience: Dealing with someone’s digital legacy can be emotionally challenging.

It’s also a good idea to choose someone who is relatively young, lives nearby, and has some understanding of your wishes regarding your digital assets.

How to Appoint a Digital Executor (The Practical Stuff)

Okay, let’s get down to the practicalities. How do you actually appoint a digital executor? There are a few options:

• Will: You can include a section in your will that specifically designates a digital executor.
• Digital Estate Plan: A separate digital estate plan is a more comprehensive approach, outlining your wishes for each of your digital assets and providing instructions.
• Online Platform Tools: Some social media platforms and other online services allow you to designate a “legacy contact” or similar role.

Key Elements of a Digital Estate Plan

If you choose to create a separate digital estate plan, here are some key elements to include:

• Designation of your digital executor
• Inventory of digital assets (usernames, passwords stored securely, etc.)
• Instructions for each asset
• Legal considerations (consult with an attorney)
• Regular updates

Storing Your Information Securely

This is crucial! You’re dealing with sensitive information, so you need to store it securely using a password manager, encryption, and secure physical storage, and by enabling two-factor authentication.   

Communicating Your Wishes

It’s not enough to just create a digital estate plan. You also need to communicate your wishes to your digital executor and your family.

Where to Find Help

Planning your digital legacy can feel overwhelming, but you don’t have to do it alone. Here are some resources that can help:

• Estate Planning Attorneys: An attorney can help you create a legally sound digital estate plan.
• Financial Advisors: A financial advisor can help you with the financial aspects of your digital estate. You can find helpful resources at [Pathfinder Planning’s website](https://www.pathfinderplanningllc.com/).
• AARP: They offer valuable information on digital estate planning.   

A Final Thought: It’s an Act of Love

I know this can be a tough topic to think about. But ultimately, planning your digital legacy is an act of love. It’s about taking care of your family and ensuring that your online life is handled with respect and consideration. It’s about preserving memories, protecting your loved ones, and providing peace of mind. And as a Mom, I can’t think of anything more important than that.

Pamela J. Horack, CFP® of Pathfinder Planning LLC provides personal financial planning advice and investment management for a simple fee to young adults and working families in North and South Carolina through group classes, one-on-one planning, and ongoing advice.

Citations:

[1] AARP: What Happens to Your Social Media When You Die?

[2] Nerdwallet: How Digital Estate Planning Can Protect Your Online Life

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Understanding your emotions, and learning to manage them, is a great advantage when investing. Much of portfolio theory and investment research is based on what a rational person would do. But people are not rational, particularly when it comes to their money.

Nobel prize winner Daniel Kahneman and Amos Tversky studied risk behavior and applied it to the economics of investing. Their research forms the basis of behavioral finance and how people apply mental shortcuts to investing as opposed to an analytical and deliberate strategy. Being thoughtful about your investing, even when you are afraid, can lead to long-term gains.

Let’s focus on the emotional side of portfolio management.

Risk Preferences

Before investing, we spend time discussing your comfort level with risk so we can better understand how you may react under different market circumstances. This is where your emotional response to the ups and downs of the market really come into play. When markets fall and you are excited because you have an opportunity to invest, you probably have a high risk tolerance. If you get scared during market downturns and feel like the sky is falling, you are most likely in the low tolerance category.

Additionally, we consider your timeline for investing. If you need short-term funds, we would want to invest conservatively, or make sure you have cash on hand. For longer term needs, we may invest more aggressively. 

Another part of your risk profile is your capacity for investing. Think of this as how much you can afford to lose. For example, if you are retired with a small income and only $100K in investments, you may want to be conservative as you cannot afford to lose those funds. On the other hand, suppose you have a large steady pension along with Social Security and real estate income. If you have the same $100K in savings, you may be able to invest more aggressively as a loss would not have the same negative impact.

Finally, education helps you become comfortable with stocks and investing. Learning increases your understanding and your comfort with the risks in all markets.

Manage Behavior

Our behavior often works against us when investing.

When we listen to the news headlines, we might hear that stocks are going to soar this year. Or, more often, the markets are going to crash. Maybe you feel like you have a strong insight into a particular business sector, so you focus only on those stocks. These ideas make us want to buy or sell in an attempt to take advantage of the business cycle. However, this is hard to do.

You need to manage your emotions when you are investing. Focus on the things you can control, not on markets and news. Don’t worry about how a stock performed yesterday. It may react very differently today. 

A client told me that when Trump was first elected president, she sold out of the markets because she was afraid everything would crash. Stock markets were booming. So, when Trump was elected for his second term, she felt like the economy would be great, so she purchased tech stocks. The magnificent seven declined about 11% in his first 100 days. Her emotions failed her investing decisions.

It’s difficult to decide the right time to sell out of stocks during a business cycle. Often, we see clients sell out of fear. When clients want to do this, we have to ask: if you get out now, how will you know the right time get back into the market? It’s even more difficult to determine when to buy back in. Essentially, you would need to be correct twice without the benefit of hindsight. By having a diversified portfolio calibrated to your big picture goals, you do not need to focus on market timing.

One of the benefits of being well diversified is not having to react to markets. We encourage our clients to tune out the noise they hear from the media and pundits and continue on their current investment track. 

One tool we use to keep your portfolio on track is a simulation of your investment results with hundreds of potential variables. This allows us to factor market changes into your investments so you can be more confident that your plan will withstand daily volatility changes, regular market price pullbacks, and random catastrophes. Your plan is built to withstand those. While we don’t know exactly what it will look like next time the market is shaken by volatility, we do know it will happen and we have a plan for it.

Embrace Patience

Investing and trading are two different activities. Investing is boring – like watching paint dry. You set up your investments and wait. Changes are made when your circumstances change. 

Trading, however, is exciting. Look at websites such as CNBC.com and YahooFinance.com. They are busy, have lots of details and numbers, and they let you know what’s going on. Now, look at a sports website such as ESPN.com or YahooSports.com. They are busy, have lots of details and numbers, and they let you know what’s going on. Now check out Stake.com, a gambling website. Same thing. These sites are all designed to make your interest into a game of chance.

Trading is a game. Investing is a long-term strategy. 

Markets will work for you, but only when you are patient. Remember – it’s not timing the market, but time IN the market. We design portfolios for the long term and encourage patience.

Discipline

Creating a portfolio that works for your personal situation is a thoughtful, rational process to meet your personal goals, reduce costs, and diversify across multiple investment categories. This is the first step, which then needs to be balanced with the emotional side of investing.

Maintaining your portfolio requires discipline to stay on track when times are uncertain and markets are volatile. Having a rational portfolio that fits your risk comfort level is the first side of the equation. Maintaining the discipline to keep your investing on track over time is more difficult as it means taming our emotions during periods of exuberance and turmoil. Keeping the rational and the emotional balanced is the key to success.

Pamela J. Horack, CFP® of Pathfinder Planning LLC provides personal financial planning advice and investment management for a simple fee to young adults and working families in North and South Carolina through group classes, one-on-one planning, and ongoing advice.

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This is where we help.

We are here to help clients understand how their portfolios work, and educate them on markets and products.

Much of portfolio theory and investment research is based on what a rational person would do. The “rational person concept” helps us build portfolios by assuming that investors act in their own interest, make logical decisions, and have access to relevant information.

Let’s focus on the rational side of creating a portfolio. 

Goal Based Strategy

We have always been a “planning first” firm. To us, this means that we create a financial plan first, and then determine the products or investments needed. This step-by-step process allows our clients a sense of financial wellness and gives them clarity to see how products and investments fit into their overall picture. Having the big picture prevents clients from being “sold” products that are not the right fit.

Understanding your core values allows you to live your fullest life. When your finances match your ideals, you can live in alignment with the things that are important to you. Your values match your goals, and your goals match your passion and the life you want to lead. All of this is captured in your financial plan.

Having a portfolio that aligns to your goals and values gives you more assurance that you can meet your near term and long-term goals, while not sacrificing your family’s safety. This focus grounds your investing. When news is bad or things change, you can always go back to your plan and know that your investments have been factored in your overall direction.

Our younger clients are investing for retirement. This important goal is far in the future, and they understand the value of investing for their future life. For many of us, it’s drilled into our head – save, save, save.

Our retired clients, on the other hand, focus on the dual goals of not running out of money during retirement and minimizing taxes. This requires a different mindset, as well as a different type of portfolio. 

Each of these circumstances has clients investing differently to meet their goals, so their overall  plan affects their portfolio construction. 

Low-Cost Investing

When thinking of low-cost investing, most people immediately equate it with passive investing. While passive investments are inexpensive, it is not a “set it and forget it” solution.

While the passive investing approach hints at an index approach—like the S&P 500 or the Bloomberg Aggregate Bond Index—it doesn’t mean that there are never any changes to the portfolio or to the individual investments. While the individual investments may rebalance securities anywhere from one to four times a year, each fund may need to be replaced depending on markets, management, or your personal needs.

Choosing and Maintaining Low-Cost Investments

There is actually a lot that goes into selecting and maintaining a low-cost type of portfolio:

• We start with the rational process of creating the right asset allocation mix, which is done during the planning process.
• Next, we choose appropriate investments, such as mutual funds or ETFs, which meet your goals.
• We then allocate the right type of investments to the right type of accounts, known as asset location, to maximize growth and minimize taxes.
• We monitor your account over time and make asset allocation adjustments as needed.

We believe that the average person cannot outguess the market, which is why holding an index of funds for the long term is important. Markets tend to be efficient and move based on known information, so it’s extremely difficult for a person to make trading decisions that out-guess the market. By the time you know the information, it has already been factored into market prices. 

While we always start with a core set of passive investments, (often index funds,) we may use active satellite investments to boost performance. These funds may hold fewer, more targeted securities, which may be traded more often depending on the goal of the fund. Low fees are a hallmark of passive index funds. Active funds often have greater costs to account for greater management and trading fees. These funds can produce outsized returns depending on their purpose and structure.

Remember: the lowest cost funds do not always make the most efficient portfolio for your needs.

Diversification

There are multiple levels of diversification, which is a fancy word for “don’t put all your eggs in one basket.” 

First is your asset allocation. This is dividing your funds between stocks, bonds, and cash.

Next, each piece of your asset allocation is divided into smaller pieces. For example, stocks can be divided into US and International. US stocks can be further divided into asset classes of growth stocks, value stocks, mid-cap, and small cap.

By the time you get to the level of individual stocks, your overall pool of money is diversified across multiple asset classes and individual securities. You want to diversify across the investment universe. 

Diversification does not mean having multiple accounts at different banks and brokerages. That is just spreading money around and can be more expensive to track and maintain. It also does not mean purchasing investments that are unfit. If gold or bitcoin are not a fit for your plan because they are too risky, then you don’t need them for your portfolio to be diversified.

When a stock market index, such as the S&P 500, decreases, a diversified portfolio of 60% US and Foreign stocks along with 40% US and Foreign bonds will perform differently than the index. For example, this chart shows that when the S&P 500 was down 3.26% over a four-month period, a diversified 60 / 40 portfolio was up 0.24%:

Taking a diversified approach to investing allows you to take advantage of market upswings while having protection when markets are down. 

Discipline

Creating a portfolio that works for your personal situation is a thoughtful, rational process to meet your personal goals, reduce costs, and diversify across multiple investment categories. This is the first step, which then needs to be balanced with the emotional side of investing.

Maintaining your portfolio requires discipline to stay on track when times are uncertain and markets are volatile. Having a rational portfolio that fits your risk comfort level is the first side of the equation. Maintaining the discipline to keep your investing on track over time is more difficult, as it means taming our emotions during periods of exuberance and turmoil.

Keeping the rational and the emotional balanced is the key to success.

Pamela J. Horack, CFP® of Pathfinder Planning LLC provides personal financial planning advice and investment management for a simple fee to young adults and working families in North and South Carolina through group classes, one-on-one planning, and ongoing advice.

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Recently, I was talking to my son’s friend about what she plans to do after graduating high school. She has a variety of interests and ideas, from dentistry to cosmetology to real estate. Because she isn’t certain just yet, she is considering attending college and majoring in business as a “back up” plan.

This led me to wonder – why would you spend over $100K on a “back up” plan? What if you put that money toward your primary mission in life?

A high school counselor I spoke with told me about meetings where he knew the student wasn’t interested in college but the parents were adamant that their child would attend. This idea that you need a college degree is common among high schoolers, and their parents. It comes from an era when attending college was a recipe for success, and majoring in business meant you could succeed just about anywhere. 

But that’s not the case anymore. With the rising cost of higher education and the numerous opportunities available for young people, shouldn’t college be a career advancement tool instead of a fallback position?

The Myth of the Four-Year College

There is so much pressure on high school graduates to commit to a career path at a very young age. At age 16, one of my sons wanted to be a circuit court judge. Now, he’s graduating from college with a degree in Political Science. And he wants to write music and open a recording studio.

What I want parents to know is that teenagers are uncertain about their career path.  Additionally, college is not the only way forward for a recent graduate. If your child is not sure about their direction, maybe they need to take some time off school and work. They will likely find that knowing what they don’t want to do will help them hone in on what they are meant to do.

Sometimes, the right school choice is years down the road, or not at all. But using college as a backup plan instead of a clear and motivated way forward is a very expensive gamble. Focusing on what your child likes and what they want to do can lead them to a career in an unconventional manner.

Consider these numbers:

If we look at 100 high school graduates, on average:

• 40 do not go to college – they go directly into the workforce or the military.
• 15 will attend a 2-year technical or trade school. 
• 45 will attend a 4-year college. Of those:
  • 10 will drop out.
  • 23 will graduate in 4 years
  • 12 will take between 4-6 years to finish college. 

Given these numbers, college just isn’t for everyone.

The Changing Landscape of Education

Attending college is not a decision that should be made lightly. It’s not a backup plan; it’s a major financial commitment. Community college, trade school, joining the military and entering the workforce are all viable options. For some students, these are a much better fit than the traditional 4-year college education.

Tuition rates have jumped significantly over the past two decades, for both private and public universities. That’s a hefty expense for a student who is unsure of what career path they want to pursue. For college students who graduate with debt, beginning their financial life can be daunting, particularly if they are not excited about their prospective job.

There have been fewer students attending college in recent years. Enrollment peaked in 2010 and has been on a steady decline, falling by almost 15 percent, some of which is driven by reduced population. Experts expect those numbers to continue to fall as students choose other avenues. 

Options

To answer my earlier question, high school graduates don’t put money toward their life’s goals because they don’t have a clear picture of what that is. Most of them don’t have enough experience to know what their direction should be. And that’s OK. Some people can see their future clearly. For others, they will find clarity later in life. 

We are seeing trade school enrollment surging, and there has been a big jump in the number of students seeking professional certificates. Apprenticeships are coming into vogue as well. The reality is that you can learn almost anything on the internet, so students can focus on very specific niche jobs. Employers are also putting less emphasis on the 4 year degree, and paying closer attention to practical experience.

It’s perfectly normal for a teenager to be unsure of their next steps after graduation, but there are so many options beyond the traditional 4-year college degree. Encourage your student to weigh all their options and take time before making a future commitment. Their career and their wallet will thank you.

Pamela J. Horack, CFP® of Pathfinder Planning LLC provides personal financial planning advice and investment management for a simple fee to young adults and working families in North and South Carolina through group classes, one-on-one planning, and ongoing advice.

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Without a directional bearing, we are a car with no map, or a rudderless boat. We wouldn’t know if we are moving forward, backwards, or just spinning in circles. And if we’re not moving towards in a specific direction, then we really don’t know where we’re going. This is where financial goals are important.

Just as we need a map to get from point A to point B, setting goals shows us how to get where we want to go. Additionally, we need some real-time information, more like a GPS. We can increase our chance of success by boosting the information we include in our goals.

The acronym SMART gives us the guidance and direction we need to work toward our goals. SMART goals are:

What are SMART Goals?

This concept for goal setting is not new – it’s been around for a long time. You have likely heard of this before. But have you tried it in relation to your financial goals or life goals? Let’s break it down.

S stands for specific. Anytime you’re making a goal, you want it to be very specific. You don’t want to say: I’m going to lose some weight. That’s too vague. Instead, you want to say: I’m going to lose 50 pounds.

M stands for measurable. In our example we can measure 50 pounds using a scale.

A is for attainable. We want to make a goal that’s attainable, otherwise we can become frustrated if our goal is out of reach. Fifty pounds may sound way out of reach and not be a reasonable goal. Sometimes it’s better to start with smaller, achievable goals. Maybe your initial goal should be to lose 15 pounds. Small wins are psychologically positive and more motivating than large, un-attainable goals.

The goal needs to be relevant – R – to you. Losing 50 pounds may not be relevant if you only weigh 120. Maybe you need to lose 5 lbs. That would make more sense in this case.

And T is for time bound, or timely. We want to add a suitable time element to our goal so that we have an ending date; something to strive for. Our goal might read like this: I will lose 15 pounds in three months.

Examples

An example of a smart financial goal might be:

I will invest $1,000 each month until I retire at age 65 so I will have a million dollars in my investment account.

Here are some other examples that you can use to create your own SMART goals.

• We will go to the grocery store no more than two times per week.
• I’ll save $50 each month until Bobby is 18 so we’ll have 50% of his college costs on hand.
• Set an automatic draft to savings of $25 a month for car tires when they are needed.

Writing goals using the SMART acronym is a very rational and logical way of making decisions. Having this structure gives you the focus and direction that you need to get started.

Let’s work through one last example together.

“I want to save for vacation.” This is a vague statement, so we need to make it more specific. “I will save for a cruise to the Bahamas.”

Now, we need to make it measurable – “I will save $5,000 to go on a cruise to the Bahamas.” While measurable, that number may feel daunting. Let’s rephrase: “I will save $500 a month to go on a cruise to the Bahamas.”

Finally, let’s set a date. “I will save $500 each month for the next 10 months to go on a cruise to the Bahamas in April of 2023.”

That’s a SMART goal!

Thanks to Pam Horack, CFP® for this post. Pathfinder Planning LLC is a registered investment advisor in North and South Carolina. We serve young adults and working families by providing personal financial planning and asset management for a simple fee. www.pathfinderplanningllc.com

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Karina Moretz, ChFC®, shares her story of how Renters Insurance saved them thousands.

Pre-Insurance

Once upon a time I was a young, newlywed. Like many young couples, we started off our  married life with few possessions. In fact, we could fit everything they owned in our car. My husband was just beginning his Navy career and we were new to the state. 

When signing the lease for our first apartment, it was recommended (but not required) we purchase renters insurance. Money was very tight for us. I wanted to get it. We were adults now and it was the adult thing to do, right? My husband was against it since we didn’t have many possessions. First married argument right off the bat. 

Guess who won the argument? It wasn’t me. 

We made the decision to not purchase a renters insurance policy. 

That’s right, the wife didn’t win. Hey husbands, keep reading, there’s more to the story. 

For the next 18 months we worked our jobs and saved up money for our first “adult” purchase. A bed. We had been sleeping on an air mattress for six months before we had enough money saved to purchase a bed. What a wonderful sleep that first night was! A few months later we purchased a sofa. Goodbye camping chairs! A few more months and we had a dining table and chairs. It felt pretty good doing this “adulting” thing. 

After living in our apartment for a little over a year, we moved out of state and rented our second apartment. This one required renters insurance. I was happy to purchase a policy since we had more things. My husband, not so much. He looked around our home and didn’t believe the total of what we owned was really that much, even with the new furniture. He felt that if something did happen, we could easily replace the items over time just as we had done the previous year. 

Since it was a requirement to have renters insurance there was no argument. But I’m pretty sure I would have lost.

Post-Insurance

Since renters insurance was required, we purchased a small policy. By bundling it with our auto insurance we received a discount…. In the same amount of what the renters insurance policy cost each month. Ironic? I thought so. 

Six months later, we were traveling halfway across the country to visit our family. Five days into our visit, we woke to a 2:00 AM call from our property manager. There had been a fire at our apartment complex and they were contacting each resident. We cut our trip short and spent the next two days driving back home not knowing what we would find. 

Upon arrival, we discovered the entire building was destroyed. Three floors – twelve units. The third floor was entirely gone. The rest was rubble and frame. A total and complete loss.

Thankfully, no one was hurt in the fire. The complex had no space to transfer the twelve families and all the apartments in the area had waiting lists greater than two months. Where would we live? Where would we stay while waiting for a new apartment? How could we afford to live in a hotel for such a long time? This was before AirBnB’s existed.

After contacting our insurance provider, we learned our hotel and food would all be covered. That sounded great – almost like a free staycation!

Three days into eating out for ALL our meals, we were over it. We really missed vegetables. 

We detailed our possessions and the insurance company cut us a check. As exciting as a huge shopping spree for your home sounds, it was not fun. It was exhausting and emotionally draining. You don’t realize how expensive it is to outfit a kitchen and purchase a full set of linens and towels until you have to buy it all at once.

While I am so very thankful we were not home when the fire happened, there were still so many emotions in the aftermath of the fire. It took months to feel like I was somewhat emotionally recovered. I can’t imagine how much worse it would have been if we hadn’t had renters insurance. If we had no money to pay for the hotel or food all those weeks. If we had to outfit our apartment without the funds to do so. We did NOT want to go back to sleeping on an air mattress. 

Lessons Learned

Going through the process I quickly realized how “we don’t have much” is 100% wrong. I routinely thrift things for my home, especially my children’s clothing. And while thrifting is great, it doesn’t work when you need to quickly replace an entire room or home of basic items.

If you lost every piece of clothing you own and needed to replace a small basic wardrobe you wouldn’t have time to thrift, or even wait for a sale, to get everything you need. You’re at the mercy of what is in stock and the price at that time. My fire experience happened pre-Amazon days, so online shopping was nothing like it is now. Remember when Amazon was just books?

We are now both 100% on the same page about me always being right and him needing to listen having insurance coverage for all areas we need it. Health, auto, life, home, liability. No more (insurance) arguments. 

So get the insurance coverage you need. It might not be as expensive as you think.

And here’s your reminder to check your smoke detectors. 

Thanks to Karina Moretz ChFC® and Associate Advisor, for this post. Pathfinder Planning LLC is a registered investment advisor in North and South Carolina. We serve young adults and working families by providing personal financial planning and asset management for a simple fee. www.pathfinderplanningllc.com

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You’re used to the normal expenses such as dance tickets and apparel, sports fees, game tickets, and club dues. But, goodness, all that pales in comparison to the pressure you’ll feel left and right for the things you’ll be asked to pay for during senior year. Some of those expenses may even be mandatory depending on the school.

• Senior Pictures – formal school yearbook pictures and informal personal photography
• Homecoming / Prom
• Graduation Announcements – Don’t forget the Thank You notes and Stamps!
• Graduation Party
• Graduation Gift
• Class Ring
• Cap & Gown, tassel, cords, and stoles
• Senior Trip/Bash
• Yearbook
• Letterman jacket
• Miscellaneous Senior Gear – t-shirts, hats, keychains, etc.
• Diploma Frame
• Test fees – AP/SAT/ACT
• College Applications & Transcript fees
• Travel for College Campus tours

That’s a pretty long list that can quickly add up to thousands of dollars. Of course, your actual costs will vary widely based on your family and the high school. Some schools require seniors to purchase or rent a cap and gown, while other schools provide these for students. There may be things that families can easily decide to cross off their list as well.

Homecoming and Prom will probably be more expensive for girls than boys since girls tend to get their hair, nails, and makeup done. Guys usually rent their tuxedo while girls purchase their dresses, shoes, and accessories. Then there may be alteration fees for the clothing. Add in flowers, dinner, and a limo and these kids are getting a nicer date than I get these days.

Class Ring Expenses

I don’t believe in high school class rings! I know this may be an unpopular opinion. They hold sentimental value for many and are easily customizable to highlight your child’s high school memories, but I believe they are just a waste.

If your child attends college, they aren’t going to be sporting their high school clothing or accessories. After being worn for a short time during their senior year, those rings will likely collect dust at the bottom of a drawer or a jewelry box. I chose to not get one and don’t regret that decision, but if my child decides they really want one then we’ll have to add it to the budget discussion.

I also never hung up my high school diploma so I never needed a frame. But I did hang my college one!

Do you really want it?

The point is to really look at each of these optional expenses with your child and be realistic. Does your senior even want the item? Or is there peer pressure to get it? They don’t have to get something just because everyone else is getting it. The opposite holds true too, if they really want something.

Savings Options

Don’t forget to look for unconventional ways for things. Maybe your child doesn’t care to take senior pictures (beyond the obligatory yearbook photo), but you do. Hiring a photographer or using a studio can have drastically different costs. If that is out of reach there’s always taking them yourself or finding a photographer doing a model call. Often, you’ll only pay for the pictures themselves or a minimal fee if you agree to be a model for their portfolio.

Include your child

Be sure to include your child in these decisions. It’s a great opportunity for them to practice budgeting and planning for expenses. You could budget $75 dollars for a class ring and if they want a more expensive one then they can pay the difference themselves.

Personally, once my oldest is in high school we’ll start putting a small amount of money aside each month. Then, as we close in on senior year, we’ll jointly decide how to spend that money.

Thoughts from a Recent Grad

Donald has been in college for a year. Here are some of his reflections on his senior year.

“My Senior year experience was way different than I expected. I had planned on taking an extremely light course load and getting a full-time job somewhere working about 20-30 hours a week. As it turned out, my courses required a lot more time and effort than I thought, and I couldn’t find a job that I thought would work out for me, so I ended up with a lot of work and no money. What money I did have was used very sparingly.

I didn’t get a class ring or class jacket because I knew I wouldn’t really wear them, but I did pay for a few smaller trips and a larger one to Washington, DC. The trips were absolutely worth it! Experiences would be worth a lot more than anything else, so I happily coughed up the money. I spent a little bit on smaller things like nights out with friends for the same reason. I also spent some money on silly little things because it made for fun moments!

For Christmas, I bought a coffee maker and some coffee for my first period class to use because there were only seven of us and most everyone was a coffee person. I think the whole setup was about $35, but the fun we had with it was absolutely priceless! In short, if you’re unsure about buying a material item in your Senior year, don’t do it. Save the money for the moments you have with the people that matter.”

Be Frugal

Navigating the realm of your senior year high school expenses is a pivotal lesson in financial acumen. Before making purchases, pause and think about if you even want it—a sage strategy to curtail impulse spending. Look for budget saving opportunities that often hide in plain sight, but remember, frugality doesn’t equate to deprivation.

Allocate resources where they matter most by doing what’s genuinely meaningful to you. What expenses would you add to this list or surprise you the most? Have you found a creative way to pay for any of these expenses? What did you really care about but your child didn’t?

Thanks to Karina Moretz, Associate Advisor for this post. Pathfinder Planning LLC is a registered investment advisor in North and South Carolina. We serve young adults and working families by providing personal financial planning and asset management for a simple fee. www.pathfinderplanningllc.com

The post Navigating Senior Year of High School Expenses appeared first on Pathfinder Planning.

Not long ago, you would have one or all of the Big Three: Phone, Cable, & Internet. If you wanted to lower your cable bill you usually had two or three tier options to choose from, so it was rather easy to choose your offering.  

As streaming services became more popular, many customers ditched cable and satellite services in order to save money without sacrificing their favorite shows. The power to watch only what you wanted when you wanted was amazing and people became HOOKED on entertainment freedom.

Even if you subscribed to multiple streaming services, you were most likely paying less than cable costs at that time.

Consumers began to “Cut the Cord” as a way to save money while still enjoying their favorite shows. As demand increased, more companies and individual networks began to offer streaming services.

As the streaming field decoupled cable and satellite companies from entertainment networks, subscribing to your favorite shows became more complex. Many shows became exclusive to certain streaming platforms. You may have begun paying for services with other channels that overlapped another service just so you could see your favorite shows. Additionally, networks began producing their own shows. The industry that was dominated by the traditionally free networks ABC, CBS, and NBC, now encountered competition from tech upstarts. 

Pretty soon, what was a way to have television entertainment for a low price became more complex than and more expensive. 

Evaluate Your Entertainment Needs

So, do you have any idea of all the services you are subscribed to? What are you paying in subscription streaming fees? Can you list them all right now? Did you forget any? Don’t worry, I did when I worked on this.

I KNOW I have two subscriptions through Amazon and I couldn’t tell you what they are. It’s on auto pay and every month I see “Amazon Prime Payments” come through and I tell myself to go figure out what it is and cancel it and then…..the next month comes and I do the same thing. Over and over. 

If this sounds like you, then it’s time to take stock of what you are actually paying for.

First, make a list of what services are important to you. If you NEED Netflix, then keep it on your list. If Hulu and Sling have overlapping channels, maybe you don’t need both. 

Now that you know what you need, let’s compare what you actually have. 

Make A List of Current Services

Make a list of ALL of the streaming subscription services you have and what the monthly cost is. If you pay annually, like with Amazon Prime, divide that by 12 to get the monthly amount. Add them all up and see what your total is. 

The challenge here is finding all the services. Some of them may be charged to your Amazon card, which we know is very vague in description. Some may go directly to your checking account and others may be on a different credit card. 

Now look at that total and that’s how much money you spend every month on streaming subscription services. 

Have a hard time remembering all your subscriptions? Try Rocket Money. I used the free version. You can “choose custom amount” and select zero dollars for their free version. You won’t have access to all the features of a paid account, but you could choose the option for the 7 day free trial (just don’t forget to cancel!). 

I linked my banking accounts and was able to see some of the subscription services I have outside of Amazon and when they are due each month. 

Television/Movies:

Netflix-  $19.99

Amazon Prime-  $11.60  (139 annually)

Disney + –     $6.70 (80 annually)

Streaming 1-  $4.99 (PBS Kids)

Streaming 2-   $5.99 (Shudder)

Amazon kids+ –   $4.99 (saw I can switch to annual payment of $48/year) 

Music:

Pandora-  Free Version

Books:

Kindle Unlimited – 9.99

Gaming:

Prodigy- $6.25  (75 annually)

X-Box Game Pass- $5.00 ($60 annually)

Cloud Storage Fees:

Google One 19.99 annually ($1.67 monthly)

Total entertainment streaming subscriptions: $77.17 monthly cost. There’s no magic number to say if your total subscription streaming is “good”. As long as you can afford it and use it then it’s not a waste. 

Make Decisions

I love Amazon and I have no plans of getting rid of it anytime soon. The two-day shipping and videos are used quite frequently in my home. Amazon also makes it easy to subscribe to other streaming networks through Prime Video. But, back to my mission to cancel those pesky unused streaming subscriptions. 

I logged into my Amazon account and looked under Account & Lists → Memberships & Subscriptions and I could see all my subscriptions I have through Amazon as well as the monthly amount and due date. I even found that I could save money on one subscription by switching to annual payment instead of monthly. Click, click, save! 

If you find yourself looking to save money, here are three ways to save on streaming subscriptions if you really don’t want to cancel them. 

Share Account

Some streaming subscriptions allow shared accounts, some don’t. Just make sure you follow the rules for each provider. You could split the cost, or if the person is amazingly awesome, they may let you have a log in for free!!!

Pro: saves money. Con: need to know someone willing to share.

Ladder your streaming subscriptions

Instead of paying for one all year long, maybe you pay for it for a couple months, get all your binging of your shows done for the year, and then cancel while subscribing to a different provider for a couple months. 

Pro: saves money. Con: You may hear spoilers before you can watch a show.

Bundle subscriptions 

Some streaming subscribers, like Disney+ offer bundle deals giving you access to multiple platforms for a discounted price.

Pro: Saves money. Con: You may not use platforms in the bundle.

Start Saving

Saving money on subscriptions and streaming services requires some planning and research. By evaluating your needs, sharing accounts, looking for deals, as well as considering bundled packages and comparing to cable, you can  make informed decisions and save money on your entertainment expenses. It’s important to weigh the costs and benefits before making the switch to streaming services to be sure it’s right for you. And for your budget.

Thanks to Karina Moretz, Associate Advisor for this post. Pathfinder Planning LLC is a registered investment advisor in North and South Carolina. We serve young adults and working families by providing personal financial planning and asset management for a simple fee. www.pathfinderplanningllc.com

The post Tackle and Tame Your Tech Budget appeared first on Pathfinder Planning.

More good news – with some smart planning and a few money-saving tips, you can enjoy a memorable summer vacation without breaking the bank. Let’s explore some effective strategies to help you save money during your summer getaway.

Plan and Book Early

One of the best ways to save money on your summer vacation is to plan and book early. Many airlines, hotels, and travel agencies offer early bird discounts or special promotions for those who book well in advance. By securing your flights and accommodations early, you can often take advantage of lower prices and have a wider selection of options.

When you wait to book flights, you may find the costs are more expensive. This is because so many last minute bookings are business travelers who are not as price sensitive as families.

Be Flexible with Travel Dates

Flexibility with your travel dates can lead to significant savings. Consider traveling during the shoulder season, which is the period just before or after peak tourist season. Prices for flights and accommodations tend to be lower during these times, allowing you to enjoy the same destinations at a fraction of the cost. Additionally, midweek flights and departures on less popular days can also help you snag better deals.

Embrace Alternative Accommodation

While hotels are a popular choice for vacations, they can be quite expensive, especially during peak season. Explore alternative accommodation options like vacation rentals, hostels, or even camping. Websites and apps like Airbnb and VRBO provide a wide range of affordable alternatives, often with additional amenities like kitchen facilities, which can help you save on dining expenses.

One way that we have discovered to save money on vacations is by searching Airbnb or VRBO, and then searching for the property to see if it is listed on any other site, or directly through the rental managers website. You can also message the “host” on Airbnb or VRBO and try to negotiate rates. They will sometimes offer a discount, allow you to book directly and save the hundreds in extra fees and charges through those websites, or both.

Opt for Off-Beat Destinations

Instead of heading to the most popular and crowded tourist destinations, consider exploring off-beat or lesser-known locations. These places often offer unique experiences, lower costs, and a chance to immerse yourself in local culture. Do some research, seek recommendations, and discover hidden gems that can provide an unforgettable vacation while being kinder to your wallet. Smaller cities and quieter beaches may offer better deals.

Pack Smart

Packing smart can save you money on your summer vacation. Remember to pack essential items such as sunscreen, toiletries, and medications to avoid expensive purchases at your destination. If you’re traveling by air, pack light to avoid excess baggage fees. Additionally, consider bringing reusable water bottles and snacks for the journey to save on overpriced airport or convenience store purchases.

Remember the 80/20 rule – you don’t need as many clothes as you think. Remember that you an always do a load of laundry while on the road.

Explore Free and Low-Cost Activities

Research the free or low-cost activities available at your destination. Many cities offer free walking tours, public parks, museums with discounted entry fees on specific days, and community events. Take advantage of these options to enjoy local attractions without spending a fortune. You can also consider outdoor activities like hiking, swimming, or picnicking, which are often budget-friendly and allow you to soak in nature’s beauty.

National Parks are classic family getaways. If you are visiting several during the year, consider the US Park Pass. It’s a great deal for your whole family as daily entrance fees can add up. They offer passes for Seniors, Military, and those with permanent disabilities. You can get a free pass the year your child is in 4th Grade as well.

Go!

Planning a summer vacation doesn’t have to drain your bank account. By implementing these money-saving tips, you can make the most of your summer getaway while keeping your budget intact. Remember to plan ahead, be flexible, and explore alternative options to find the best deals. With a little bit of creativity and resourcefulness, you can enjoy a fantastic vacation filled with lifelong memories without the financial burden.

Thanks to Aaron Salmon, CFP®, Director of Investment Strategies for this post. Pathfinder Planning LLC is a registered investment advisor in North and South Carolina. We serve young adults and working families by providing personal financial planning and asset management for a simple fee. www.pathfinderplanningllc.com

The post Top Money-Saving Tips for Summer Vacation Planning appeared first on Pathfinder Planning.

The Purpose of Maintenance Funds

There are three main assets that require ongoing maintenance for most families:

1. Home
2. Vehicles
3. Health

Everything we own requires upkeep. None of our assets just go on and on without a few tune-ups along the way — our bodies and material possessions are no exception. People require doctor appointments and dental cleanings, cars need oil changes and tires, and houses need painting and repairs.

Taking care of your belongings helps extend their lifespan and minimizes the total amount of money you’ll spend in the long run. The challenge is, maintenance does add up and if you’re unprepared your wallet can take a big hit.

Should I Use Emergency Funds?

By definition, maintenance is not an emergency. You should expect maintenance. Emergencies are completely unexpected. The challenge for maintenance is that the timing of the expenses is unknown. Think of these as non-monthly expenses. You should not use your emergency fund to deal with these on-going repairs.

Going into credit card debt is another no-go. It can be way too expensive. However, ignoring maintenance altogether only means that eventually, you’ll be looking at a much higher bill when something breaks completely.

You know the saying — when it rains it pours. You can expect to need new tires at the same time a hailstorm dents your roof which is also exactly when your son breaks his finger. When this happens, life will feel like an emergency because things are piling up. But these are all repairs and ailments that can be planned for. When you plan for these non-monthly expenses, you will fee more confident that you can pay them so they don’t become emergencies.

Solution: Maintenance Fund

So what do you do if you want to keep your car running well, your household operating smoothly, and still manage your money well?  The answer is: a maintenance savings fund. Think of it as an emergency fund for your ‘things’ — making all of those repairs easier to afford.

We tend to focus and spend our money on what’s right in front of our face, rather than think long term. Upkeep requires longer term thinking, so we need a system for creating this fund.

The easiest way to start is to incorporate regular, automated savings into your budget. Whether you regularly save $10 or $100 a month, you will have money set aside specifically for these expected but untimely expenses.

Have you ever started a workout regimen after a few weeks, months, or even years (no judgement here…) of little-to-no physical activity? How did you feel? Tired, sore, and ready to give up, right? I’ve been there more times than I care to count!

Funny thing, though. After a few weeks of getting back into an exercise routine, you start to feel energized, the pain subsides, and you become motivated and excited to stay on track. That’s because you have moved from starting at square one to maintaining. The same thing happens when you begin saving. It becomes a natural part of your budget and easier over time.

How Much Should I Save?

By now you’re probably thinking, “okay, Mom…I got it! I NEED a maintenance fund. But how much should I save and keep in there?”

While there is no hard and fast rule, here are some numbers that I have found that work.

For your home, you first want to have the amount of your homeowner’s insurance deductible on hand. If your deductible is $500, start with that much. If it is $1000, begin there. After that, save approximately 10 percent of your monthly mortgage payment into a high-yield savings account. For example, if your mortgage payment is $1,000, aim to put somewhere around $100 per month into your maintenance fund. If you are still working on your budget and don’t quite have that much, that’s OK. Some is better than none.

For your cars and vehicles, similar rules apply. Keep your deductible amount in the bank and save about 10% of your monthly payment amount. If you are not making car payments, then consider saving what would be a car payment. By saving $300 0r $500 a month, you will have funds available for major repairs or to purchase a new car in the future. Think of it as paying yourself instead of having to take a loan.

Medical expenses can be tricky, but a great place to begin is by having your maximum out of pocket expense amount on hand. Check your medical insurance policy. If your maximum out of pocket expense is $5000, that is your starting point. You can hold these funds in a tax-advantaged Health Savings Account, or in a regular savings account at your bank.

Chances are you won’t need to dip into these fund often, but the idea is to grow the balance over time and continue replacing funds as they are used. When something breaks, needs to be repaired, or even replaced, the money will be readily available and won’t affect the rest of your budget.

How Maintenance Funds Help Preserve Your Assets

This isn’t just some theoretical advice that I’m trying to sell you on because as a financial advisor I’m supposed to. No, we actually live this!

Here are some examples of how we have used our Maintenance funds. We purchased a NEW 2000 Ford Explorer back in, well, 1999. It was the first new car either of us ever bought. Over nearly two decades, we put money into maintaining this car, and we extended its life with us. I have to say, we loved this car, however, with over 234K miles, and doors that didn’t quite work the way they should, we weren’t sure that we could fix the power issue it was having. We finally had to let it go.

So, our $30K car lasted 17 years for an annual cost of $1764 per year, plus maintenance.

We needed new windows at the same time my son was impaled with a stake through his nose. While I’m not excited about the bills that I know are coming, I also am not afraid of them since we have funds set aside for incidents like these. (Maybe if you have boys, you will want to consider a larger fund.)

The Big Takeaway

Americans tend to have small savings accounts. A report from the Federal Reserve reveals that 70% of Americans would use cash, savings, or credit cards to cover an unexpected $400 expense. 35% would have difficulty covering this expense.

Here’s your big takeaway: if you have an expensive item, be sure to budget for its upkeep.

At a minimum, a maintenance fund can help you have enough money on hand to pay for the annual upkeep your life requires. Not to mention, it also keeps you out of debt, provides peace of mind, and creates a level of confidence that you won’t be caught short handed.

So tell us: do you have a maintenance fund? If not, what’s getting in your way?

Pamela J. Horack, CFP® of Pathfinder Planning LLC provides personal financial planning advice and asset management for a simple fee to young adults and working families in North and South Carolina through group classes, one-on-one planning, and ongoing advice.

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