Well, this post answers both those questions:  I got to be a guest on the wonderful show “Where Are You Going In That?” which is hosted by talented style experts, Bridgette Raes and Amanda Jormov. Starting at 23:55  we spoke about how to budget for fashion, but, I definitely recommend listening to the whole thing as the whole conversation has some gems in it.

Click here to check it out!

The holidays now feel like a distant memory and you are experiencing the hangover via your bulging credit card bill. Not sure what to do besides dig deeper under your blanket?  It’s not that bad, and, here are three easy ways to get your new year to a fresh start.

Ramp Up the ROTH

I’m a huge fan of the ROTH IRA for so many reasons.   Even if you have a 401(k) or are self-employed with a SEP IRA, that’s ok.  You can still contribute to a ROTH IRA as long as you earn less than $120,000 as a single person or $179,000 as a married couple.  You don’t get any tax benefits now but the withdrawals are TAX-FREE after age 59 ½.  If you save the $5,000 per year for the next 30 years, you could build a nest egg of over $415,000 – that is tax-free upon withdrawal!  Plus there is lots of flexibility if you need to withdraw the money for a first-time home purchase or other reasons.  My favorite places to open a ROTH IRA are Fidelity and Vanguard.  Vanguard has a $3,000 minimum to open an account but then you can add as little as $50 a month on an ongoing basis.  Fidelity has mutual funds with lower minimums.  If you don’t have enough for the minimum, T. Rowe Price waives the minimum as long as you contribute at least $75 a month automatically.  No matter where you open it, make automatic contributions every month.  You won’t miss it.  You can contribute as much as $5,000 per year (or $413 per month)

Save for Summer Vacation

It’s hard to imagine the warm weather now but when summertime rolls around your mind wanders to that Caribbean vacation that is now 50% reduced.  Or the summer share in the Hamptons.  Or perhaps you want to visit your nieces and nephews in San Francisco.  But… you haven’t saved for it and your savings account has more dust than dollars in it.  Now is the time to create a separate savings account – apart from the emergency fund that you are contributing to every month, right?!  My favorite online high interest savings account has been INGDIRECT.com but American Express also offers a competitive rate of almost 1%.  I’ve created two savings accounts: one for emergencies and one for “Save to Spend” for items like vacations and other purchases that prevent us from getting ahead.

Get Digital with Your Money.

These days I don’t go a day with using a personal finance app or website. I use different one for many different reasons. Some of my favorite apps:

Mint.com:  To view my spending for the last month and make sure I’m spending under my total amount budgeted.  I also love the snapshot feature that lets my view all my accounts, investments, debts and loans in one place.

Pennies: I want to keep an eye going forward on how much I’m spending weekly.  The tracking feature lets me set a weekly or monthly spending amount and easily input my daily expenses.  I input them while I’m standing in line getting my morning coffee. This app doesn’t need my personal information, which can ease many of your privacy information fears.

Morningstar.com:  I’ve got my mutual funds bookmarked online and am able to easily see how they are performing especially compared to leading indices.  Even though the market is volatile, I’m able to make sure my mutual funds are doing better than the market and I’m still in good shape.  The app is easy to follow as well.

Under normal circumstances—i.e. five years ago—owning bonds or bond funds in a long-term portfolio was supposed to protect it from falling too much.

But, what if bonds fall as well? There is a valid concern that bonds will not hold their performance in the next few years.*

One way to preserve the value of your 401k is to hold stable value funds. It’s a good option for women in particular during bumpy times, given that we live longer and need to preserve our assets.

A stable value fund is a mutual fund that preserves capital by investing in high quality bonds—but is protected against interest rate volatility by contracts from insurance companies.

Translation: It’s VERY unlikely that a stable value fund will lose money.

The interest rate is lower than your typical bond fund, but higher than a money market. They are found in approximately half of all 401k and 529 plans. (Unfortunately, it is very difficult to buy a stable value fund outside of a 401k plan.)

What You Should Do…. If you hold 30% of your 401k in bonds, consider switching to 15% bonds and 15% stable value.

What You Should NOT Do…. Move all of your 401(k) holdings into a stable value fund. Currently these funds are earning approximately 2-3%, which is definitely not enough to sustain future growth in your portfolio when inflation kicks in.

Relax. Do you worry about how your retirement account is doing? Do you look?

* Inflation is at the lowest in over 50 years, and interest rates are not likely to increase until 2013. Once inflation starts to increase, the lower interest rate your bonds earn may not keep up with inflation, thereby causing negative returns in your portfolio overall.

Join the conversation on DailyWorth!

The single worst thing the real estate boom did to average Americans was creating a fantasy that you could count on your home equity as part of your retirement plan.

But national average home prices have fallen almost 40% since 2008—putting a huge dent in many people’s nest eggs (to say the least).

Yet from what I see as a financial planner, the Home Equity = Nest Egg formula won’t go away.

But it must. No matter how much equity you have now, or how much you think your home could be worth when the market rebounds (whether in five, 10 or 20 years), it’s too risky to include your home as part of your financial plan.

• If you’ve refinanced multiple times over the years, you may not have much equity to tap by age 65.
• Even if you’re prudent and pay off your mortgage by retirement age, you may not be able to sell your house.
• You may be able to sell your house, but the cash will likely get eaten up by medical bills and long-term care expenses.

Most of my clients still have a mortgage, at ALL ages. Few and far between are mortgage free—including those in their 60s.

I had a finance professor who once said that buying a home and art were similar. Never look at them as investments; buy what you can afford and what you love. You’ll likely be stuck with both for a long time.

Raise the roof. Were you hoping a real estate rebound might rescue your retirement?

Join the conversation on DailyWorth!

Given the dicey real estate market, you may need to make repairs you’d hoped to avoid by selling—or you may want to do some upgrades to attract buyers.

It’s a tough choice. Even if you can afford it, borrowing equity means more debt. But you could stand to gain in the end. Here’s how to think it through:

• Remember that you need to have at least 20% equity in your home to qualify for a line of credit.
• HELOC rates are variable—which means that they’ll go up when interest rates rise. So what seems like cheap credit now, may not be in two years.
• Renovations don’t always recoup their value. The average cost-to-value ratio for 2011 is only 60%. So if you borrow $30,000 for a kitchen reno, you could get about $18,000 when you sell your house. A $12,000 loss!
• Retirement is a better investment. A $30,000 HELOC at 4.3% would give you a monthly payment of at least $308. If you were to invest that $308 in a ROTH IRA earning 5% annually (yes, that’s possible today, see PTTDX or PRPFX), you would have almost $50,000 in 10 years, versus negative $30,000.

When you add it all up, what’s wrong with simply going old school and—wait for it!—saving for repairs and upgrades? If you stashed that $308 a month for the next two years in 1% savings account, you would have nearly $7,500. And no debt.

You owe it to yourself. How much home equity debt do you have now?

Join the conversation on DailyWorth!

This article was originally written by Galia Gichon on DAILY MUSE.

I’ve never been a fan of debit cards. You might wonder why, when they seem so useful—quick access to your money, immediate purchase power, and no need to carry around a wad of cash. Plus, they’re better than credit cards, right?

Not so fast. There are actually some big downsides to swiping that bank card.  For five reasons to be wary of debit cards, plus some tips for being smart when you use them.

You (Subconsciously) Spend More

Do you keep track of your purchases? So does Sharon, one of my clients. She follows the rules for financial success—logs her spending, doesn’t carry a credit card balance, owns her home—but during her recent financial check-up, she was frustrated that she hadn’t saved as much as we had planned. The culprit? Her debit card. While she thought she was being “good” by not using her credit card, all her little debit purchases were adding up. Studies show that this is a common pitfall: If we have actual cash in hand, we’re apt to think twice before forking it over. But when we’re paying with plastic, we’re much more careless about our spending.

Read the full article on DailyMuse.

This article was originally written by Galia Gichon on DAILY MUSE.

This is the second article in our two-part series on dealing with finances with your significant other. For the first installment, check out “Can Love and Money Get Along?”

You’re a hoarder, he’s a spender. You stash purchases in the back of your closet, he “forgot” to tell you about his three-day golf weekend—and its hefty price tag—before booking it. But even once you’ve recognized why money is a source of contention in your relationship, it’s not always an easy problem to solve.

I’ve counseled couples languishing in their same old money habits for years, and here’s what I’ve learned: communication is crucial—not just about dollars and cents, but about your feelings, too. “It is important not to confuse having transactional conversations about money (e.g., what to buy and for how much) with the deeper conversations thatprovide context as to why you feel, think and believe as you do. Financial intimacy is about navigating emotions that will surface when talking about money and negotiating the information you discover,” explains Jacquette M. Timmons, founder of Sterling Investment Management and author of Financial Intimacy: How to Create a Healthy Relationship with Your Money and Your Mate.

Need helping getting those conversations going without starting a fight? Try these tips to get both of you open up about money in a calm and productive way.

Read the FULL article here!