1.)    You bought a house especially if you are a first-time home buyer.
2.)    You have a child in college.
3.)    You bought a new car.
4.)    You were out of work and collected unemployment, looked for a job or paid full payments of health insurance.
5.)    You donated to help those in Haiti – and other places.
6.)    You lost money in the stock market.
7.)    You made energy efficient renovations.
8.)    You didn’t itemize but own your home or another for investment purposes.
9.)    You moved for a new job.

Don’t forget about deductions for your financial advisor or even a safe deposit box.  I’m not an accountant and recommend you have one that you have an open relationship with.  Now, when you do get that refund money, be sure to put some of it away and don’t spend it all on your next vacation.      

• BrokerCheck (www.finra.org/investors). It isn’t perfect and may exclude some essential information (such as pending judgments or customer complaints) but it does have lawsuits and disciplinary history.

• Ask for your advisor’s Form ADV, parts I and II.

• What are your commissions and how do you get paid? It can be flat-fee based on percentage of assets or commission based or incentives from mutual funds.

• Can you explain how to read my statements?

• Will I be able to speak with someone regularly? You want to make sure you are not getting less preferential treatment than other clients who may have more money.

• This new fund you are suggesting I invest in, how long have you been selling it? You want them to answer more than 3 weeks and at least one year.

• Is there a less expensive way to pay for your help?

• Are there any good funds you are not allowed to sell me?

Valentine’s Day just passed. Let’s face it – it definitely causes angst for most of us, single or married. However, that is a separate topic we won’t explore right now!

Recently I read an article about affordable activities that resonated with me. Not only was I already doing some of them but they weren’t too “budgety” (if you know what I mean). I got some from an article on Wisebread.com, called “Classy Dating on a Budget” by Myscha Theriault. I added a few of my own too.

1) Annual Passes to Local  Museums or Zoos. I’ve been doing this for years. For example: MOMA in NYC. Admission for one is $20. Annual membership is $75 with $5 guest fee. It pays for itself in just 3 visits for a world famous museum!

2) Live Theater. I’m not talking about Broadway or even “Mamma Mia” coming through your town. There are plenty of excellent theatre off-off-Broadway or local theatre groups. I recently discovered Barge Music in Brooklyn – world class musicians for $35 a person. I found it in Time Out.

3) Wine Tasting. Years ago my husband took me to Napa to romance me. We fell in love with exploring vineyards. Napa is a bit far but there are vineyards everywhere: Long Island, Michigan and more. You may not even have to spend a cent.

4) Walking With a Purpose. I liked this one. Usually we just go for a walk but putting a purpose such as checking out a new art gallery or waterfall (if you live near one) sounded realistic.

5) Making a Music CD, Creating an iTunes Playlist or Filling an iPod. Remember the mix tapes from the 80’s? I would LOVE this gift!

Do you have an affordable date idea you want to share?

You know how much you are earning.  You know how much you owe.  You know how much you have in the bank.  But that is where your “know” ends.  If you don’t know any of these numbers, take a deep breath and call me 212.734.0433!  Many of my clients are in a similar situation.  If you do know; good for you and keep reading.

Remember back in school when grades came out, you panicked but then instantly knew how you performed. Wouldn’t it be great if there were a grade for our personal finances?  Well, there is – sort of….  You can look at your FICO credit score and gauge what the banks and lenders think of you.  While that is a super helpful number, it isn’t very personal.

If you are ready for a more thorough financial checkup, consider figuring out your money ratios.  Here are 2 key money ratios to tackle: DEBT and SAVINGS RATIOS.  How did you perform?  If you aren’t sure what your number is or you are discouraged by your “grade”, take a deep breath and get your support – either through a friend or by calling me.  Don’t not do anything.  It won’t go away.

Debt Ratio

* What is your gross monthly income?

* What are your fixed payments on a monthly basis? Include the following: mortgage and maintenance or rent, car, other loan payments such as home equity loan, personal loan, student loan payments, alimony or child support and credit card payment (If you are paying off a high balance, put more than the minimum payment – enough to make a dent in your debt repayment).

For example:

Gross monthly income:  $8,333

Fixed payments:  $3,177

(mortgage $2,000 + car payment $300 + cre.dit cards $600 + student loan $277)

To calculate your Debt Ratio, divide your fixed monthly payments by your gross monthly income.

For example:

$3,177 / $8,333= 38%

In this example, the Debt ratio is 38%.  Ideally, you would like to keep your DEBT RATIO less than 20% but lenders like to see it below 30%.

Savings Ratio

Now that we tackled your debts and loans, let’s move on to your savings.  To figure out your savings ratio, answer the following questions:

* What is the amount you saved last year in retirement plans, short-term savings, taxable investment accounts? Include any dollars your employer matched.

* What was your gross annual income?

For example:

401k annual savings: $6,000

Employer match savings: $1,000

Short-term savings: $3,000

Total savings: $10,000

Gross annual income:  $100,000

To calculate your Savings Ratio, divide your annual savings by your annual income.

For example:

$10,000 / $100,000 = 10%

In this example, the Savings Ratio is 10%.  Ideally, you would like it to be 19%.  This number is from a report in “Personal Financial Ratios: An Elegant Road Map to Financial Health and Retirement” by Charles J. Farrell, J.D., LL.M.  His research shows that most individuals that want to retire at a certain age and income, need to save 19% of their annual pay.  This is a rough estimate but the numbers made sense.

Most of us are not saving close to that number.  But it is a huge step in the right direction if you find out your ratios and motivate to raise them.  Plug your numbers in and let me know your “grades”.

To read more about how I helped them, read the article HERE.

Online banking is a case in point. The benefit of online banking is that if the charge shows up on your bank statement, you can file a claim RIGHT AWAY and start dealing with the issue immediately.

A client saw this amount from time to time on her bank statement when she opened her mail and knew it was a wrongful amount. She realized she needed to deal with it right away but two kids and working full-time got in the way. One of her homework assignments in working with me was to start paying her bills online and create a weekly money day to tackle those financial issues that keep us up at night. As soon as she logged online to her bank, she sent an electronic notice to her bank about the wrongful charge and it was taken off immediately. Since there were 3 amounts like this, she saved over $1,200! Nice chuck of savings right?

Smart women don’t get caught “wasting” $24,000 – right? Well, looking at another client’s SEP IRA recently, I saw $24,000 languishing in a money market earning 0.20%. Since she is in her 30’s and can’t touch that money until at least age 59 ½, that money should NOT be in a money market. With potential inflation at 3% a year, she is actually “losing” money every year by not investing it. Even if she is nervous about the stock market, this money could be in a no-load, low-expense ratio bond fund that earns more than 3%. Not sure where to find those mutual funds? Give us a call or check out Vanguard.com. Don’t let this happen to you. Be smart and take a peek inside your IRA or 401k. The majorities of my clients keep more money than they should in cash/money market in their retirement accounts and have many years before they can touch them. Go ahead, protest and then open your statement to prove to me how “smart” you are!

1)   You are thankful for being a smart spender and watching your expenses. Yes – there are many of you out there!

2)   You are thankful for earning a fabulous income.  I have a wonderful client that can corral a 6-figure + income every year – she just needs some help in the spending part.

3)   You are thankful that you own your home and you love living there.

4)   You are thankful you have an IRA or 401k.  You may not understand everything that is in it but you own it and contribute to it regularly.

5)   You are thankful you have an emergency savings account. It may not be the 3 or 6 months of expenses you should have but it is there and growing steadily.

6)   You are thankful that you do not have any cre.dit car.d de.bt.

7)   You are thankful that you pay your bills on time and do not pay any late fees.

  You are thankful that you want to take the time to learn about your investments and are seeking out ways to do so.

9)   You are thankful that you are making your money a priority by reading this newsletter, being a client of Down-to-Earth Finance, attending one of our seminars or owning “My Money Matters” kit.

10) You are thankful that you are going to take your money by the reins before the end of 2009 and not overspend this holiday season!

Please share with me your thanks if it wasn’t on this list.  Before I share my money thanks, I am incredibly thankful that I have a wonderful husband and two beautiful healthy fun children.  I am super thankful that I have a business that I am passionate about and get to meet very interesting and fulfilling clients. I am thankful that I am on top of my investments, keep my investing fees super low and did not lose that much money in 2008 because I was properly diversified.

Have a wonderful Thanksgiving!  

Warmly,

Galia