katydavissong's blog

Marin Mommies presents another great article by Marin mom and financial planner Katy Song, CFP®.

The Year of the Dragon is coming to an end. Last year I wrote that it was to be a year of excitement, unpredictability and intensity. It was supposed to be a great year for innovative businesses and ideas. However, the Dragon could also cause you to spend more money than you should. Some astrologers even warned that HP would not do well in 2012; I think a 40% drop in stock price indicates that they were right! How did you do in the Year of the Dragon?

The Snake is considered to be lucky and means that your family will not starve. Those born in the sign of the Snake are supposed to be wise, intuitive, cunning and modest. So, what will the Year of the Snake and 2013 mean for your finances?

Here is some advice based on Chinese interpretations of the year to come:

1. Pay attention to detail. The Snake is able to read very complicated situations quickly and in a controlled manner, which can be good for business. When signing any kind of documents, pay very close attention to the details. The Snake is cunning, and you can use this to your advantage by looking for loop holes that sway terms in your favor.
2. Be focused and disciplined to accomplish your goals. A new-found ambition to greatness will inspire you to be all you can be and provide you with the follow through to actually achieve your goals. Steady progress is what the Snake is all about. The 2013 year of the Snake also supports added responsibility. (New baby? Promotion at work?)
3. Watch your spending. This year you need to watch spending even more diligently since Snakes are inclined to spend money more quickly than earned. The Snake is materialistic and likes the best of everything. The Snake sees it, likes it and buys it. This can create tensions in personal relationships.
4. Create a safe place from which to work. The Snake likes protection and needs to feel safe and secure to use its special analytical skills. This is the year to make headway in slow and methodical ways. As you focus, you will definitely accomplish things this year.

Marin Mommies presents another great article by Marin mom and financial planner Katy Song, CFP®.

In the last 15 years, positive psychology has tried to tackle the question of “can money buy happiness” by studying people’s happiness levels along with changes in income levels. Also known as the “hedonic treadmill” theory, studies show that once your basic needs are met (clothing, shelter, food) that rich people are not happier than poor people.

As a person makes more money, expectations and desires also increase, which results in no permanent gain in happiness. While a change in fortune may temporarily make you happier, in the long run you are likely to revert back to your normal level of happiness.

However, a big part of happiness is linked to your intentions. Psychologists say that by setting and achieving your goals, you have higher life satisfaction and more sustained happiness than before.

As a financial planner helping my clients navigate their financial future, the hedonic treadmill theory raises two important questions. First, if you have money above your basic living expenses, what should you do with it? And second, how can you make yourself happier? Here are three steps to help answer these questions:

The back-to-school season, be it pre-school or kindergarten, marks the end of summer and new beginnings. During this time of change it is easy to put managing your own lives on the back burner so that you can focus on helping your children transition smoothly. Before you know it, it is the holidays and you put it off even longer. The end result is that another year has gone by and you do not feel any better off than you did at the end of last year.

Do something different this year! Follow the three simple steps below from September through December and make the rest of this year count.

Step 1: Knowledge is Power. Just like when your children start school, the teachers want to know what they are capable of doing. Can they sit still for circle time? Can they follow directions? You need to know what you are capable of and where your money is at this point in time.

There are many free online personal finance resources to help you know where you are financially. For example, Mint.com, Personal Capital and Wikinvest are a few. These tools are very robust and can seem overwhelming. Tip: Decide what “your” goal is for using the online service. Is it tracking your expenses? Or is it getting a holistic view of several portfolios of investments? If it is for tracking your expenses, focus on that only (for now) until you have a good sense of where your money is going.

Marin Mommies presents another great guest article by Marin mom and financial planner Katy Song, CFP®.

Is the freedom that money buys worth the sacrifices you make to reach this freedom?

“What is important in life is life, and not the result of life.”—Johann Wolfgang von Goethe

Setting financial goals and creating your financial plan is all about determining your destination. And if life is about the journey, not the destination, then sacrificing today for tomorrow is a big contradiction. So, how can you live the journey you want and still reach your financial goals?

• Step 1: Clarify your family’s goals first (financial and non-financial). For example: have six months’ worth of expenses in cash at all time as an Emergency Fund, travel as a family twice per year, be present and grow as a person each day, contribute to society, and retire by age 60.

Marin Mommies presents another great guest article by Marin mom and financial planner Katy Song, CFP®.

Once your child is born, there is a strong sense of responsibility that kicks in and most parents want to immediately start saving for college. By far the most popular college savings vehicle is the 529 Plan, which was created by the IRS in 1996. There are over 70 plans from which to choose and the growth is tax-free! It sounds great, right? Not quite. Let’s look at each of the “advantages” of using a 529 Plan to save for college and why you should NOT open one (or at least rely solely on it).

Marin Mommies presents another great guest article by Marin mom and financial planner Katy Song, CFP®.

Market uncertainty, record low interest rates, lack of housing inventory, signs of economic recovery, increasing rents… When you put all of these together, what do you get? A lot of questions about whether this is the “perfect” time to buy or keep renting.

I speak with a lot of people looking for houses and there seems to be a little frenzy developing for those looking to buy a 3+ bedroom home for less than $1million. If you are in this position or are contemplating getting in the market, first, take a deep breath and know one thing for sure: You will likely not time the market perfectly. Second, do not get caught up in the frenzy. Know exactly what is right for your financial situation and family (price, down payment size, mortgage terms, location, etc.). This is going to be one of your biggest investment decisions and you should not compromise on too many items.

Marin is a special market. The supply of housing is limited and the demand is high given its proximity to San Francisco, good public schools and family environment. The excess of demand over supply means that values tend to remain high and long-term growth prospects for this investment are strong. So, is housing a safe investment again?

Marin Mommies presents another great article by Marin mom and financial planner Katy Song, CFP®.

For most of my clients, 2011 proved to be a year of getting on more solid ground (paying down debts, getting out of underwater homes, building up an emergency fund, and even taking a vacation). This was predicted for the Year of the Rabbit (2011), in which you were able to rest and have a little peace. Well, I hope you took the time to get prepared for the Year of the Dragon (2012)!

The Dragon is said to create excitement, unpredictability and intensity. This can bring out some wonderful behaviors like enthusiasm, but throwing caution to the wind can lead to unnecessary risks. Personally, I am ready for some excitement but want to steer clear of drama. So, what does this Year of the Water Dragon mean for your financial future over the next year?  Here is some advice based on Chinese interpretations of the year to come:

Marin Mommies presents another guest article by Marin mom and financial planner Katy Song, CFP®.

As a financial planner, I do a lot of “planning” for my clients all year long. Over the years I have learned what works and doesn’t work for making meaningful changes that stick. For example, cutting things out cold turkey doesn’t work. Long-lasting meaningful change needs to be progressive, which means you first need to learn to crawl, then walk, then run.

Whether your resolutions are financial or not, to ensure success in keeping these resolutions you need to plan ahead (before January 1st is optimal) and create steps that progress so that you build on your success over time to accomplish a larger goal. It is positive momentum from these successes that is going to help you stick with your resolutions throughout the year.

Here are some easy steps to get your progressive resolution plan in place:

Marin Mommies is presents another great guest article by Marin mom and financial planner Katy Song, CFP®.

When you think of how you want to spend your hard earned money, rarely do you think “I want to overpay for car insurance and spend $70 to fill up my tank!” Car related expenses are a necessity for most families, but there are easy ways to reduce these costs and make sure you are not overspending.

The “rule of thumb” for transportation related expenses is that they should not account for more than 10% of your gross income. Depending on your salary, this could be a really big number! For example, if you make $150,000 per year the “rule of thumb” says that you can spend $1,250 per month on your cars. This could easily cover gas ($350), insurance ($115), commuting ($50) and a VERY nice car payment. While this rule might make sense in other parts of the U.S., I believe it overstates what a family in the Bay Area should spend given our significantly higher home related expenses.