Trick or Treat: 3 Crazy Ways Your Brain Tricks You Into Not Saving Money

Pumpkins on grey backgroundDid you know your brain may be to blame for preventing you from reaching your financial goals? It’s true. Several recent studies conducted by Prudential suggest that we should train our brains to think differently about money because our brains are tricking us every day. Here’s how:

  1. What would happen if you asked a stranger to donate to your retirement fund? They’d probably laugh at you. But, research suggests when we think about our older selves in retirement, we see ourselves as strangers and have a hard time saving for something we can’t easily envision. For example, when we think about ourselves now, our medial prefrontal cortex reacts strongly, yet when we think about a stranger, the same area has a lesser reaction. Oddly enough, this section of our brain has the same insignificant reaction when we think about ourselves in the future. To make saving easier, we need to find ways to connect with the person we want to become so it doesn’t feel like we’re giving money to a person we don’t know.
  2. Have you ever lost a $20 bill? It hurt, didn’t it? Did you know that our brains recognize physical pain and losing money in the same way? Furthermore, the same area of our brain that reacts when you lose money is responsible for reactions related to saving money. It’s almost as if we feel like we’re losing money when we save. Ouch. That hurts. But consider this – what if we woke up one day and checked our bank account to find we had a lot more money than we originally saved? How would this make you feel? Personally, I’d be doing a happy dance! This means we need to start focusing harder on the gratifying feelings that savings can lead to instead of the pain we feel when saving today.
  3. You work extremely hard. So, why are you behind in reaching your financial goals? The area of your brain that helps you make responsible decisions, your dorsolateral prefrontal cortex, is focused on overriding the parts of your brain that encourage you to make impulsive decisions. Because your responsible side gets tired from all the decisions it makes every day, the impulsive side often overrides it. This leads to procrastination. Big surprise, huh? You’re tired! The last thing you want to do after coming home from a long day is to calculate your retirement gap or figure out the best way to invest your money. So, what can you do to prevent procrastination? Get an accountability partner!

One of the most important ways to help bridge the gap between where you are today and where you want to be is to find someone who can understand your goals, help simplify the decisions you need to make by offering you easy solutions, and keep you on track when life gets in the way. I’d love to help you get from here to there. Feel free to reach out to me if you’re ready to get focused.

*Originally published in the October issue of Hills & Castles magazine. 

3 Urgent Reasons Mom Should Get More Life Insurance

Family umbrella protectionYou wouldn’t believe the number of times I’ve heard families say, “mom doesn’t need as much life insurance as dad because she is a stay-at-home mom” or because “she’s not the primary breadwinner.” In my thirteen years as a financial advisor, I’ve seen too many instances where families are financially devastated by this misunderstood notion. The fact is that many times you can insure mom for a minimal cost, while protecting your family from financial hardship. Here’s why you should consider life insurance for mom right away:

1. Mom is worth more than you think! According to a 2016 “Mom Salary” survey by, today’s stay-at-home mom is worth $143,102 per year when you consider her hours worked and the amount of comparable compensation received by people doing similar jobs. Not only does mom fill the role of janitor, taxi driver, accountant, academic advisor, nutritionist, and at least 26 other official job titles, but she works about 92 hours per week.

You can’t underestimate the amount it would take to replace mom if she were no longer around. As terrible as that is to think about, indicates the average father in Alabama would spend $15.85 per hour to hire someone to help replace her. That’s nearly $33,000 per year which only factors in childcare, not household chores or anything else mom does!  Depending on the age of your children, the total price tag for childcare could add up to almost $800,000. That’s reason enough to make sure she’s covered.

2. Life insurance replaces income. Women who work outside the home provide valuable financial support for their families. A loss of that income could certainly impact surviving family members’ ability to maintain their current standard of living or her spouse’s ability to retire if mom’s income can no longer be saved for the future.

3. Who wants to leave debt to their loved ones? Most families have a mortgage, two car payments, and credit card debt. Putting the pieces of life back together after the death of a mom is hard enough without financial woes. Life insurance can be a cost-effective way of making sure families aren’t burdened with debt and are setup for future financial success.

It’s definitely not a fun topic to think about, but it’s necessary. I’d like to help you start the conversation and determine how much insurance you need. Feel free to reach out to me if you need an independent life or long-term care insurance specialist to help you protect your family.

Originally published in the September 2017 issue of Hills & Castles magazine.

What Does the Fed’s Rate Hike Mean for You?

Caution - Higher Interest Rates AheadEarlier this month, the Federal Reserve raised interest rates again by a quarter of a percent. This is the third consecutive quarterly increase and many economists expect another rate hike this year.

So, what does this mean for you? Here are some steps you can take to protect yourself from rising rates:

Lock in Rates While They Are Still Low

  • Do you have an adjustable-rate mortgage? If so, consider refinancing to a fixed-rate while interest rates are still close to historic lows.

Watch Your Credit Cards

  • Credit card companies are likely to raise rates along with the Fed since most credit cards today have a variable rate, which means there’s a direct connection to the Fed’s benchmark rate. This is likely to to take place over one to two billing cycles.
  • The Fed’s quarter-percentage-point rate hike means you’ll pay an extra $2.50 a year for every $1,000 of debt. On a larger scale, for the 157 million Americans who carry a balance on their credit cards, this will mean nearly 1.6 billion in extra finance charges! Consider a zero interest balance transfer offer or better yet, take aggressive steps to pay down your credit card debt.

Student and Auto Loans May Have Higher Rates

  • If you or a member of your family has student loans, pay close attention to the rates on variable private loans.
  • Thinking of purchasing a new or used car? Shop around for the best rates as many auto lenders will raise rates as well.

Pay with Cash

  • One item not affected by the Fed’s rate hike? Cash. Consider making more purchases with cash and avoid the rate hike altogether!

If you have other questions about what the Fed’s rate hike may mean for you, please reach out to me. I would love to help!

(Source: CNBC, “Fed Hike Will Cost Consumers 1.6 Billion in Credit Card Interest,” 03/15/17)

Life Insurance is for Those Left Behind

Do you have enough life insurance? It breaks my heart to work with families who have lost a loved one and their financial lives are turned upside down. Life insurance isn’t for you – it’s for those left behind.

Many people are underinsured and underprotected. Contact me today for a free life insurance review and let’s make sure your loved ones will be okay if you are not around.

Back by Popular Demand!

Mitigate risk umbrella adWhat mood will the market be in for the remainder of 2017? What impact will rising interest rates have on your investments? Why are your investments not performing with the stock market? I would like to invite you to join me for another Wisdom & Cents Ladies’ Event on July 13 at the Holiday Inn and Suites in Alabaster where we will discuss these questions and what else you can expect from the stock market and economy for the remainder of 2017. This free event is for investors of all levels and is a great opportunity to get educated on a topic that can help you take charge of your investments and financial future.

For more details and to register, click here. Space is limited and registration will fill up fast, so register soon! I hope to see you there!