The Best of Jean Chatzky...I The Best of Jean Chatzky n the midst of the Great Recession, I...

The Best of Jean

Chatzky

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12 of the Financial Expert’s Best Columns for AARP,

Plus a Bonus Column on Financial Resilience for Uncertain Times

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1. Introduction With Bonus Column: How to Build Your Financial Resilience Uncertain times doesn’t have to mean an uncertain future

2. Blindsided by Retirement What to do if you find yourself unexpectedly out of work

3. Budget Busters in Retirement Get ready for these 5 threats to your financial security

4. It Takes More Than Love When You Marry Later in Life What to do before you say ‘I do’

5. Money Tips for Re-Newlyweds Why Jean and her husband keep their finances separate —and why you might, too

6. Read This Before You Cosign a Loan If you absolutely have to do it, these are a few ways to lower your risk

7. Hello Mother, Hello Father Figuring out finances first makes for a happy multigenerational household

8. Who Will Protect Her Finances? With no spouse and no children, she’s looking elsewhere for backup

9. Planning for the Worst Why disability insurance may be a must-have for you

10. Teach the Children Well Money lessons for the grandkids

11. Spend on Values to Feel Good For a win-win strategy, align your money with your beliefs

12. Going Cold Turkey What I learned from swearing off those tempting store sales

13. Tidy Up Your Files An organized financial life is a gift to yourself and your loved ones

The Best of Jean Chatzky


In the midst of the Great Recession, I researched and wrote a book called The Difference. It was my attempt to figure out why some people manage difficult financial periods better than others, so that I could

help pass along those skills and personal-ity traits that would enable more of us to come out the other side in one piece. As we struggle through the COVID-19 crisis, I keep referring back to this research, and one of the traits in particular: resilience. The definition that I prefer is that it’s the ability to recover from or adjust easily to misfortune or change. People who have resilience can overcome — on the job, in their personal lives, with their finances. They don’t deny the bad things that hap-pen in all of our lives; they just continue to move forward, rather than get stuck in some pool of negativity.

The good news about resilience is that you don’t have to be born with it. We are

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all born with about 50 percent of the resil-ience that we’re ever going to get, but the other 50 percent is up to us. We can learn it by focusing on controlling the things we can control — and letting go of the others. And by taking action.

Being resilient will be an asset, wheth-er you’ve been blindsided by a retirement you didn’t expect, are for the first time navigating a household that includes your older parents or adult kids, or are trying to keep a smaller-than-usu-al budget in check. Here are the steps to take to become more resilient, right now.

Step 1: Take Stock We can’t move forward until we un-derstand not only what this crisis has done to our finances but what it will continue to do. This means knowing, from the perspective of your house-hold, how much is coming in and how

Jean Chatzky is an award- winning financial editor. In 2018 she launched Her-Money Media and HerMoney.com to provide women with information about money they can actually trust. The best-selling author of 11 books and an in-de-mand motivational speaker, Jean is a fierce advocate for financial literacy.

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much is going out. Where is it going? And how has that changed from before the cri-sis? There’s an old saying: What gets mea-sured, gets managed. This crisis has thrust most of us into management mode, but to do it successfully we need accurate data on where the money is actually going.

Step 2: AdjustThe information that you gathered in Step 1 gives you a list of to-dos for Step 2. It’s important to recognize, for everyone who is still staying home, your spending is a lot different than it was in January, February and March. We’re spending more on gro-ceries, home meal kits, (perhaps not sur-prisingly) alcohol and streaming services. But we’re spending way less on restau-rants, entertainment, transportation, in-surance (in fact, we’re seeing rebates), overall shopping, possibly even health care. The upshot: Americans saved an un-precedented 32 percent of our disposable

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income in April and 23 percent in May. These numbers are unsustainable (usu-ally we save about 6 percent). But what they tell me is that by holding on to some of these habits (cooking; grocery shopping once a week instead of daily, which entails meal planning; walking instead of going to the gym; and eliminating subscriptions you now have evidence you’re not using) we can spend less — and save more — going forward.

Step 3: Lock In Lower Long-Term Interest Rates

If there is a silver lining to the period we’re going through right now, it’s that in-terest rates are incredibly low. (I know, I know: If you’re a saver, the silver lining is incredibly tarnished.) Even if you’ve refi-nanced your mortgage recently, you may want to look at doing it again, particularly if you could lock in a shorter-term loan at an even lower rate, cutting the total you’ll

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pay overall in interest. But it’s not just mortgages that are worth a gander: Car loans, student loans, personal loans, re-verse mortgages (no, a refinance isn’t free, but there may be more equity to access) can all be refinanced.

One note of caution. If you are taking steps to save money by using home equi-ty or a balance transfer on a credit card to consolidate out-of-control credit card bills, make sure you put a lid on addition-al spending that you are doing or you risk digging a hole that’s twice as deep.

Step 4: Use That Money to Build an Emergency Fund

As we headed into COVID times, nearly one-third of Americans had no emergency savings, according to Bankrate. Another quarter have some savings, but not enough to handle three months’ worth of living expenses. Clearly, we need these liquid savings. Our resilience depends on it. So,

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as you free up dollars, move them — via an online transfer—into a separate savings account where you are less likely to spend it without making a conscious decision.

Step 5: Get Help if You Need ItFinally, it’s important to realize that this is not the time to stand on ceremony — it’s the time to look for and ask for help. Here, I’ve shared 12 of my most helpful col-umns from AARP The Magazine.

I also run the website HerMoney.com, which publishes a weekly podcast, two weekly newsletters and articles everyday — all free, all on helping you thrive financially.

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Blindsided by RetirementWhat to do if you find yourself

unexpectedly out of workFrom AARP The Magazine, October/November 2015,

with additional reporting by Arielle O’Shea

You plan and plan and plan for retire-ment. But what happens when it takes you by surprise? Two surveys say that’s not unusual. Research from Voya Finan-cial says that for 60 percent of retirees, the timing of retirement was somewhat or completely unexpected. And the Em-ployee Benefit Research Institute reports that half of workers leave their jobs earli-er than expected because of health issues, the need to care for a family member, job elimination or the need, at work, for skills they don’t have. So what should you do if you’re blindsided by sudden retirement?

BreatheBefore you can figure out where you’re going, you need to ascertain where you are, says New York financial adviser Gary

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Schatsky, president of ObjectiveAdvice .com. Take a complete inventory of your financial world to get a grip on six aspects: assets, debts, the interest rates on those debts, income (or cash flow), what your expenses are and, of those things you’re spending money on, which are important and which are not.

Figure out fundingNext, determine whether you can cover those costs. That means a deeper dive into your sources of income, says Tim Maurer, a financial adviser in Charleston, South Carolina. First, look at your retirement ac-counts. Multiply your balance by 0.04, or 4 percent. That’s the approximate amount you can pull from those accounts annu-ally with the expectation that the money will last 30 years. Add to that your annual pension income, if any, and what you ex-pect to get from Social Security each year. (Note: You get a bump of up to 8 percent

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in monthly benefits for each year between ages 62 and 70 that you delay claiming. That argues for delaying Social Security, Schatsky points out.)

Deal with the gapIf your cost of living is greater than your in-come, there are two ways to close the gap: Spend less or earn more.

“The most dramatic improvement most people can make is to downsize,” Maurer says, “and to consider moving to an area with a lower cost of living.” Also, as long as you are able, explore possibilities for earn-ing a paycheck, even if it’s a part-time job, he adds.

And finally, Maurer says, the easiest way to prepare for sudden retirement is to practice. Estimate the income you’d have coming in during retirement, and try liv-ing on that amount. If you can’t, start sav-ing more.

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Budget Busters in RetirementGet ready for these 5 threats to your

financial securityFrom AARP The Magazine, April/May 2019

“Like tossing up a coin.”That’s Michelle, a teacher from Port-

land, Oregon. A guest on my AARP pod-cast, Closing the Savings Gap, Michelle isn’t certain she’ll have enough money for retirement. She fears she could make all the right financial moves and still get hit by expensive surprises.

She’s not wrong, observes Ken Dycht-wald, an expert on aging. His work points to five chief budgetary pitfalls. Here’s what to look out for.

What things costEggs are priced more than 130 percent higher today than they were in 1988. Houses cost about three times as much. We humans have trouble envisioning the needs of our future selves, and inflation

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makes it even harder to forecast our fi-nancial requirements. Help yourself by locking down the costs that you can. For example, a paid-off mortgage (or even a fixed rate mortgage) means your monthly housing cost will never rise.

Generosity gone wildOne common threat to budgets is the de-sire to help grown children (and some-times grandchildren). “Periodic gifts to kids to help with routine items such as child care or cellphone payments have a tendency to morph into ongoing and more significant expenses over time,” notes fi-nancial adviser Mark Eskin of Stedmark Partners in Philadelphia.

Expensive time off“Having a group of close friends to enjoy retirement with is a wonderful blessing,” Eskin says. But hanging out with friends, and keeping up with them, can get cost-

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ly. He says he often sees retirees spending beyond their means because they don’t realize, or fully appreciate, how much wealthier their friends might be.

Sickness (not health care)While health care’s cost shouldn’t be a surprise, the impact of illness still is, Dychtwald says. Illness is “the number 1 reason people wind up not working as long as they think,” he adds. What’s more, most people are shocked by the cost after falling ill. “They’re not secret numbers,” he says, “but because they’re so unpleas-ant, we don’t consider them.”

Happy birthday — againFinally, there’s longevity itself. Though our longer life spans are well documented, Dychtwald says the extra years still come as a shock. One in four 65-year-olds will pass 90; 1 in 10 pass 95. If you use a retire-ment calculator, plug in at least “95” when

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asked how long you expect to live.Which brings me back to Michelle from

the podcast. We paired her with Manisha Thakor, a financial planner at Brighton Jones in Portland, Oregon, so Michelle could get a clearer picture of her pres-ent-day financial resources and her future needs. “It was good to see all the numbers on paper,” she says. “I had some data to help me make decisions.”

It Takes More Than Love When You Marry Later in Life

What to do before you say ‘I do’From AARP The Magazine, June/July 2014

Coming together at 50-plus is different from getting married in your 20s, partic-ularly when it comes to money. “You’ve had a lifetime of solidifying your money beliefs” and behaviors, says Minneapo-lis–area financial adviser Janet Stanzak, These are some ways to smooth the tran-sition if you’re tying the knot this summer.

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Talk about prior obligationsOlder couples bring obligations such as support payments and debt as well as de-cades of financial experience to a mar-riage. Lili Vasileff, a Greenwich, Connecti-cut, fee-only certified financial planner specializing in financial matters related to divorce, suggests sharing credit reports and scores, and reviewing previous di-vorce agreements, which contain details about cash flow, assets and debts.

“If your new spouse has already pledged half his pension to his ex-wife, it’s import-ant to know that,” she says. Tongue-tied? A financial adviser, lawyer or accountant can help connect the dots for your spouse-to-be.

Don’t forget your adult childrenYou’ve probably thought about what you’d like to do for them financially, and they’ve probably thought about what’s coming their way someday. A later-in-life mar-

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riage changes that — and complicates your estate planning. Questions arise: Will the new spouse inherit money that would oth-erwise have gone to the kids? And do all adult children benefit equally from your individual or combined resources?

Discuss your decisions with your new spouse and adult kids, with the goal of re-ducing controversy later on; then consid-er formalizing your plans in a prenuptial agreement.

Dot the i’s and cross the t’sIn addition to considering a prenup, re-visit your estate plan, as well as any ben-eficiary designations. Wills are trumped by legal titles to real estate or by benefi-ciary designations on financial accounts, retirement plans and insurance policies. Make any changes in writing, and be care-ful with Social Security. If you’re closing in on age 62 and intend to apply for a for-mer spouse’s Social Security benefit, don’t

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remarry. You have to be single at the time you apply.

Decide how much to combineAt the time of my second marriage, my husband was in his early 50s, I was in my mid-40s, and we each had two kids. We maintained our individual accounts and opened one for the house. We each kick the same percentage of our incomes into the house account and have a joint credit card. But we pay for our children sepa-rately. (I’m still writing checks for college; he’s done.) The system has worked well for us, as it has for my mom and step-father, who married in their 70s. “It re-moves some of the potential for conflict,” notes Stanzak.

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Money Tips for Re-NewlywedsWhy Jean and her husband keep

their finances separate — and why you might, too

From AARP The Magazine, December 2018/January 2019

My husband, Eliot, and I will soon cele-brate our anniversary. Our marriage, the second for each of us, resembles our first ones, but in one very big way it is differ-ent: We have not merged our money.

At first this seemed appropriate. We came to the marriage with different incomes and assets, and our obligations didn’t match. He was putting his kids through college. I hadn’t hit that expense yet.

A decade later, though, we’ve made some changes. And I’ve learned some things that might make money manage-ment easier for any of you who are remar-rying, or even marrying for the first time.

A prenup is no big dealReally. A few months before our wedding,

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we wrote up what we thought was a fair division of our assets, should we split up. From that, a lawyer drafted a prenup-tial agreement. It’s been in a drawer ever since — a $2,000 insurance policy that says what Eliot came into the relationship with goes to his kids, and what I arrived with goes to mine.

When my mother remarried in her late 60s, she and her new husband also got a prenup to address their estate-planning concerns. Theirs lets her live in his Florida place and him in her Philly one as long as they want; after the second spouse dies, the real estate passes to their respective kids.

Independence is important When are women most satisfied finan-cially? When they’re single, according to a 2017 study of divorced and divorcing women.

Autonomy is the reason, explains New York City certified financial planner Stacy


Francis. I get that. When Eliot and I mar-ried, I refused to let him buy into the house I’d purchased. In his mind, we’d refinance and he’d kick in on the mortgage. No dice, I told him. This was my house. I never want-ed to have to move again. He got used to it. I got over it. We’re now looking for a new place. This one we’ll co-own.

Systems reduce strifeNo matter what marriage you’re on, mon-ey is likely to cause tension sooner or lat-er. Constant negotiating about who pays what bill or how household costs will be divided is enough to stress any couple. In-stead, find a systematic way to approach your monthly costs.

Eliot and I set up a joint account for the household into which we each contrib-ute an equal percentage of our monthly incomes. We also got a joint credit card (funded from that house account) because I got sick of deciding whose turn it was to

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pay for dinner.You have other options. As I found while

researching my book, Women With Mon-ey: The Judgment-Free Guide to Creating the Joyful, Less-Stressed, Purposeful (and, Yes, Rich) Life You Want, some remarried women do all money jointly; some do all separately. And in some single-earner homes, the working spouse regularly puts money into the other’s account, like an al-lowance. It sounds retro. But it can work.

Sometimes you need helpIn February 2018, Eliot retired from his day job and started consulting. Figuring out if he/we could afford it meant asking some big questions, such as whether he could still wait until age 70 to tap Social Secu-rity. Sitting down with a financial adviser helped us figure it out. The adviser also helped us sync up our various investments. You need a joint strategy that takes into ac-count both your ages and retirement dates.

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Finally, keep an open mindNowadays, I (the one who was hell-bent on maintaining “my” money) am thinking about merging more, if not all, of our fi-nances. Why? My anxiety has abated, and I think the move will make it easier for us to manage our accounts. Eliot, however, is not quite convinced. Maybe by anniversary 15?

Read This Before You Cosign a Loan

If you absolutely have to do it, these are a few ways to lower your risk

From AARP The Magazine, October/November 2016

Here’s some good money advice: Don’t cosign someone else’s loan. A 2016 sur-vey from CreditCards.com shows that 38 percent of cosigners lost money because the primary borrower whiffed; 28 percent saw their credit score drop; and 26 per-cent said their relationship with the pri-mary borrower soured. Yet there are times — when your freshly minted college grad needs to lease an apartment, for example

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— when there don’t seem to be other op-tions. In fact, there often are.

Buying a carHelping a borrower with a larger down payment instead of the financing itself can eliminate the need for a cosigner in some cases. A letter from a borrower’s employer that outlines the terms of salary can also help. One alternative to avoid? “Buy Here Pay Here” car lots, which cater to bor-rowers with little to no credit. “The buyer will pay too much for the car, and there’s a very high rate of repossession,” says Philip Reed, automotive writer for NerdWallet. He recommends buying an inexpensive used car, taking good care of it and moving up over time. Cars are more reliable than they used to be, even used ones. If you do cosign, make sure your name is also on the title. You’re taking the same risks as the primary borrower, so you should have the same rights.

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Borrowing for educationWith the exception of PLUS loans, cosign-ers aren’t usually required for federal stu-dent loans. Private student loans are an-other story. That’s why it’s key to max out the use of federal loans before even look-ing at private ones, says Dan Macklin, the cofounder of SoFi, a firm that refinances student loans.

Note, too, that some loan contracts allow for the release of a cosigner if the primary borrower makes a certain number of pay-ments on time, says Persis Yu, an attorney with the National Consumer Law Center. Ask for this beforehand.

If you do cosign, ask the student to re-finance the loan to eliminate your obliga-tion once he or she has an income, Mack-lin says.

Leasing an apartmentFirst-time renters can often get an apart-ment without a cosigner by subletting or becoming a roommate in an apartment

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that already has a primary tenant. Or, for a fee, a renter can hire a cosigner; compa-nies providing this include Insurent.com, LeaseLock.com and Co-Signing.com.

In case you cosign, know that because rent payments aren’t generally reported to credit bureaus, late payments probably won’t hurt your credit. But nonpayments that result in a judgment could.

Hello Mother, Hello FatherFiguring out finances first makes for

a happy multigenerational householdFrom AARP The Magazine, April/May 2015

It’s no secret that the multigenerational household is coming back. What’s surpris-ing is how well those of us in the middle of the sandwich are embracing it. Accord-ing to a MoneyRates.com study of 2,000 adults, about 85 percent say the door is open to adult kids who move back home for financial reasons. Those who have al-ready experienced multigenerational liv-ing feel pretty positive about it, says Rich-

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ard Barrington, a senior financial analyst for MoneyRates.com: “Some say they en-joy it. Very few say they regret it.”

But if there’s anything that can muck it up, it’s money. Here’s how to navigate the transition financially:

Look forwardYour youngest child is a senior in college. Time to downsize? Not so fast, says Na-nette Freedland, a Los Altos, California, marriage and family therapist. Look to the horizon first. Some 36 percent of all 18- to 31-year-olds were living at home in 2012, the Pew Research Center found. Antici-pating a boomerang child seems the odds-on thing to do. Think about furnishing—hello, sleeper sofa—with this in mind.

Get specificYou and your new cohabitant(s) need to agree about how they’ll be contributing and what they’ll get in return. In the case

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of adult children, “there is absolutely a re-sponsibility for the family to request some [financial] contribution,” Freedland says. Will they be paying rent, chipping in for utilities or food, maintaining their own cellphone? Work that out before they move in, and discuss how long the arrangement will last. (Among parents who said they’d let an adult child move in, most thought this should be for a year or less.)

Show your cardsYou need to be clear about who’s paying for what. “It’s not as if the middle genera-tion is exactly flush,” Barrington says.

“People are behind on their own re-tirement savings, and while the younger generation has had trouble getting jobs, their parents have had a hard time getting raises.” Children don’t always know how tough their parents have it financially. Now is the time to share.

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Break the cycleLast, says Tim Maurer, a financial adviser in Charleston, South Carolina, don’t put your child’s financial needs over yours. If you’re the support system and put your situation at risk, the system collapses — then everyone is in trouble. “As they say before every flight, put on your own oxy-gen mask before you help others.”

What about your folks?When it’s your parents, not your kids, who show up with suitcases in hand, 4 out of 5 adults say the door is open. But the sce-nario is different for one big reason: This isn’t likely to be temporary. So …

Assess the situation Why is Mom moving in, asks therapist Nanette Freedland. “Does the family not believe in nursing care, or do they lack funds?” If the former, there may be re-sources to contribute to her ongoing living

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expenses and care. If the latter, your bud-get may have to morph to make room.

Can funds be freed up?Consider not just Social Security and pen-sions, but home equity, says financial ad-viser Maurer. If Mom’s house is sold, you can use the money to finance an addition to your home or pay for care.

Open a dialogue Before you call contractors, sit down and discuss tactics. Will Dad’s proximity mean reducing after-school child-care expens-es? Should Mom set up a monthly transfer of funds? And what’s the process for mak-ing changes? Finally, include siblings if they’re expected to chip in.

“The goal is to figure out how [your par-ents] can be participating members of the family, not just a drain,” Freedland says.

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Who Will Protect Her Finances?With no spouse and no children, she’s

looking elsewhere for backupFrom AARP The Magazine, December 2019/January 2020

Elizabeth Spiegler, in her late 60s, a re-tired office manager in New York City, wrote to me to ask who could handle her financial affairs if someday she can’t. Un-married, she has no children and isn’t that close to her extended family. Her broth-er has her power of attorney for finances, but she’d like further backup. She doesn’t think she can ask her friends, and her fi-nancial adviser doesn’t want the job.

The problemSpiegler is what’s called a solo ager: an old-er person without a partner or surviving children. A SeniorCare.com study found that 78 percent of solo agers had no one to help with the bills or finances. “I think I may be fine,” says Spiegler, who now man-ages her own money. “But what if I’m not?”

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The adviceFor answers, I turned to attorneys and financial experts who work with older people and their families. Each discussed the risk of elder financial abuse and how enlisting the wrong helper — maybe even a relative — can lead to disaster. Here are the experts’ best solutions.

A trust with successor trusteesSpiegler would set up a living (or revoca-ble) trust and put all the assets she could into it now. She’d be her own trustee, naming her brother and a financial insti-tution as successor trustees, to take over if necessary. Eventually, the institution would handle her bills and investments.

“The benefits of an institutional trust-ee are professionalism, experience and guidance,” says New York City estate plan-ning attorney Martin Shenkman. “There are tons of checks and balances to protect you. That’s vital for anyone who is vulner-

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able and isolated.”This safe solution can be pricey. Tradi-

tional trust companies sometimes serve only clients with several million dollars. But mainstream financial institutions such as Fidelity, Schwab and Vanguard also do this work. Their annual charges start at $4,500 (on top of usual investment costs, like fund fees). Even these less expen-sive alternatives, though, cost more than Spiegler — who has a pension and a retire-ment account in the low six figures — feels she can pay.

Bill payers and watchdogsWhat Spiegler needs is a team, says Caro-lyn McClanahan, a Jacksonville, Florida, financial adviser specializing in life-plan-ning issues. “You need people doing the work. But you also need people watching the people doing the work,” she adds.

McClanahan suggests hiring a bill-pay-ing service for day-to-day money manage-

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ment, then having an accountant or attor-ney lined up to make the bigger financial decisions. You don’t want that bill payer to be just anyone, however, cautions Jennifer VanderVeen, past president at the Nation-al Academy of Elder Law Attorneys.

“You want to make sure they’re bonded or insured and that you check out their background,” she says. You can find a ser-vice through the American Association of Daily Money Managers (aadmm.com). Another bill-paying option is SilverBills, a company that reviews bills and authorizes payments for a flat monthly fee.

The outcome “This information is very valuable,”

Spiegler says. But she admits she has a psychological block to getting started: “Right now I like being independent and taking care of my own business.”

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Planning for the WorstWhy disability insurance may be a

must-have for youFrom AARP The Magazine, April/May 2018

It happened at the gym. In 2016, Sharon Epperson, CNBC’s senior personal finance correspondent and a good friend of mine, was mid-yoga when she developed what she describes as “the worst headache of my life.” The diagnosis: A blood vessel in her brain had ruptured; she’d had an an-eurysm. For the soon-to-be-50 mother of two, nothing has been the same since.

Epperson woke a day after surgery with two clips in her brain to stop the bleeding and repair the damage. She was hospital-ized for a month, followed by a long stint of rehabilitation — speech therapy, physi-cal therapy, cognitive therapy and a lot of time working to simply regain strength. Initially, going back to work wasn’t even a consideration.

“Multitasking is your worst enemy,” one

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therapist told her. “You have to focus on one thing at a time and try to do it well.” Epperson was floored. “With the career and the household and the two kids, I didn’t even know what that meant.” She expected to be out of work for six months; she didn’t return for over a year.

And yet this story has a happy ending. Epperson has spent more than two de-cades telling stories about the things peo-ple should do with their money if they want to protect themselves in case of emergency (some 3 million individuals suffer a workplace injury or illness each year — and that’s just at the workplace).

She was prepared. “I’m so happy that I listened to the experts we talk to all the time and the financial advisers who say do this, consider that,” she points out. And still, she emerged with lessons to impart — and things she might have done differently if she had to set herself up for a yearlong disability all over again. Here they are.

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If your employer offers long-term disability insurance, take it

One in 3 Americans working in the pri-vate sector have long-term disability in-come protection through their employer, says disability insurance expert Winthrop Cashdollar, of America’s Health Insur-ance Plans; the number who need cover-age is far greater. Those who rely on their paycheck to pay living expenses, and who could not meet those expenses from other sources of income if illness or injury left them unable to work for an extended peri-od, should have private disability income protection coverage.

While many employers pay for these policies, Cashdollar says more and more are asking employees to contribute some-thing. That’s what happened at CNBC, Epperson recalls. “I asked my financial adviser, who told me, ‘Get as much as you can.’ ”

But many people don’t, Cashdollar says.

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When employees are asked to pay all or part of the premium, less than half pony up. That’s a mistake. Not only do the chances of a disability increase with age, the most common ones aren’t what you think. They’re due more to illnesses than injuries. For instance, 29 percent come from musculoskeletal issues (think back pain and arthritis); 15 percent from can-cers; and 9 percent from high blood pres-sure and heart disease. Considering that the average cost of a group policy is about $40 a month, not signing up is not the right answer.

Supplement with private insuranceEven if you have a policy through your employer, there are two good reasons to buy a little more on the private market. First, group policies typically replace up to 60 percent of your pre-disability gross income, not including bonuses, for in-stance. That may not be enough to live on.

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By adding a supplemental individual pol-icy, you can bring your coverage up to 80 percent. Why not more? “That creates an incentive to avoid returning to work,” says Jennifer Fitzgerald, CEO of Policygenius, an online insurance marketplace.

The second reason is that as you age, you’re likely to have more health issues, not fewer. And if you lose or leave your job, your employer policy may or may not be portable. Plus, some private policies let you increase your coverage amount with-out having another physical.

If your employer doesn’t offer disability insurance, buy it yourself

There’s no getting around it. Private dis-ability insurance isn’t cheap. While rates vary by state, a 50-year-old white-collar male living in New York state and earning $100,000 a year could pay $2,521 to $3,227 a year for a policy that would pay $5,000 a month, according to Policygenius. A sim-

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ilar 50-year-old female: $3,365 to $4,306. (Insurance companies statistically ex-perience paying more claims to women than men, which is why the premiums are higher for women.) But don’t let the price stop you, as there are a few ways to lower it, Fitzgerald explains.

First, reduce the benefit. If you can’t af-ford $5,000 a month in coverage, consid-er $2,000 or an amount that would cover your mortgage and must-have critical ex-penses. Second, increase the waiting pe-riod. Most long-term disability policies start paying after 90 days. But if you have the savings to self-insure for a year, you can reduce the price significantly. Final-ly, you can limit your benefit period. Most of these policies take you up to 65 or the Social Security full retirement age. Fitz-gerald notes, however, that most disabili-ties aren’t permanent; they last under five years. By reducing the payout period, you can lower the cost.

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Automate your financial life as much as possible

In her house, Epperson is in charge of paying most of the bills and other daily money management. For weeks after her aneurysm, she was in no shape to do that, and neither was her overwhelmed hus-band. Fortunately, much of their financial life was automated. The mortgage, electric bill and other key bills got paid automat-ically. “If I had been out longer, it would have been even more serious,” Epperson says. “But it also created an opportunity for discussion with [my husband] Chris about where certain things are.”

Attorney Martin Shenkman, author of Estate Planning for People With a Chronic Condition or Disability, went even further in automating his life after his wife was diagnosed with multiple sclerosis. Not only are all bills paid automatically, but income is deposited automatically, and all passwords (as well as the questions you

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have to answer to retrieve a password if you forget or lose one) are handled by an online password keeper and data vault called Keeper Security; Dashlane offers a similar service.

“If something happens, one of the kids has all the information to get into the vault,” Shenkman says.

Revisit your estate plan, keeping in mind your family members’ capabilities

One of the biggest aha moments for Ep-person was learning how family members react in a crisis: “I could see how my sister and husband and brother-in-law, who are all part of our estate plan, handled things,” she notes, “and to think about who would be the best health care proxy, the best at having financial power of attorney and the best executor.”

According to Shenkman, that’s an astute observation, one that not nearly enough people have: “It’s important to stress-test

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your planning and to be realistic regard-ing whether the people you name have the wherewithal to do the job.” He also sug-gests bringing those people to meet the estate planning attorney (if you have one) so they know what they’re getting into as well as how to handle it.

Finally, don’t wait for a wake-up call. Ep-person acknowledges that if this hadn’t happened to her, she doesn’t think she would have ever changed the pace of her work schedule or “stopped trying to be the best at everything at every moment.” Now her goal is to be the best in the moment she’s in, whether that’s taking her daughter to fencing, watching her teen son’s basket-ball game or working on one story — not five simultaneously — for CNBC.

“It sounds crazy, but to almost lose my life was the greatest blessing,” says Ep-person. “Because it really did force me to realize how much I have to offer and how much has already been given to me.”

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Teach the Children WellMoney lessons for the grandkids

From AARP The Magazine, August/September 2017

Among the vivid memories I have of my grandfather is staring up at the ticker tape at the Bache & Co. brokerage firm in Phil-adelphia, where he’d go to “watch” his tiny portfolio of (usually underperform-ing) stocks. Sitting there with my Pop-Pop was my first exposure to the market and the idea that someday I might be able to own pieces of big companies, too.

Grandparents can give invaluable mon-ey lessons to their grandchildren. “There are messages and values they hear and accept from grandparents in a way they don’t from parents,” says Joline Godfrey, founder of Independent Means, a finan-cial-education firm.

But never undermine the children’s parents in your quest to do a familial good deed. Beth Kobliner, author of the best-selling Make Your Kid a Money Ge-


nius (Even if You’re Not), says she hears complaints about grandparents breaking family money rules. It’s better to discuss with the parents the values, knowledge and money history they want to share. Then offer up your pearls of financial wis-dom, such as:

Start a homegrown 401(k)Children may get frustrated that it can take so long for a small allowance to grow into a large pot. Help foster the savings habit by matching savings deposits dollar for dollar. Or, offer incentives for other be-haviors you and their parents want to en-courage (exercise, reading, cleaning). Pay-ing your grandchildren to do jobs you’d pay strangers to do is a great option as long as you demand they do them well.

Teach mental accountingAdults are more successful in achieving financial goals when they create separate

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savings pools for particular aims. Start that practice early with grandchildren. For ex-ample, divide a $15 gift into three enve-lopes, labeled “Saving,” “Spending” and “Giving.” Or — as the kids get older — break it into four chunks and add in “Investing.”

Give stockYou can buy single shares through com-panies like GiveaShare.com or open an ac-count at, for instance, TD Ameritrade or Ally Invest, which have no minimum bal-ance requirement. Or you can give shares you already own. One caveat: Grandkids sometimes become emotionally attached to stocks that beloved grandparents give them. Make sure they know you want them to sell when the time is right.

Give cash, not gift cardsResearch shows that cash feels more valu-able than plastic. Big bills, by the way, carry more weight than small ones. Your

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grandkids will think twice about breaking a valuable $20 bill.

Or write a checkThen take the child to a bank or credit union, open a checking account and show how to deposit the check or cash. (My children had their first debit cards at 12.) Do this only with the parents’ permission, though, as you are also committing them to the arrangement.

Spend on Values to Feel GoodFor a win-win strategy, align your

money with your beliefsFrom AARP The Magazine, June/July 2017

One winter I spent four days in sunny San Juan, Puerto Rico, with my mother and college-age daughter, simply enjoying the city and time together. Was it an extrava-gance? You bet. Do I regret the expendi-ture? Not in the least.

Since my dad passed more than a doz-en years ago, I’ve been more conscious 47


of spending in ways that line up with the things I value — extended chunks of time with family being one of them. Turns out I’ve tapped a trend. A quick internet search on values-based spending yields more than 7 million entries. Research shows that whether we spend large sums or small, we feel better when our expen-ditures square with what we believe in, explains Lois Vitt, founder of the Institute for Socio-Financial Studies. This is how to get started.

Log your purchasesFor the next week or two, jot down what you buy each day, how much it cost and how you feel about spending the money. At the end of each week, note how you feel in hindsight about each purchase.

Create a mission statementTry finishing these sentences to craft a statement of your own: I believe in

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________. I value ________. Examples could include protecting the environment, im-proving yourself and not commercializing holidays. Then use the mission statement to shape your purchasing patterns, sug-gests Harvard Business School professor Michael Norton, the coauthor of Happy Money.

Favor experiences, not stuffResearch shows that if you spend the same amounts on an experience and a physical thing, the experience will make you happier in the long run, Norton says. “You go out to brunch and you’re buying some quality time with a friend or family member.”

Learn to substituteSpending more than you can afford is, in and of itself, against the values of many people, Vitt notes. Look for an alternative that checks the same “values” boxes at a

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lower cost. For example, had my San Juan break been beyond my means, I could have spent time with my mom and daugh-ter at home for a weekend full of local excursions, or cut the four days to two or three.

Going Cold TurkeyWhat I learned from swearing off

those tempting store salesFrom AARP The Magazine, August/September 2016

It was the trio of merino sweaters that did it. Thin enough to wear under a blazer, comfortable enough for three seasons — and they were on sale! So I bought them in peacock blue and purple, in addition to my fail-safe black. And then … I didn’t wear them. Actually, I wore the black one over and over, but the others sat sadly in my drawer, begging: “Please, give me a chance.”

I didn’t. I couldn’t. Bright colors are just not my thing. But I did do something else. I took a hard look at my closet and real- 50

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ized it was full of items I had purchased simply because they were on sale. And I wasn’t wearing many of them, either.

So, on Dec. 26 — a holy day for bargain hunters — I went cold turkey. I stopped buying things on sale. No discounts. No markdowns. Which did not mean no shopping. It meant I had to like something enough to pay full price.

That turned out to be a high bar to clear. It wasn’t until February that I walked into clothing retailer Club Monaco, a place I had avoided because sales are rare, and bought two dresses, a top and a pair of pants. And guess what? I have worn them all repeatedly — and enjoyed them more than many of my previous bargain pur-chases. What was really going on here? I dug in, and here’s what I learned.

Behind the curtainWe use signals as indicators of whether something is a good deal. Manufacturer’s


suggested retail price is one. Reference prices (the ones that compare a blouse at $90 with another at $200) are another.

“People take for granted that the refer-ence price is accurate,” explains William Poundstone, author of Priceless: The Myth of Fair Value (and How to Take Advantage of It). And the perceived value increases as the reference price goes up. “Emotionally, you’re still drawn to something that seems like a bargain. You can’t unring that bell.” Buying on sale is also alluring because it’s like buying a little shot of self-esteem.

My new rules for shoppingKnowing all this, I hope, will change the way I shop. Perhaps it will change the way you shop, too.1. Consider the product first. Decide how much you’re willing to pay. Then check the price. If it’s over your number, walk away.2. Stay out of outlets. “Something about

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outlets gives consumers permission to purchase,” says Kit Yarrow, author of De-coding the New Consumer Mind.3. Forsake the other colors. “It looked good on you in black,” Yarrow says. “That doesn’t mean it’ll look good in red.” Or peacock blue.

Tidy Up Your FilesAn organized financial life is a gift to

yourself and your loved onesFrom AARP The Magazine, April/May 2016

We all know that we can find satisfaction and reduce stress by decluttering and re-organizing our homes. But that goes for our finances, too.

When you’re organized, “the world around you is supporting you, not fighting you,” says Regina Leeds, coauthor of One Year to an Organized Financial Life. Hav-ing spent quality time with my shredder lately, I must say I agree. So here’s a quick guide to tidying up. 53


Use the same system on both desktops

One factor that makes your financial life complicated is that it runs on two tracks: paper and electronic. If you’re like me, you receive bills in the mail but pay them electronically. Or maybe you receive some brokerage statements via email, others via snail mail. The key to keeping this orga-nized is to have filing systems that mirror each other, Leeds says.

“Give the folder on your computer the same name as the one in your filing cabi-net.”

Know what to keep and what to toss“Organizing isn’t just purging; it’s know-ing what to save,” says Barbara Weltman, an attorney and the author of several J. K. Lasser tax guides. Two general rules: Any-thing tax related gets saved at least three years. Anything tax related that reflects a loss, for seven. Insurance policies? Get

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rid of the old versions when new ones ar-rive. Keep receipts for transactions until you get the monthly bank and credit card statements that reflect them. Then keep the monthly statements until you get the year-end reconciliation. For guidelines on what to keep, check out IRS Publication 17, at irs.gov; learn more about how to pro-tect your information at aarp.org/fraud-watchnetwork.

Have a day-to-day routineOnce you have your system down, staying organized is a matter of upkeep. Put all in-coming bills in the same spot (or spots, if you receive bills both online and by mail) daily, Weltman says. Mark the due date on the calendar; then, after you pay the bill, write “Paid” on it and file it.

Gather tax documents year-roundGrab a three-ring binder with pockets, Weltman says, and use it to house all the

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tax material you get during the year, such as 1099s, acknowledgments of charitable contributions and proof of estimated tax-es. For electronic records, she suggests printing them out and putting them into the binder. The payoff: When you meet with your accountant or tax preparer (or sit down with TurboTax), you’ll have ev-erything at your fingertips.

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