The Watchful Eye

Volume 1, Number 1 Winter, 2008

Introduction

My wife, son, and I have been clients of Hermening Financial Group since 2002�which was before I started working here. Some of you know that I used to be a school superintendent, and now am a Certified Senior Advisor (CSA�), which qualifies me to listen to you about senior citizen related issues and help you find answers to your questions. It doesn�t qualify me to give you financial advice! Keep that in mind as you read this.

If you asked Kevin about me, however, he�d say that I am, well, thrifty. My wife and son would agree. They often yell at me for buying generic canned food items, for example. I reply that when you save money on the stuff that doesn�t matter, you can spend it on the stuff that does. So I am proud to be thrifty person, and I only buy the generics that don�t taste awful.

Anyway, I like to read the consumer financial news in magazines, newspapers, and professional journals. I do that to get ideas about how to become even more thrifty. Kevin used to wonder why I always used to check the performance of the investments we owned BEFORE we became his clients and compare them to the ones he recommended. I did that for a year, then gave up because a) it was too much hassle and b) Kevin�s choices were always doing better. But that tells you how skeptical I am. I like to be confident that what our family does financially makes sense to someone besides me.

Thus is born this blog. It is intended to share good ideas with you, our clients, that are reported in a variety of places and publications�Kiplinger�s Personal Finance, Money Magazine, Consumer Reports Money Report, Kiplinger�s Retirement Report, Wealth Manager, Fortune, Time, Newsweek, and others, for example. How are the contents of the Blog selected? I do it, all by myself. My criteria are that the topics are interesting to me and potentially useful to you, as well as to my family. I plan to post the Blog on our website about every quarter. Expect the next one in late March or early April. Let me know what you think (bills@hermeningfinancialgroup.com) and if you�d like me to address and particular topics. And feel free to send me an e-mail to request the HFG information I refer to here.

As always, there is no guarantee that this information is accurate, appropriate to your circumstances, or anything else. It is presented on an �AS IS� basis. If it interests you, I recommend (as I always do anyway) that you find out more before you act. Get professional financial, legal, or other advice. Use what we call in research the �triangulation� method. That means that if three very different sources conclude the same general thing, you can be more confident that it is in the ball park.

On Line Bill Paying: Finally I DID It!

My 21 year old son and 87 year old mother-in-law have been saving stamps and managing their finances through free on-line bill paying (from their bank) for at least the last three years. I have read in many places (Kiplinger�s, Consumer Reports, and Money, for instance) that it is cheaper, easier, and more secure to pay one�s bills on-line than through the mail. So last fall, I sent a letter to my bank, which, at the time, didn�t offer the service. Please note: you can almost always sign up for an automatic withdrawal from your bank account with a biller. I hate that because I don�t actually control the amount I pay�which is always what they charge anyway, but it is the principle of the thing. I wanted to do it through my bank. Well guess what? As of 1/1/08, my bank offers the service! So I can still go into the branch bank in my town, have them greet me personally, AND manage my finances on-line. Ever the skeptic, though, I only signed up to have a few bills paid on line at first until I see if it REALLY works. And a month into the system, wow! It works slick. This was one of my personal financial goals for 2008 and I�ve already done it! Check and see if your bank offers this service. Try it out. It is pretty neat�and you can access your accounts (if you remember the answers to your security questions) from different computers, in case yours breaks.

Where�s Your Stuff?

HFG has written two documents designed to help you and your family know where your important documents and valuables are located. If you�d like a free copy, send me an e-mail and I�ll send you either a) the long one or b) the short one. A hint: I�m personally working on the longer and more complete one�and am not close to done. The idea is to have someone other than you be able to locate key financial and personal records in case you can�t do it.

How NOT to Drive Your Tax Preparer Crazy (Consumer Reports Money Advisor) Save money by doing some tax homework in advance. Find and sort your key information into major categories your preparer will need or has asked for�W-2s, 1099s, reports of stock sales, forms needed to document itemized deductions. Write an explanation of any complex issues that your preparer needs to know. Fill out the pre-conference organizer your preparer sends you. Every hour that your preparer spends sorting out things you could have done beforehand costs you cash!

How to Stop Identity Theft (Kiplinger�s Retirement Report) You don�t have to be paranoid, Kiplinger�s suggests, but you need to be smart. Do the obvious�don�t give out your social security number or respond to unsolicited telephone offers or respond to e-mails that want you to give out and �verify� your bank account number. But you should make a purchase! Get yourself an inexpensive cross-cut shredder. Shred all those �convenience checks� and credit card offers, as well as documents you don�t need that includes your account numbers.

Answers to Your Questions about Senior Issues

I�ve prepared a list of websites that have a wealth of information about senior citizen issues. If you or a family member needs to know more about social security, Medicare, care giving, long term care options, Alzheimer�s disease, or any number of health, economic, social, or just plain fun issues, drop me an e-mail or note and I�ll send it to you. We update the list regularly.

Save Money with Online Coupons (Kiplinger�s Retirement Report) Before you buy anything online, check out whether there are any coupon codes for the site you are interested in. At www.Retail-MeNot.com, enter the name of the web site of the store you are planning to buy from to see if coupons or promotional codes pop up. You could also check Current-Codes.com or CouponMountain.com

More Savings

Seniors (and the qualifying age varies by company) can often get great deals at retail stores just by showing up on the right day. In our area, for example, at least four grocery chains have monthly 5% off days, several of the big box discount stores have senior days with savings of 10-15 percent off even sale prices, and other stores have targeted sales for seniors. It pays to clip coupons. It also pays, if you need something at a store, to wait until there�s a discount day. Of course, you only save money if you limit your spending to what you wanted in the first place!

Drink Drink and Be Merry (CSA Journal: Society of Certified Senior Advisors) Water is pure liquid refreshment. It is necessary for your body to digest and absorb vitamins and nutrients. It also detoxifies the liver and kidneys, and it carries waste from the body. When it comes to digestion, it�s just not happening without water. Fiber alone cannot aid proper digestion. In fact, without water as its partner, good fiber goes bad, causing constipation and extreme discomfort. And another thing. Did you ever notice how much extra it costs to order a beverage when you go out to eat? You might save a buck or two by ordering your meal and having�you guessed it�water to drink instead of something else.

And Finally� (Consumer Reports, February, 2007) There�s a great (and short) article about simplifying your financial life in last February�s issue of Consumer Reports. Most of the advice is tried and true, but these �top ten� suggestions bear repeating:

� Put your savings on autopilot by paying yourself FIRST with automatic transfers to savings � Pay your bills on-line. I�m a recent convert, and it works! � Consolidate your investment accounts with one company. One statement, not many� � Automate your investment tracking. Many firms do this for clients (including us) but you can also do this with a service such as www.quotetracker.com � Dump your extra credit cards, but keep your oldest ones�better credit history that way. � Use one home and car insurer. The better to get discounts, Consumer Reports says. � Computerize your taxes. Most people can really simplify the tax preparation process by using well respected software. � Toss (shred) needless paper. Tax related items you need to keep for seven years; cost basis and real estate purchase information for as long as you own the item. But other receipts? Get rid of them once a transaction appears on a bill. � Safeguard your financial identify. Shred (SHRED) all statements with account numbers or social security numbers�including those pre-approved credit card offers. In fact, get rid of those by going on www.optoutprescreen.com (or calling 888-5-OPT-OUT) � . Don�t give out key information when it is requested by phone or on-line. � Draw up a durable power of attorney (and while you�re at your attorney�s office, make sure you have a healthcare power of attorney too). The time to do those things is when you are healthy.

Enjoy the seasons. Spring will be here soon and we�ll appreciate it more because we made it through winter.

Disclaimer: Certified Senior Advisors (CSA) have supplemented their individual professional licenses, credentials, and education with knowledge about aging and working with seniors. Know what these licenses, credentials, and education signify. The CSA designation alone does not imply expertise in financial, health, or social matters. Details: www.csa.us