The Shot-Caller with Plans

A recent New York Times  article revealed that to be considered “middle class” in New York City, one has to make about $160,000 per year.  In other areas of the country, that salary can get you farther–maybe a nice home with a pool, a car or two and a comfortable lifestyle–but in NYC, you’re lucky to be living in a doorman building in a decent part of town and possibly have a parking space.  If people making six-figures are still struggling to afford certain essentials, what if you make a five-figure salary?  How can you possibly maintain a decent lifestyle, have your needs met and maybe even afford a splurge or two?  And more important, how can you save money while living in NYC on a not-so-hefty salary?

Jennifer Cole, a freelance graphic designer (, learned the hard way that to save money as a small business owner, it takes organization, prioritization and thriftiness. Yet over the past 4-5 years, she managed to save $35,000 on a $50,000 a year salary–and can still afford to pursue her hobbies, travel and shop!


The Tough Early Days

Up until recently, Jennifer’s experience with money had seemed like a crazy a rollercoaster ride. Growing up, she witnessed her family wrestling with money problems and debt, and she had always had a tenuous relationship with money. In college, she trained herself to be thrifty, living on $50 a week, and became adept at using coupons at the grocery store, prioritizing splurges and being creative with her existing wardrobe.   That frugality extended even down to her shampoo!  Later, as a business owner, Jen struggled to abide by this philosophy, but eventually she found herself in a hole.

She started her graphic design business in San Francisco, then moved to New York City several years ago and struggled to balance the responsibility of her business with the financial demands of living in a big city.  As an entrepreneur she knew that the key to success was managing her finances so that her business could sustain her lifestyle.

Her “aha” moment came one day when she was balancing her checkbook and realized she had spent $2000 in the past 2 weeks.  She was mortified and disappointed with herself–because the bulk of that money was spent on frivolous things and not on necessary expenses.  Soon after, she received a tax bill in the mail and didn’t have the money to pay it.  She quickly realized that if she was to continue her freelance business, she would have to be more organized, and allocate portions of her paychecks to taxes and other expenses.

Making Changes

After some soul-searching and thanks to a loan from a family member to help her pay the tax bill, Jen got herself in gear.  She dove into what she calls “spreadsheet land,” and set up a system that tracks her paychecks.  So now when she gets a $6000 check, she knows it doesn’t all go directly into her checking account; rather, she allows herself to keep half for monthly living expenses, then portions the rest into tax payments, retirement account, savings and business equipment/expenses.

Once she set up her spreadsheet and started using it, saving was a cinch!  By allocating her paychecks to savings and taxes, she didn’t have any lingering worries about missing payments or outstanding debt.  She knew how much she had to spend each month on necessary and variable expenses, and was automatically putting money into savings because of the way the spreadsheet was set up.  The more she saved the more peace of mind she had–and the easier it was for her to set priorities.  With her spending money, she learned how to live on a budget and make the right decisions, and the most important concern for Jen was to be unencumbered with money problems.

Rules To Live By

Five years later, Jen has a thriving business and a healthy savings account, yet continues to live below her means. She says, “Whenever I make money, I don’t up my lifestyle.  I have a hefty savings account but still live in a 300 square foot studio apartment.”  What rules does she live by?  “Set financial goals, live by your rules but don’t change your lifestyle if you get a raise or come into money.”  She says the most important lesson she’s learned is to “align your values with your money; that helps you prioritize how you save  and on what splurges.”

So even as she continues to grow and take her business to the next level, Jen also allows herself the occasional splurge, especially on her favorite hobby–traveling.  She is a fan of and, sites that offer low-cost travel options for budget-minded consumers.  Jen also does much of her wardrobe shopping online, and snags deals on sweaters, coats and boots all year-round by using coupons and specials advertised on the sites.  In that way, she is always shopping and never “needs” anything.

And this year, she has been pursuing another goal.  With her business and finances in order, Jen has been hitting open-houses and meeting with real estate brokers with the hopes of taking advantage of the low-moderate income housing opportunities available in New York City.  These governent subsidies may help Jen buy her first home–a benefit for people at her income level–but, alas, not available to the six-figure ‘middle class.’


Hairy Therapy Remix


I am your typical New Yorker.  Like many of my fellow city-men and women, I know how to hail a taxi without getting side-swiped. On escalators, I stand on the right and walk on the left.  I let people get off the train before getting on.  I give tourists succinct, exact directions – even offer restaurant recommendations – but don’t linger for small-talk.

However, as a New Yorker, I am an enigma.  That’s because I do not have a therapist.

It seems that every friend, colleague, acquaintance or person behind me in line at the drugstore has at least one therapist and sees that person pretty regularly. It’s not uncommon for a friend to start a conversation with, “Dr. Tony says my journaling is really helping me work through my issues.”  Or interrupt a dinner party to proclaim, “My therapist thinks it’s because my father never came to any of my piano recitals.” Or grab the phone in a panic and shriek, “I need to call my shrink!” after a night of debauchery.

I know that going to therapy is good for one’s mental health and can actually help people learn to deal with anxiety, stress or depression.

Don't tell me, tell your therapist!

Don’t tell me, tell your therapist!

However, as a woman of Middle Eastern descent, I prefer to spend my therapy money on more pressing matters – specifically on laser hair removal, electrolysis and waxing.  No therapist will help me get over the memory of me as a little girl in the fourth grade, sitting in my reading circle surrounded by my classmates. Compared to the cute, skinny blond girls in their bobby socks and tennis skirts, I was a thick hairy rectangle that smelled like hummus, sporting tube socks up to my thighs to cover up my hairy legs.  That’s a memory that is burned into my psyche and for that reason, I prefer to get rid of the evil that caused my anxiety, rather than go sit with someone and have a chat about it.

But everyone needs therapy – or even self-reflection – in order to take responsibility and move forward.

Similarly in personal finance, it’s important to do a little self-reflecting.  Especially now, at the beginning of a new year and as we gather our financial paperwork for tax time, it’s helpful to examine our finances, be honest about our spending and saving habits, and set some new goals to change bad behavior.

Here are some tips for planning a more financially rewarding 2013…

1. Before setting impossible goals for 2013, be thoughtful and thorough. Review your tax paperwork and last year’s budget.  Be painfully honest with yourself and ask, am I happy with the amount of money I made last year? Did I reach any of the financial goals I set for myself last year?  How or why not?  By actively taking the first step – looking honesty and critically at last year’s finances and identifying your satisfaction level with it – you can begin to set the right goals for next year.

2. Figure out your debt and make a plan to deal with it.  Add up your total annual expenses plus any additional debt; what is the ratio of expenses to income?  Were you able to manage debt and also save last year?  If not, review your spending/budget from last year and find three things you can cut out in order to reduce spending, manage debt and/or save.  Allocate the savings to a specific debt or to your savings in order to reach a particular goal.  Be specific.

3. Don’t have a 2013 budget yet?  SET ONE UP NOW!  Use to set up a budget online, create an excel spreadsheet to track expenses or just write it down old-school.  Find a way to track your spending and then do it.   Manage debt by consolidating into a low-interest rate credit card and make sure you are paying more than the monthly minimum if you can.  Budget and save up for a six-month emergency cushion, even if that means putting $50 a week into your savings account.

4. Grow your money.  If you have a savings account and an emergency fund, consider taking a chunk and investing in short-term CDs or mutual funds or ETFs.  These can be low-risk options that can help you increase your savings instead of lingering in a low-interest savings account.  Also, make sure you are contributing to your company’s 401(k) and if your company doesn’t offer one, set up an IRA or a Roth.

5. Set a personal financial goal (that is also attainable) for 2013 and take the steps to get there.  Do you want to increase savings by 20%?  Do you want to get rid of all credit card debt?  Are you saving for a new home?  If that means taking an additional shift at work or getting a part-time job, do it. Or, are you ready to invest $15,000?  Check out some of the top online brokerage sites like Fidelity, Scottrade, or Etrade that also offer research and investing tools so you can do it yourself.

And if you’re ready to seek professional help, visit to find an advisor in your area or for fee-only advisors. Like a therapist, a financial advisor can help you identify bad habits, set priorities and help you reach your goals.  But they probably can’t help resolve any lingering daddy issues.

The Shot-Caller With Style

Alexandra Suzanne Greenawalt knew almost from the start that she was meant to be an entrepreneur.  After graduating with a BA in French from Boston University, she worked in Paris as an intern for a small fashion PR firm.  Back in the States, she worked in PR and fashion for several years.  Yet early in her career she knew that her intense work ethic was a hot commodity and became dissatisfied with her office jobs.  Alexandra says,”My experience in a cubicle made me run from working for a company. At one company, I had built their online community only to have them [the company] tear it down.  After that, it just didn’t feel right to work for other people.”

Career And Style Re-Invention

She came to New York City and started her personal styling business 12 years ago, and has never looked back (check out her unique offerings at  She specializes in working with successful professional women by offering a variety of styling packages, including her signature Style Re-Invention, an 8-session program that ‘kicks style into high gear.’  Alexandra’s style makeover process is comprehensive, from bra fitting to closet editing to image consulting to shopping to putting it all together. It’s an all-encompassing program for women who want to develop their personal style or who may be going through a change in her life–whether weight loss, a new job, divorce, moving to NYC–and wants to rebuild her wardrobe.

Alexandra Greenawalt

Alexandra Greenawalt

The rewards of owning her own business are tremendous and Alexandra admits, “I’ve never thought of quitting [her business] once I started on the path of fashion styling because it’s my true calling.  What drew me away from commercial work and editorial styling is that I felt replaceable.  With my private clients, I feel appreciated and cherished.  I get to help change a woman’s life for the better.”

The Long Road To Success

But the entrepreneurial path isn’t easy, and Alexandra found that out the hard way.  While she admits that she got lucky when she first started out on her own, and landed a national ad campaign for Pantene, she soon learned that these big jobs are few and far between and that it’s often “feast or famine.”  She made tons of phone calls to contacts, editors and people in the fashion industry to get started which lead to a few more gigs.  But it was only after she built her website that she saw her business shift and new clients and referrals come her way.

Slowly but surely, Alexandra developed her styling business and established herself in this competitive industry, but when the recession hit, her business took a huge hit.  She had plenty of sleepless nights and worried about the uncertainty.  She says, “I questioned whether I was doing the right thing [by sticking with her business] but every time I took a job self-help test, it lead me back to styling.”  So instead of folding, she stuck to her guns and updated her website.  As a result, she’s attracted new clients who were drawn to her unique website and her clear, specific offerings.  Now, she gets most of her business via Google organic searches as a result of her great SEO and strategic blogging.

Along the way, Alexandra wrote and self-published, “Secrets of a Fashion Stylist,” a book she said she had wanted to read since she became interested in fashion (available on her website).  The book chronicles some of her past mistakes and experiences as a fashion stylist, helping wanna-be stylists to establish themselves and avoid some of the pitfalls of the industry.

Smart, Stylish & Budget-Minded

While the entrepreneurial lifestyle has its advantages, like the freedom of taking an 11 am yoga class, the downside is that income can be inconsistent.  Alexandra has had a lot of experience in managing her budget.  From an early age, she’s had to be money-minded; her mother gave her the responsiblity of balancing a checkbook and a budget since she was in middle school.  When she started her business, she used her savings from past jobs so that she wouldn’t have to couch-surf.  She keeps her business and personal accounts separate, and always negotiates for lower prices and deals with vendors.  When she was building her website, she decided to launch it in stages instead of all at once so that she could pay it off incrementally.  She keeps a lean over-head for her business, uses virtual assistants like Elance  for special projects and design, and keeps a home office to save money.

When it comes to budgeting for fashion, Alexandra offers simple but wise advice: Don’t buy things you don’t need and don’t buy things until you need them.  Use credit cards wisely–like if a card offers cash back on purchases or low interest rates for the first 6 months.  And most important, it’s OK to splurge but make sure you have money in the bank to pay for that splurge.

The Bond Bubble Explained

Thanks Tony Conte of Conte Wealth Advisors for this clear explanation of the bond bubble!

The past decade has been one marked by quietly inflating bubbles which unexpectedly burst leaving, financial markets reeling, diminishing opportunities for profit, and leaving investors’ life savings in unsettling flux due to volatile securities prices.  The burst and deflation of the technology bubble in 2000 led markets spiraling downward and, exacerbated by the terrorist attacks of 2001, erased a stunning $5 trillion of market value in just two harrowing years. More recently, the burst of the housing bubble helped to weaken markets and played an integral role in the evaporation of $16.4 trillion in U.S. household net worth from spring of 2007 to the market trough in mid-March 2009.

Bubble Bath

With the ever-imminent threat of total hysteria over daily market movements (thanks in no small part to the immediacy of reporting on 24 hour news stations drumming up advertising revenue through the creation of catastrophes, each complete with its own theme song), let’s get a little perspective before we whip ourselves into a frenzy in search of the next big bubble poised to burst.  A “bubble” in financial markets is simply the trading of an asset or security at unreasonably high valuations (eg. over priced stocks) followed by a sudden devaluation of the security, or a crash in prices.  Bubbles are as old as currency and countless numbers of them in varying magnitudes have risen and fallen over hundreds of years.

Some bubbles are fun, others not so much.

Some bubbles are fun, others not so much.

Tiptoe Through The Tulips

Ever heard of the Tulip Bubble?  That’s right, there once was a financial crisis surrounding the price of the popular, and seemingly innocuous flower which must complete a 5 to 7 year gestational period before being harvested and sold as the tulip that we’ve all come to know and love. A Dutch craze for the flower brought from Turkey and Holland led to an insurmountable demand while supplies dwindled due to the many years required for the plant to properly flower and replenish supplies.  At the height of this tulip-mania, some Dutch homeowners were trading their properties for tulips, which saw a 20 fold increase in value in just a month’s time.  The clearly unsustainable valuations collapsed over a period of weeks decimating the value of some tulips to merely one hundredth of their previous prices.  This was in 1636.

The Tulip Bubble

The Tulip Bubble

You see, bubbles are not new and are certainly nothing to panic about, but rather they are something to be wary of and managed with care and caution.

Madge, You’re Soaking In It

The funny thing about bubbles is that we often don’t seem to recognize the formation and growth of a bubble until we suffer the detriment of its decline.  The challenge in predicting even the existence of a bubble can sometimes be overcome with a reconciliation of bare facts.  Let’s lay them out here and see what you think.

In the first three quarters of 2012, roughly $220 billion had flooded into bond mutual funds. Going back just a few years to the collapse of Lehman Brothers in 2008, over that period of roughly four years investors deployed a staggering $900 billion in cash to bond mutual funds.  Many investors look to bonds for safety of principal and stability (relative to equities and some other assets), and fear of investing in more volatile assets seems to have encouraged an exponentially increasing interest in holding bonds and bond mutual funds. What many investors may not realize is that you can, in fact, lose money investing in bonds.

When the price of a bond goes up, it’s yield (the cumulative return of the instrument accounting for not only the bond’s interest rate, but also the price you had paid to purchase the bond) goes down. Could investors be mistaking the rising valuations of bond funds over the past few years as evidence of their supposed safety? The converse is also true: when interest rates finally begin to increase, the value of outstanding bonds is expected to decrease.  The all-time record high prime rate in the United States was 21.50% onDecember 19th, 1980. This means that if you were purchasing a bond around that time, you were lending your money to a company or entity in exchange for a bond certificate which promised that the entity would pay you interest (commensurate with the insolvency risk of the company issuing the bond) around that incredibly high interest rate.

In hitches and starts over the ensuing decades, at least until December 12, 2012, that prime rate has decreased to its current (as of this writing) standing at 3.25%.  Knowing what we know about the effect that interest rates have on the value of bonds in the secondary markets, one might deduce that the 30 year bull run on bonds will have to come to an end if rates are ever expected to go up.  To give you a sense of what this may mean to US Treasury Bond investors, consider this: A 10 year treasury bond issued at a 2.82% interest rate could see a 42% loss in value from a mere 3% rise in interest rates. Meaning, if you’d held $100,000 in these bonds prior to the rise in rates, you would only be able to sell those bonds for $58,000 in the secondary market after the 3% rise.



What To Do?

At first glance, the bond bubble situation may seem dire, but the informed investor may find him/herself well positioned to take advantage of this seeming inevitability.  True, investors have often bought bonds in a flight to assumed safety; however, in times when even the seemingly “safe” investments threaten to veer into a range of volatility, what is an investor to do?  We counsel some of our clients to consider avoiding bond mutual funds in favor of purchasing the individual bonds themselves with an intention to hold those bonds until their maturity.

Fluctuations in the value of a bond that an investor had intended to hold until maturity should minimally, if at all, affect

the investor’s long term expectations of yield. Most bonds are redeemed at a flat $1,000.00 per bond.  If a bond price fluctuates to a value of $900, $800, $700 or even lower, it could still eventually achieve redemption at “par” (that $1,000.00 value for most bonds).  This remains only one of many strategies to utilize this asset class with full understanding of the possibility of a coming storm and the ensuing rude awakening for complacent bond fund holders.

Bubbles come and go, of course, but with proper and prudent management and investment guidance, the average investor still can stand to gain from these perceived threats to our economy.

Anthony M. Conte, MSFS, CFP ® Managing Partner Conte Wealth Advisors, LLC 2009 Market Street Camp Hill, PA 17011 Phone: (717) 975-8800 Fax: (717) 975-0646 Registered Representative Securities offered through Cambridge Investment Research, Inc., a Broker/Dealer, Member FINRA/SIPC. Investment Advisor Representative Cambridge Investment Research Advisors, Inc., a Registered Investment Advisor. Cambridge and Conte Wealth Advisors, LLC are not affiliated.

Measure Your Financial Body Fat

It’s mid-January; do you know where your New Years Resolutions went?

Hard to believe that the holidays were just 2 weeks ago.  Usually by mid-January, the mild depression caused by lack of sunlight that grips most of us in the Northeast is in full effect.  This year it’s that plus the flu.  No wonder, then, that many of us have discarded our New Years Resolutions like some forgotten grocery list dropped on the floor of the Times Square subway.

Picking up the pieces of our New Years Resolutions

Picking up the pieces of our New Years Resolutions

But even if you got sidelined by the flu and haven’t been able to make it into the gym yet, or maybe went to Macy’s with the $100 gift card you got for Christmas and accidentally left with a couple of pairs of boots, three cable-knit sweaters, a blender and a European-style mattress, don’t let a little bad behavior stop you from making good on the promises you made to yourself.

One of the top three resolutions has to do with money.  People vow to get out of debt, save more, or start investing.  Setting financial goals is always top of mind for most people.  And like the other top resolutions–losing weight, becoming a “better person (whatever that means) or volunteering (good luck with that!)–nothing will be achieved unless you set goals, make a plan and work towards those goals.

But before you go transferring your entire savings account into your 401k, or opening an online brokerage account and depositing last week’s unemployment check, or saving up for a Bloomberg station so you can start day-trading…chillax.  Think of the old adage “you don’t know where you’re going ’til you know where you’ve been.”  In other words, determining your financial foundation first helps you understand yourself better and your attitude towards money which in turn will help you set–and achieve–better financial goals.

Recently, I joined a new gym.  I’d been going to the good ol’ run-of-the-mill gym for years and was tired of the broken machines, humid conditions and questionable stains embedded on the “clean” towels.  This new gym is beautiful, shiny, sleek; it’s the gym that the one-percenters go to, and even though I am not currently a one-percenter, this gym gives me access to this special status, if only for 3-5 times a week.

The one-percenters on treadmills

The one-percenters on treadmills

With my new gym membership , I’m entitled to a couple free personal training sessions.  I recently met “Tareeq,” a tall Dominican glass of water who approached me in the gym and pretended to flirt with me so that I would make an appointment with him (yes, that’s what they do, those wily personal trainers; they flirt with you and flash smiles in hopes that you will hire them as a trainer!  And of course it works.)

Last week was my first session where we basically took my measurements, did a fitness test and talked about my goals…basically a humiliating start to my Friday.  Funny how I started out the session pretty optimistic, cracking jokes, telling Tareeq that my weight “ain’t nothin’ but a number, just like my age, know what I mean?  Haha!” And then by the end of the session, after I had ran, walked a steep incline, attempted push-ups, sit-ups, gotten my fat pinched in various parts of my body and then stepped onto a scale–I was depressed and quiet.  My goals had changed.  I had walked into the session thinking, ‘I feel good, just want to tone up my lower body, and have fun working out’ but after I had evaluated my present state of health and fitness, I wanted more.  I wanted to lose weight, strengthen my core, lower my blood pressure, burn more fat during a workout, fix the sag situation in various parts of my body.

When it comes to finance, just like in fitness, we often make lofty goals without truly evaluating our situation and our attitudes–and as a result fall short of our goals.  By establishing a financial foundation first, you get a better idea of your good and bad habits, and the areas in your finances that need immediate attention; this leads to setting the right goals and the steps to tackle these issues.

This first step in setting a financial foundations is to understand yourself.

1. Be mindful.  In yoga, we’re aways reminded to be mindful of things.  “Be mindful of your breath.” “Be mindful of thoughts for they turn into actions which turns into the truth yadda yadda.” “Be mindful that you don’t scrunch your neck in downward dog.”

I am very mindful of this beautiful sunset.

I am very mindful of this beautiful sunset.

These are small reminders that can be extremely important to the practice of yoga and to receiving the full benefits of a pose.  When it comes to money, we should also be mindful of our actions and reactions to money-related matters.  How do you feel when you get your credit card bill in the mail? Do you instantly cringe and throw the bill in a  desk drawer, only to be found sometime in mid-August?  Or do you react in the opposite way, panicked by a fear of debt, spend your whole paycheck on bills and leave yourself with a twenty-dollar bill for the rest of the month?

What is your current state of debt?  What is your monthly income?  What are your fixed expenses that you need to live on per month?  Find these numbers and memorize them.

2. Change your attitude.  Many people approach money issues with a sense of fear.  I’ve heard people complain that they don’t understand finance, it’s complicated or boring.  Others don’t want to delve too far into their finances for fear that they’ll discover how majorly dramatically horrifically in debt they are (which is probably not the case).  Still others may think they don’t have anything to worry about because they’re too young, don’t earn enough money, or have someone else make money and investing decisions for them, etc.

First of all, take a good hard look in the mirror and acknowledge how you feel about money, debt, retirement planning and investing.  Are you afraid to ask questions at the bank, or talk to a financial advisor because you feel like you don’t make enough for someone to care about your questions or accounts, or because you don’t want them to think you’re stupid or because you don’t want them to sell you something?  My advice: walk into the bank like a gangster.  Act like you own the place.  Look at the bank advisors like they work for YOU.  I mean, they don’t, but if that’s what it takes to get you to change your attitude, tell yourself those lies!

Think of yourself as the Godfather and your financial advisor as your trusted Consigliere.

Think of yourself as the Godfather and your financial advisor as your trusted Consigliere.

The opposite of fear is confidence.  It is incredibly empowering when you can overcome your fear–or maybe even just ignore it or side-line it–in order to start a conversation with an advisor, ask questions and take control of your money (and not the other way around).

3. Create a process that works for you.  Let me start by saying that I hate math.  Anything that has to do with numbers–even the calculator on my Iphone–is extremely puzzling to me.  I am often stumped when someone asks me to times a number by 10.  So when it comes to establishing a budget and managing my finances I don’t use an Excel spreadsheet.  I like things spelled out, so I gravitate towards specialized programs like, and I also like keeping good old-fashioned notes in a notebook (or on my Iphone).

Some couples use the envelope method to manage their household finances.  They stuff money into envelopes dedicated to certain parts of the household budget and anything left over from fixed expenses can be used for the variable expenses like entertainment, big purchase items or hair extensions.  I have a friend that lives and breathes Excel.  She uses Excel at work of course, to manage her household budget and bills but also to manage expenses on a group outing, for vacation expenses, even for shopping.

No one process works for every person; you have to find the method that is convenient, easy to use and something that you’ll stick to.  And then stick to it.

Establishing a financial foundation, like fitness, is a simple (sometimes painful) process that can lead to establishing the right goals.  Once you know “who” you are–with regard to your attitude, your fears and your habits towards money–you can set real goals based on that reality.

Your financial foundation can also be a great scare tactic that inspires you into action–kind of like what happened to me after my fitness test last week.  I was back at the gym every day this week, and even tried some exercises Tareeq showed me.  He would’ve been so proud if he saw me on that treadmill–but he was too busy flirting with a new member at the juice bar.

New Year, New Deal

By now, everyone is pretty sick and tired of hearing about the fiscal cliff.  The fiscal cliff has been discussed, dissected, analyzed, blogged about, and counted down.  It seems every man, woman, toddler and goldfish knows about the fiscal cliff!

Fortunately, Congress finally got its act together and on New Years Day passed legislation that presumably kept the US from falling “off the cliff.”  In other words, if nothing had been done to avoid the fiscal cliff, then on January 1, 2013, taxes would have increased for most Americans, many middle class incentives would have expired and several harsh mandatory budget cuts would have begun to take effect, basically cutting many social services Americans rely on.

Now before we go organize a parade to honor our magnanimous government leaders, let’s get realz.  This fiscal cliff debate had been going on for years and was a major theme of this election.  Everyone knew when the deadline was and what was at stake.  By leaving any negotiations on a deal to the very end and then pushing legislation at the last second, our  politicians acted like a bunch of high schoolers who had been cutting class all semester long, only to be pulled aside by the school counselor and warned that failure to pull a C- on the final would result in failing 12th grade and staying back a year.  So for the last 2 weeks of school (or in the case of Congress, the last 2 days of the year!) the students pulled all-nighters and tried to prove how earnest and hard-working they were about passing chemistry.

So in my mind, there are no heroes in this deal.  Although I do applaud Speaker Boehner and Congressman Paul Ryan for standing up for the Bill during the session AND following up by putting their vote where their mouth is.

But now that we’re here, on the other side of the cliff and no one drowned, there’s a brand-spanking-new piece of legislation to wade through.  So let’s do this:

What’s in the Bill:

1. Extends low tax rates for most Americans

The Bill permanently extends the Bush tax cuts for most Americans.  In other words, the low tax rates that we’ve all enjoyed since President Bush introduced and Congress passed in 2001, will continue to be in force permanently.  Individuals who make less than $400,000 will be taxed at those rates (top ordinary income tax rate of 35%, 15% capital gains and dividend tax).

2. Raises taxes on the wealthy

For individuals who make $400,000 or more and families who make $450,000 or more, their taxes will go up.  The Bush tax rates were not extended to these individuals and families and so their top tax rate is 39.6%, capital gains and dividends taxed at 20%.  Please also note that beginning in 2013, there is an additional tax imposed on investment income thanks to the health care bill.  For families who make $250,000 or more, they will have to pay an additional 3.8% tax on capital gains, ordinary income, dividends, royalties and interest on amounts above the $250,000 threshold.  So for some unlucky (but wealthy) few–their ordinary income tax rate could be almost 44% and 23.8% tax on capital gains and dividend income.

3. Limits to deductions and personal exemptions are back

In addition, taxes get even more complicated for higher income Americans–even for those who make less than $400,000–because the legislation brings back 2 tax provisions that were frozen by the 2001 Bush legislation.  The personal exemption provision (PEP) reduces or eliminates the benefit of the personal exemption for high income earners, and the Pease provision, which limits and greatly reduces the ability of high earners to make certain deductions. These provisions will apply to individuals who make $250,000 or more and families who earn $300,000 or more a year.

4.  Sets estate tax and exemption

The bill also addresses and makes permanent the estate tax rate and estate tax exemption, another set of taxes that were in flux over the past 10-12 years because of their temporary status.  The estate tax is the amount of tax that a decedent’s (dead person) estate must pay on the value of the assets of the decedent, minus the estate exemption.  The new legislation  permanently set the estate tax (as well as the gift and generation skipping transfer taxes) at 40% and thereafter adjusted for inflation.  The estate exemption–or the amount of a decedent’s estate exempt from tax– remains at $5 million (for couples it is a cool $10 million).  This means that for wealthy families, they can continue to shelter up to $5 million of the estate from tax and then pay a 40% tax on the remainder.

5. Extends middle class incentives

The bill also extends several middle class tax credits and incentives for education and families.  It extends for 5 years the American Opportunity Tax Credit, the Child Tax Credit and the Earned Income Credit.

6. Extends the AMT patch

It also makes permanent the AMT patch (which is an alternative tax provisions intended to make sure that the wealthy pay their fair share in taxes but because it was never adjusted for inflation when it was created, it has slowly been creeping into the middle class).  The legislation allows for the AMT to be adjusted for inflation going forward.

7.  The legislation also extends unemployment benefits for workers who would have otherwise run out of benefits this year.

8.  Many pro-business, renewable energy and “green” tax credits are also extended.

9.  Payroll tax holiday

The Bill did NOT extend the payroll tax holiday.  This was instituted two years ago by the Tax Bill of 2010 and basically gave a tax break to every working American.  During normal tax years, every worker must pay 6.2% Social Security tax on  income.  The 2010 Tax Bill cut this tax by 2%, saving Americans about $10-20 in taxes per paycheck.  The recent legislation did not extend this tax holiday so this year every worker is back to paying the full 6.2% of tax on up to $113,000 of their income, or an additional $2274 in taxes annually.

What’s NOT in the Bill:

The Bill did not cover any significant budget cuts, entitlement reform, any meaningful deficit reform or corporate tax reform.  Many if not all of these issues will be addressed shortly, however, as Congress gets ready for its next major rumble when the government hits the debt ceiling in March.  It’s very likely that the Republicans will demand concessions, spending cuts and changes to entitlement during the coming debt ceiling debate.  The tension builds….

Give and Get

As we get closer to the end of the year, now is the time to make last-minute tax strategies.  Believe it or not, one of the most commonly used “tax strategies” is making charitable donations.  Depending on your tax bracket, you can get a hefty tax deduction for the value of the cash, stock or gift that you make to a qualified charity. You can confirm whether a charity is “qualified” by visiting or

For more tips, check out my updated post below and found at

How To Have a Scroogeless Holiday–5 Charitable Giving Strategies

So it’s the week after Thanksgiving and the next few weeks will fly by faster than any other time of the year.  It seems that as soon as Thanksgiving comes and goes, we all start racing around, finishing up work projects, planning for next year, attending holiday parties, tree-trimming gatherings, department lunches, mailing holiday cards and trudging through the mall for holiday shopping.

And whether it’s for a cause or organization we believe in, or solely for tax purposes, this is also the time when many of us make our first and/or final charitable gifts to charity for the year. Here are five smart charitable giving strategies to keep in mind:

1. Clean out your closets! And your kids’ closets, your spouse’s closets and maybe after you pull the Christmas paraphanalia out of the garage, consider reorganizing that space as well. At this time of year, charitable organizations like Goodwill, the Salvation Army and community shelters need old coats, sweaters, jeans, boots and other items of clothing.  Just make sure that when you drop off the bags of gently used shoes and clothes, that you get a receipt from the charity with the name of the organization, a description of the items and rough estimate of their value.

Many of these organizations will also happily accept furnitire and household items, and will sometimes even pick up the items.  The same documentation rules above apply to furniture but items over $500 will require an assessment and filing IRS form 8283.

2. Stock-it to them! If you are one of the fortunate few with highly appreciated stock in your portfolio, consider making a gift of that appreciated stock to the charity instead of a gift of cash.  In that way, you’ll likely make a larger contribution with stock than with cash and avoid paying capital gains tax if you had sold the stock.

Keep in mind that the deduction you receive is based on the type of asset or gift you transfer to the charity.  In general, you can deduct a gift of cash up to 50% of your income.  For a gift of property and capital gains asset, you can deduct up to 30% and 20% respectively.  Any unused portion of the deduction not taken may be carried over into the following years up to five years.

3.  Sometimes cash is king! Although charitable giving is reported to be slightly up for the first nine months of 2011, giving in general is significantly down from prior years and charities are still struggling to stay alive.  In many cases, the communities they serve deserately need their services.  If you are willing and able, it’s a great time to offer cash to your favorite charity.  Most charities accept gifts made in cash, by check, credit card or wire transfer.  Just be sure to get a receipt from the charity for the cash, or keep your credit card statement, bank record or other receipt as documentation.

4.  If you haven’t already, now is the time to make a charitable donation to the Sandy relief efforts.  Even though it’s already been 4 weeks since the storm hit the Northeast, many communities in NY and NJ are still suffering and in desperate need of support.  Are you short on cash but rich with personal and sick days at work? The IRS and Treasury recently released guidelines that allow employees to give up paid leave to make a cash donation to a favorite charity.  The employee does not receive a charitable deduction, but the value won’t be included as taxable income either.

5.  Time is money but it’s not a write-off! It’s cool to volunteer but remember that you can’t claim your time as a charitable gift.  However, you can deduct all your out-of-pocket expenses, including clothes, mileage, meals and other expenses incurred while volunteering.  So although you can’t claim the time you spent building homes for Habitat for Humanity, you can deduct your cool work outfit and supplies.  Just make sure you kept your receipts.

Especially in tough economic times, many people might find it more difficult to give to charities.  But charitable giving offers significant tax benefits and it’s a great way to support your community.  Using some of all of the above strategies, gifting doesn’t have to hurt your wallet either!

Hurricane Sandy Aftermath: 7 Tax Tips For Donations & Volunteers

Last week, Hurricane Sandy passed through the northeast, ravaging towns, homes and shorelines.  The cleanup process in the damaged areas has already begun, but there is much work to do.  There has been an amazing response to the disaster and many people are donating money, clothing, food and supplies as well as volunteering to cook for people living in the shelters, helping to gut and clear homes that were damaged by the storm, delivering supplies, cleaning  up neighborhoods, sorting donations and more.

Marshland in Staten Island post-Sandy

If you have or are planning to donate money or clothing/food to a charity or if you want to volunteer, here are some tax tips to keep in mind:

1. Remember that you can’t get a tax deduction for the time spent volunteering (i.e.  if you volunteer for eight hours, there is no hourly rate that you can claim as a deduction).  HOWEVER,

2. You can deduct your expenses for transportation to and from the volunteer site, including travel costs and lodging.  Examples could be deduction for cost of metro card  or mileage for driving (at 14 cents a mile).

3. You can also claim meals the day of volunteering as well as special clothing you might have purchased in order to volunteer.  In the damaged areas in NY and NJ, many volunteers are asked to bring their own shovels, work gloves, masks and other special clothes and equipment needed for cleanup; the cost of those items will likely be deductible so hold on to those receipts, as well as the receipt for the Subway meal you picked up for lunch.

4. If your expenses exceed $250, you must get a receipt from the charity indicating what was done and what will be claimed.

5. To claim a deduction based on making a cash donation, you are allowed to deduct the total amount up to 50 % of your annual gross income (AGI).  Make sure that when you are donating cash to charity that you verify the charitable organization.  You can check out whether a charity is legit by visiting

6. If you are donating clothing, blankets, shoes, supplies, etc. to a charity, you can claim the current market value of the items you donated.  Make sure to get a receipt from the charity and list the items and the approximate dollar value for your records.

7.  In addition, in the wake of Hurricane Sandy, the IRS and Treasury Department have just released a special relief program for volunteers.  Employees may donate their paid leave (ie. sick days, personal days and vacation) to a qualified charitable organization in exchange for an employer cash donation.  If the employer chooses to adopt such a program, the value of the cash donation or gift will not be counted as gross income and therefore not taxable to the employee.  However, the employee will not be able to claim a tax deduction.  Similar emergency provisions were made after Hurricane Katrina and the 9/11 attacks.  For more information, refer to IRS Notice 2012-69.

This post is for informational purposes only.  The information herein should not be relied on for financial, legal or tax advice.  Please consult with a tax planning professional for further information.

Twas The Night Before The Election-A Poem

Twas the night before the election, and all through the land,

The people were wondering,”Of the two guys running–which one can l stand?”

Between Romney and Obama, the contest seems tight

After their fiesty debates, it seems more like a fight!

The people were divided about who was the best

The guy who plays basketball or the guy in the vest?

Which was more honest, which was a crook?

Was the incumbent an American, like he wrote in his book?

The people blasted their opinions and tweeted their thoughts

Reading Op-eds From Fox News to Huff Post, connecting the dots.

Articles were forwarded from sister to colleague to friend

Arguing why Obama’s right for the economy in the end.

Others disagreed saying the country needs a change

Smaller government, bigger military and a lower tax range.

Still others were undecided and just wanted some fun

They mocked and rolled their eyes, mumbling “Can’t wait til this is done.”

Celebrities endorsed their favorite candidate

George Clooney! Lindsay Lohan? Ironic that they can decide fate!

Donald Trump…

What a chump!

And as the campaign progressed and things got pretty heated

Friends became enemies over whether the Prez should be unseated.

People argued their beliefs in the streets, hallways and on Facebook

Suddenly opposed to big oil or food stamps-or any tax haven nook.

Wall Street and Main Street were divided again

No to mention the 1%, the 47%, the rights of women.

The comics and late shows came up with their best satire

To poke holes in the platforms and influence who should retire.

From the imitations, sketches and sarcasm of SNL

To the “get out and vote video” by Will Farrell.

The message is clear and the message is right

The future of America will be decided tomorrow night!

Whether you think with your head and vote with your heart

Or the other way around, there’s no one way that’s smart.

Just get to your polling station and cast your vote

It’s a right and a privilege–and it’s free I might note!

But no matter who wins-Democrat, Republican (or Green)-one thing is for sure

Enough with the smack talk and promises, he must be a doer!

What To Do About Sandy

Hurricane Sandy, you’re a jerk.  While I like having an extra day off of work, I usually enjoy a day off when the sun is shining and stores are open.  As it stands now, I am refilling water bottles, collecting candles, charging my cell and eating my way through the fridge.  NY1, our local news station, keeps me updated on every borough and I’ve seen the same image of water lapping the boardwalk of Coney Island about 17 times.  I just spent about 30 minutes vacuuming my 500 square foot apartment, and I have 4 loads of laundry–mostly cushion covers, bath mats and stuff I don’t care about normally–swishing around downstairs.  I’m bored.

Friends are calling and texting and we’re all trying to maybe kinda if possible strategize about getting together somehow.  But also afraid of getting stranded.

Gloomy Highline

They’re telling us that things are about to get cray in a couple of hours, so here are things I plan to do before the lights go out in NYC:

1. Take a walk by the river and survey the rising water

2. Do yoga

3. Eat leftover Indian food

4. Do about 45 minutes of work (ie. check Facebook and Twitter)

5. Cook this amazing chicken dish with squash, mushrooms and tomatoes

6. Watch last night’s episode of ‘Homeland’

7. Eat leftover chili

8. Drink some wine

9. Check Facebook and update my status a couple of times

10. Talk on the phone with every long-lost friend since high school

11. Take NY1 off mute and listen for 10 minutes and then yell at the TV

12. More wine

13. ‘Work’ (Tweet)

14. Give myself a mani-pedi-mask

15. Listen to my drunk downstairs neighbors fight

16. Eat some cheese and crackers with olives and wine, then the rest of the ice cream in the freezer, then make a salad to make myself feel better.

By then, it will probably be about 3 pm and I will have to make another to-do list.

On the Money Moxie side of things, here are some things to do before the lights go down in Georgia:

1. Organize monthly bills

2. Organize desk and filing cabinets

3. Switch out summer/fall/winter closet

4. Collect old clothes to donate to charity

5. Make a holiday budget

6. Clean out fridge and throw away old/expired food

7. Review 401k and IRA statements, check balance and compare with last 2 quarters; do some research on funds by going to

8. Catch up on “Dexter”

While I like getting my home and finances organized, I think this might juts be a day for #8.