About Galia
For more than twelve years, Galia Gichon has been helping consumers and professionals understand the world of finance and wise personal money management.

Galia Gichon launched Down-to-Earth Finance to demystify personal finance, money management and investing for individuals—particularly women—who have found money matters baffling and intimidating.

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http://downtoearthfinance.com

Latest Entry

8 Great Tips for Saving Money & Having FUN!

Yes, we are in the midst of a financial crisis. Everyone is feeling it, especially those of us on "Main Street." But does it mean that you have to give up having fun? Here are a few ways to still have fun in your life, spend guilt free but still watch your bottom line.

1. Need an excuse to shop?
Use old gift cards! Almost everyone has an old gift card lying around in a drawer or wallet with a balance you forgot about. You can also sell or trade any of your cards on plasticjungle.com.

2. Have a swap party with your girlfriends!
Help stretch your budget when you have the urge to go shopping and buy something new. Invite everyone to bring a bag of clothes, or a purse they don't use anymore, and you all go home with a new piece of trendy clothing!

3. Make your wallet as beautiful as possible.
This is one of the first things you can do to start looking at your money in a more positive manner. You don't have to spend a lot on a new wallet, but take pride in how you deal with your money on a daily basis.

4. Shop on EBAY or Craigslist for the latest designer bags.
At the same time, sell a purse that you don't use anymore. You can find great deals on slightly new and used bags and if you sell one you aren't using you can come out even!

5. Look for deals at your favorite stores and coffee houses.
Use a pre-paid card at Starbucks and now you get free WIFI. Starbucks is also giving out coupons in the morning for free drinks in the afternoon, so you get two for one!

6. Space out your luxuries.
If you are getting a manicure every week, get one every other week. At the same time, say no to the extras and go back to basics – no more French manicures - but that new shade of pinky-beige? Perfect.

7. Don't pay for a gym membership AND yoga classes.
Choose one or the other or look for a gym that offers both. Cutting out the one you don't use as often can save a lot of money. You can also ask to renegotiate your gym membership for a better rate.

8. Pick Friends with good money habits.
Stop spending as much time with girlfriends who shop too much or go to the trendiest restaurants, spending too much on drinks and dinner. You can always make an excuse to meet them after they've shopped or after dinner for a quick drink.
 

Previous Entries

Weathering the Storm
 

I too am nervous about this market.  I have spent so much time on the phone and emails these last two weeks and have to really think before I speak.  

One thing I do know is that you can not put your head in the sand and ignore the current market.  Having a plan and taking a few action steps will only help you feel better and more in control of your money.

Here are a few tips you can do right away.

* If you are feeling a ca.sh flow strain or want to save more money to build up your emergency savings account, consider reducing your contribution to 401(k) by just a few percentage points.  Don’t stop it all together.  You will still be saving for your 401(k) and your retirement, but you will have a little extra ca.sh when you need it.
 

* A positive point is that you are buying at a low point (very low) in the market.   It is one of the fundamental points of dollar-cost averaging.  You are getting more for your money!
 

* If you do not need your retirement for at least seven years, do NOT sell all your investments! According to a T. Rowe Price study, it is very likely that you will run out of money during retirement if you did not invest in stocks, since the portfolio won't be able to keep up with inflation.
 

* Pick a moderate action plan.  I spoke with a client this morning and she was very very nervous.  Her gut told her to sell everything.  I talked her off the ledge and she agreed to sell a portion.  She feels like she is doing something but still keeping her investments for the long-term.

Tips For New Grads

So, you've graduated. Now what?

If you are looking for a job or getting ready to start a new job, reality will soon set in that Mom and Dad aren't paying the bills any longer. Take heed of these few money messages and before you know it, your bank balance will be in the triple and quadruple digits. Plus, you will be setting the groundwork for healthy financial habits for the rest of your days.

1) No matter how little you are earning, setup an automatic transfer from your checking account to a savings account. Even if it is only $25 a month, just doing that amount at age 22, will get you nearly $61,000 by age 65. Check out the Orange Savings Account at ING DIRECT or American Dream Savings Account at EmigrantDirect for a higher interest rate than your local bank.

2) Take a class or read a book. You might not have majored in Finance in college, but learning the fundamentals of mutual funds or ABCs of IRAs and 401(k)’s is essential to passing your real life exams. Sign up for a personal finance or financial planning class at your local community college or continuing education program. You can also buy a personal finance book with a friend and get together at your local watering hole to discuss it.

3) Pass on the plastic. You might have become reliant on it to pay for books or even spring break but get serious now and live within the bounty of your new salary. If you can’t pay off your balance every month, then don’t use your card. As simple as that. If you are starting off with a credit card balance, come up with a plan to aggressively pay off your debt.

4) Sign up for your 401(k). You might not think you can afford it but you will not even miss the money after the first few weeks. Make sure you contribute enough so your company matches. If your company doesn’t offer a 401(k), then open a ROTH IRA at a no-load mutual fund company such as Fidelity or Vanguard. Make your contributions automatic as well.
 

Spice Up Your Goals

“Money is only a tool. It will take you wherever you wish but it will not replace you as the driver.” Ayn Rand – Atlas Shrugged

Does paying off your debt or not ending up like a bag lady sound like fun? Not really. Sometimes the goals we create for ourselves are so constrictive and unappealing that we are not motivated to setup a plan to reach that goal.

Why not spice up your goal and make it more tangible? If you want to buy a new home or upgrade your current one, put a picture of an actual home in your neighborhood (in a realistic price range) on your fridge or near your computer.

I love Big Sur and got engaged at this amazing resort Post Ranch Inn . I have a postcard of my favorite view in my office. It motivates me to spend less on wasteful expenditures that I don’t even remember and put more into my savings for my Big Sur vacation.

Check out "MY MONEY MATTERS" kit.
Featured in Newsweek and Essence Magazines!
www.mymoneykit.com

Bright Fresh Money Ideas

Last week, I had my first beach vacation in years (without kids)! The fruity cocktail tasted even better knowing it was 20 degrees in New York City! While you are finally getting out those sweaters, why not do a quick house-cleaning on your budget? I recommend one every six months. Find FIVE places to plug in your budget.

If each saves you $25 a month (or more!), that is an easy extra savings of $125 a month. Then setup an automatic savings to a mutual fund yielding 7% (on average) and in five years you have almost $9,000. In twenty years, you have $65,000. Imagine, by just finding five places to plug. Here are some suggestions on where to look.

1. Your cable bill. I just realized that I was not using Netflix. It made more sense to either downgrade my service or cancel it and just go to the video store. At the same time, I checked my cable bill and realized I didn't need all those channels as well. $40 monthly savings.
    

2. Insurance. If your home-owner's premiums are high, consider increasing your deductible. Just make sure you have some money set aside in an emergency savings account to protect yourself for small emergencies. This will make a big difference in your monthly premium. $50-100 monthly savings.
    

3. Newspaper and Magazines. Are you guilty of buying People or US magazine at the supermarket? If so, maybe it's worth investing in an annual subscription. On the other hand, do those daily newspapers or magazines pile up? Consider canceling those subscriptions or getting the newspaper delivered on the weekend only. $30 monthly savings.
    

4. Keep your cell phone number, but change the service. Start by calling your cell phone provider and see what they can do for you. I always save money when I make those calls. At the same time, perhaps the company you have had for years isn't the best one. Shop around. $20 monthly savings.
    

5. Lower your rates. Call your credit card company today and ask for a lower rate. It usually works! $25 monthly savings.

4 Steps to Create Your Personal Money Plan

I visited my sister in Colorado this weekend. It was the first time she and I had a sisters weekend in over 3 years. Long overdue! We had a blast. Let's face it money is so personal. Sometimes we just need a nudge in the right direction to get us started. Follow these easy 4 steps to create YOUR PERSONAL MONEY PLAN. Also, if you want to start your own business but don't know where to start, check out the Small Business Association. They have FREE Business Plan classes.

1. State Your Money Goal Pledge. "I will increase my automatic monthly savings to $500." Write it on a piece of paper and tape it to a mirror.
2. When you have success for a month, reward yourself (i.e. manicure). Just don't spend a lot.
3. Get support. Call an Independent Financial Advisor, register for a seminar, find a money buddy or buy the PERSONAL FINANCE TOOLKIT!
4. Don't beat yourself up. If you fall off the horse (we all do!), dust yourself off and get right back on.
5. Repeat steps 1 - 4.
    

7 Steps to Take in a Down Financial Market

1) Build up your emergency savings account. Open an online savings account if you don’t have one already. They pay a higher interest rate (at least 4.5%) than most banks and FDIC insured.

Visit www.ingdirect.com, www.emigrantdirect.com, www.fnbodirect.com (6%!). Setup an automatic savings.

2) Make sure you are diversified. Truly diversified. Every person should have some type of intermediate term bond in their long-term portfolio or retirement portfolio. It will protect you if the stock market continues to go down.

3) Keep your expenses low. If your mutual funds are going down 6-10% (which is comparable to this market), having a high expense ratio will only add to those losses. Keeping your expense ratio low and only buying no-load funds helps stem the losses.

4) Evaluate your mortgage situation. This area seems to be hit the hardest in this current market. If you need to refinance because you have an ARM mortgage, get on it now and start calling mortgage brokers, your bank and go online to www.eloan.com and www.bankrate.com. Deal with it now because the mortgage situation could get worse and interests will probably be going up. Also, if your house is larger than you can handle, downsize. You don't need the 4,000 square foot home.

5) Keep investing in your 401(k) and IRAs. Especially if you are contributing automatically, you are taking advantage of dollar-cost averaging and buying at a low price. As long as you are diversified, especially through a target retirement date mutual fund (like at Vanguard, T. Rowe Price or Fidelity).

6) If you are retiring in the next 5 years…. You should not have a huge percentage of your portfolio in equities. Lock in fixed interest rates on bonds and fixed annuities and setup a ladder system for your bonds and CDs. Decrease your exposure to stocks as soon as possible.

7) Stop using your credit and debit cards. The stock market and mortgage situation could get worse before it gets better. Don't accrue more debt and you will only be in a more secure situation.

Are You Saving Too Much?

I recently spoke at Barnard Alumni group. It was so exciting to see a room full of young women asking such serious questions about their investments and savings. Even if you haven't gotten started, there is so much you can do; it doesn't matter where you are. Spring is here and I am so thankful I can leave the house without putting hats and mittens on my little girls. Try reasoning with a 15 month old she needs to wear her hat!

There have been a few articles recently, including the New York Times, discussing if you are saving too much. A few smarty-pants clients couldn't wait to forward it to me—thanks! While I appreciate the article's good intentions, I wanted to address a few key points.

1. Understanding wall street.

The main argument is that Wall Street wants you to amass assets so they can make money. You can defend yourself against by finding out exactly what you are paying and keeping your fees as low as possible.

Suggestions:
* Buy and Hold investments
* Low cost Index mutual funds
* No-load mutual funds

2. Online calculator.

The articles report that financial firm's online calculators state you should save 78% more than you actually need. If you believe this, then do a checkup with an independent online financial calculator at www.money.com or www.kiplinger.com or in the PFT to get an unbiased opinion.

3. Focus on income.

The articles continue to say you should focus on income from pensions. Most of us don't have a pension! Buy they do give some solid suggestions:

* Pay off your mortgage
* Live debt-free
* Downsize your home and expenses
* Move to a cheaper region when retired