As a CPA, you know that understanding personal finances can seem like an overwhelming task to your clients. Yet it doesn’t have to be--especially if they have the guidance of a trusted advisor.
Published in honor of the AICPA’s 125th Anniversary and edited by best-selling financial author and CPA Sharon Lechter, this collection of CPAs’ advice gives your clients the information and tools they need to make managing their money less intimidating and helps them thrive at any stage of life.
Developed as a complement to the AICPA’s successful 360 Degrees of Financial Literacy program, this practical guide makes a great gift for your clients or prospective clients and reminds them that you are their best resource for navigating the tricky money issues that can arise throughout all of life’s phases.
The book discusses how to:
Filled with detailed information, money saving strategies, and expert advice, each chapter is reinforced with personal stories--many from the contributors’ own life experiences--that bring home the book’s lessons.
These tales of financial setbacks, recoveries, and eventual successes demonstrate that with persistent planning, and a little guidance, it is truly possible to save wisely and spend happily.
Sharon L. Lechter, CPA, CGMA, Founder/CEO of Pay Your Family First, is creator of the award-winning ThriveTime for Teens board game, coauthor of Think and Grow Rich-Three Feet from Gold, and Rich Dad Poor Dad, and annotator of Outwitting the Devil with the Napoleon Hill Foundation. She served as a member of the first President’s Advisory Council on Financial Literacy, and is a member of the AICPA’s National CPA Financial Literacy Commission. For more information visit www.sharonlechter.com.
Chapter 1: Goal Setting 3
Smart Goals 4
Specific 4
Measurable 5
Attainable 5
Relevant 5
Time-bound 5
Smart Goal Application 6
Smarter Goals 8
So Why Don’t People Set Goals? 13
In Summary 15
Chapter 2: Taking Control--Budgeting 101 17
Examine Your Financial Goals 19
Identify Your Current Monthly Income and Expenses 20
Evaluate Your Budget 25
How Do You Compare? 25
How To Get On Track 27
Easy For Her to Say 29
From Paycheck to Paycheck to Savings 31
Creating Structure 33
Importance of Keeping Records 35
In Summary 36
Chapter 3: Budgeting Strategies 37
The Importance of Paying Yourself First 38
The Real Difference Between “Wants” and “Needs” 40
The Ripple Effect 42
Walk The Talk 44
Where’s The Cash Going? 46
Back To The Envelopes 47
Have An Emergency Fund 49
Don’t Forget The Obvious 51
Increase Your Means 52
The Benefit of Asking For Help 55
In Summary 55
Chapter 4: Penny Wise and Savvy Investor 57
Small Savings Add Up to Big Money 58
Delayed Gratification 61
Garage Sale Treasures 62
Bulk Buying Benefits 63
Be Mindful of Receipts 65
Taking Advantage of Every Opportunity 66
Reducing Your Income Taxes 68
The Savvy Investor 70
In Summary 73
Chapter 5: Good Debt, Bad Debt 75
Credit Cards--Good Or Bad? 81
The Good, The Bad, and The Ugly 83
Credit Cards and Emotion 85
Debt Counselors 87
But It’s Interest Free Debt! 89
They Chose Me! 91
What is My Credit Score and Credit History? 93
So How Do I Get From A Bad Credit Score to A Good Credit Score? 95
In Summary 96
Section 2: Money and Relationships 97
Chapter 6: Money and Marriage 99
The Money Talk 101
Prenuptuals 102
Postnuptials 104
The Dream and Plan Talk 104
The Putting Into Practice Talk 105
The Credit and Debt Talk 108
The Reality Check Talk 110
In Summary 111
Chapter 7: The Dreaded Divorce 113
Divorce and Personal Financial Planning 114
Planning For Your Advisors 116
Mediated Or Traditional Divorce? 117
Hidden Costs of Parenting Post Divorce 122
In Summary 124
Section 3: Raising Financially Savvy Children 125
Chapter 8: Kids and Money 127
Setting Goals 129
The Power of The Bank Book 131
Making It Fun 134
Making It A Game 135
The Family Vacation 136
The Family Budget 138
My Own Budget 142
The Entitled Generation 143
The Power of Earning It 144
From Earning to Investing 146
Investing In Stock 147
In Summary 148
Chapter 9: Allowance 149
Spend Less Than You Earn 154
Where Does My Money Go? 156
Budgeting Basics 157
Write It Down 159
In Summary 162
Chapter 10: Teens and Money 163
Value of Money 164
Lesson 1: Developing A Budget 165
Lesson 2: Getting Creative--Earning More and Stretching More 169
Stretching the Budget 171
Igniting Creativity 173
Lesson 3: Saving For The Future 174
Having Savings Creates Options 175
Utilize and Maximize Your Savings
Opportunities 177
Lesson 4: Using Credit Wisely 178
College--Out of Sight But Still In Your Pocket 181
College, Pizza, and Bouncing Checks 183
Lesson 5: Parents As Bankers 184
Support Not Dependence 184
In Summary 186
Chapter 11: Paying for College 187
Systematic Savings From Birth 189
Systematic Savings Vehicles 191
Traditional Savings Accounts 191
Education Specific Savings Accounts 192
“Outside The Box” Innovative Systematic Savings Ideas 193
Scholarships and Grants 197
Scholarships 197
Grants 198
When You Still Need A Loan 199
Federal Education Loans 199
Private Borrowing 200
In Summary 202
Chapter 12: A First for Everything 205
First Cell Phone 206
First Checking Account 207
First Car 209
Moving Out 213
First Home 218
Your Wedding 224
In Summary 226
Chapter 13: Importance of Charity 227
Experience is The Best Teacher 228
Gratitude is The First Step 230
Closer To Home 231
Learning From The Younger Generation 233
It Is Never Too Late to Teach Your Children 234
In Summary 236
Section 4: Plan for the Future 237
Chapter 14: Life’s Unexpecteds 239
Do You Feel Lucky Today? The Concept of Risk 240
Loss of A Loved One 245
Financial Safety Net 247
Special Finances For Special Needs 248
Identity Theft 253
In Summary 257
Chapter 15: Retirement Planning 259
Start Saving Early--and often 261
How Early is Too Early? 262
How Much Will I Need to Save? 264
Retirement Planning Strategy 264
Roller Coaster Markets, Roller Coaster Emotions 266
Importance of Trusted Advisors 269
In Summary 272
Chapter 16: Retirement Saving 273
What Pension Plan Do I Choose? 274
Take Advantage of Your Employer Plans 274
Not So Early In Life? It Is Never Too Late! 278
Other Retirement Plans 281
How Can I Plan For Retirement If My Employer Doesn’t Offer Retirement Benefits? 281
The Roth Ira--A Plan With Tax-Free Earnings 283
Options For Small Business Owners 285
403(b) and 457 Plans 287
Retirement Planning Using Annuities 287
Retirement Planning With
Traditional Investments 287
So Many Options…How Do I Choose? 288
In Summary 289
Chapter 17: Estate, or End of Life Planning 291
Isn’t Estate Planning Only For The Rich? 292
So Where Do You Start? 293
Estate Planning For All Ages 294
Over 18 294
Young and Single 295
Unmarried Couples 295
Married Couples 295
Married with Children 296
Comfortable and Looking Forward to Retirement 297
Wealthy and Worried 297
Elderly or Ill 298
Will Your Estate Be Taxed? 299
Exemptions and Maximum Tax Rates 299
Choose Your Executor Wisely 300
Share Your Plans With Your Loved Ones 302
Protecting Your Parents 304
In Summary 306
Section 5: You Are Not Alone 309
Chapter 18: Value of Great Advisors 311
Sudden Wealth Syndrome 320
Through The Eyes of The Advisor 325
In Summary 327
Chapter 19: The Next Steps 329
Afterword 335
Appendix: Financial Education Programs and Resources in Your State 337
Contributors 341
