Michele Clark
Clark Hourly Financial Planning - Chesterfield, MO Advisor
1415 Elbridge Payne Road, Suite 255
Chesterfield, MO 63017 USA
Work 636.264.0732
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Michele Clark Quoted in the News: St Louis Post Dispatch article about financial compatibility

February 26th, 2015

The St Louis Post Dispatch quoted me in their article “Is Your Honey Good With Money? Better Find Out Before Tying The Knot.” in the Sunday paper.

I shared my thoughts on couples and financial compatibility.  As a financial advisor for twenty some years, I have worked with many different couples of various age ranges, so I was able to share some ideas for checking to see if you think about money in the same way.

Even if you don’t, one of the most important things to do is to talk about it before you marry.  Money squabbles are one of the leading causes of divorce.  Valentine’s Day has just passed and love is in the air, take a look at this article to make sure it stays that way!

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Emergency Fund: The Foundation for Financial Success

September 3rd, 2013

Unexpected financial expenses seem to crop up at the least opportune time. The car needs a new transmission, you lose your job, or a parent or child becomes ill and you need to reduce your hours at work in order to care for them, taking an unexpected reduction in income. All of these expenses, and others, can drain savings quickly.

Why have an emergency fund?

You can resort to using credit cards to pay for emergency expenses however, worrying about paying down your growing credit card balance can lead to further stress during an already difficult period. You will experience “one step forward and two steps back” where it’s hard to see any progress.

How to create an emergency fund.

The better choice is to establish an emergency fund now. Determine how much money you want to set aside in the emergency fund and set up an automatic deposit into that account once a month for a small amount, so that you establish the habit of adding to the emergency fund. If you have finished paying off a monthly loan of some kind, consider immediately setting that money aside for the emergency fund so you don’t use it for daily expenses. Set up an account with your bank that is not easily accessible so there is less temptation to use the money.

Remember a large screen TV or a vacation is not an emergency. If large items such as these, are on your wish list, start saving for them separately and only use your emergency fund for true emergencies.

How much should you have in an emergency fund?

The rule of thumb is to keep six to twelve months of living expenses in savings for emergency funds.

Whereas a dual income family could get away with six months of income in savings, if you are a single income household, you would want twelve months of income saved.

If you and your spouse work for the same company, there is a greater risk of you both losing your jobs at the same time, therefore it would make sense to keep twelve months.

Having an emergency fund will reduce your stress during periods of difficulty because you can tackle the situation and not worry about the financial aspect.

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Should we pay off our mortgage?

June 29th, 2012

“We have a lot of cash in our savings account.  Should we pay off our mortgage or invest the money for retirement?”

When you give financial advice “by the hour” you get asked questions like these.  And the answer is… it depends.

It depends on;

* your attitude about owing money

* how much of a nest egg you have accumulated for your retirement because you will need cash to pay bills after you stop working and therefore stop getting paychecks

* what other financial goals you have and if you are on track to achieve them

* what interest rate you will pay on the mortgage and the assumed rate on the investments, and other assorted mathematical inputs

“Should we pay off our mortgage?” is a question that is more than a math calculation.  After the math is figured, take it a step further and think about how you will feel during retirement with and without a mortgage payment.

No mortgage in retirement

I have never heard anyone say they regret paying off their mortgage.  And there are ways to tap into a portion of the home equity if needed.  However, many retired folks have shared with me that they wished they had been wiser in their approach to mortgage debt so they didn’t have a mortgage while retired.  I have sometimes noticed during an initial meeting when I meet with a couple who have a mortgage, they seem more concerned about market fluctuation than other couples who do not have a mortgage.

Mortgage in retirement

There are a few couples that I can remember meeting with that have a mortgage in retirement and they were comfortable with it.  They outlined the math in a logical way and how it made sense for them.   They liked that it left them with more available cash in retirement.  I agreed with them, that it seemed to work for them.

When to pay it off? 

If your last mortgage payment is due after the day you would like to retire, jump on one of the many financial calculator websites and figure out the extra payment you would need to send each month in order to time your last mortgage payment with your retirement date.  You might be surprised to find how little additional money needs to be sent in order to pay the loan off by your retirement date.  How great would that feel?  Be sure to call your mortgage servicer to be certain that you do not have a pre-payment penalty, pretty unlikely, but just in case.  Make sure that you can still afford to make enough of a contribution to retirement accounts so that you can retire on time!  And that you are able to save for any other financial goals that are important to you.

What not to do

What I think is unfortunate, is to see a young couple that has heard that it is good to pay off your mortgage sending every available dollar to the mortgage company – with no emergency fund!  And they have not been saving in the company retirement plan, no savings for vacations or other goals.  A balance is needed.  Get the emergency fund created first!  Then create a prioritized list of goals and send money to each based on your priority.

The mortgage problem

The mortgage problem of having a large mortgage when retirement time rolls around isn’t usually created with the starter home, it usually happens when people move up into a series of bigger and bigger homes or take out cash to remodel.   That is when it is especially important to check to see if you can afford to pay the mortgage off by your target retirement date.

What To-Do?

Write down the approximate date that you would like to retire.

Write down the date that your mortgage payment will be done.

If the mortgage will be done after you retire, satisfy your curiosity and find out how much extra you would need to send in to pay your mortgage off in time for retirement.

You could call your mortgage company and ask them.  Or you could use an online mortgage payment calculator and the amount of principal left on your loan, how many months or years until retirement, the interest rate on your loan and find out for yourself.  Just remember that the monthly payment it quotes you is just the principal and interest, if you have your taxes and insurance escrowed you would add that on top of the principal and interest.

Invest just a few minutes, and you could be on track to having your mortgage paid off in retirement.

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Financial Doing: Because if it’s just Financial Planning, it will never happen!

June 1st, 2012

I have a theory that just about everyone has important financial To-Do items sitting on their To-Do list.  However, those financial To-Dos often just sit there because there isn’t a looming deadline to make them seem urgent (“Save for college and retirement?  Oh that’s so far away!”).  You can read more about my philosophy in      It’s on your To-Do. Let’s get it To-Done!

Let’s say you decide to address those To-Do items so you create a financial plan.  Well a plan will not help you if you do not implement it!  So let’s take you from Financial Planning to Financial Doing!  For those of you who have taken the step of creating a plan, I would like to give you some easy things to do so that you can get some momentum going on your path to Financial Doing!

Here are some quick things you can do and knock off of your To-Do list…

Social Security

If you are under 60 years old, the government does not mail you a Social Security Benefits statement any more.  Learn how easy it is to pull up a copy of your statement online in my blog post Full Social Security Statements Now Available Online.

Annual Credit Report

You know you should get your free copy of your credit report each year, but with so many advertisements you aren’t sure where to go.  I clear up the confusion in my blog post Annual Credit Report: Where to go to get your free credit report.

Lost Money

This one is just a “no brainer”; it takes only a few seconds to check to see if you have lost money.  One in ten Missouri residents does.  Are you one of them?  Missouri Unclaimed Property: Are you due some money?

Take the first step today to change your Financial Planning to Financial Doing, I promise, it will feel great to finally start attacking the To-Dos!

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Annual Credit Report: Where to go to get your free credit report

May 18th, 2012

If you own a television, you have probably seen one of the many versions of commercials touting the free credit reports.  Or as you have browsed the internet, you surely have seen the banner ads with enticing “click here for your free credit report” messages.

The problem is, with so many companies saying that they offer the free reports; I have found that many people don’t know where they are actually supposed to go to get their free reports.  But they do know that if they go to those places that are advertising, they are going to be offered something to buy.

The website to use is www.annualcreditreport.com  or call 1-877-322-8228.

Equifax, TransUnion, Experion

Well, I hate to break it to you, but when you go to the official website, the three credit bureaus are going to try to sell you something too.  They are going to ask you if you want to buy your scores.  Do not buy them.  They are not the FICO scores that banks use so the score is not very helpful.  Getting the reports; now that is tremendously helpful, so definitely do that once a year.

What to look for on your reports

Make sure that there are no duplicate accounts, errors in information reported, or activity that isn’t yours.  For information about identity theft refer to the FTC identity theft website.

Which one to get first

This is my personal preference; I like the summary that Equifax provides at the beginning of the report.  If you have not printed your free credit reports before, I suggest printing the Equifax report first and looking over the summary, it is educational as well as informational.

How often to get your Free Annual Credit Reports

You can pull all three at once and be done with it until next year.  Or spread it out and get one every four months as a way to monitor your information on an ongoing basis.  Just keep in mind that, surprisingly, information can vary from credit bureau to credit bureau so spreading it out does not guarantee that errors will be caught in a timely manner.   But if you consistently pull them, any errors will be caught once a year.

For further information see the Federal Trade Commission website for the Free Annual Credit Report.

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All written content on this site is for information purposes only. Opinions expressed herein are solely those of Clark Hourly Financial Planning, LLC, unless otherwise specifically cited. Material presented is believed to be from reliable sources and no representations are made by our firm as to another parties' informational accuracy or completeness. All information or ideas provided should be discussed in detail with an adviser, accountant or legal counsel prior to implementation.

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