Family & Business Matters Archives

Great Advisors Ask Great Questions

Tom Waring on November 5, 2020

In the decades I’ve spent advising individuals on their businesses and their wealth, I’ve observed that people are often concerned about having the “right answers.” It makes sense. We all want to be correct, feel affirmed, and know we’re on the path of success. However, I’ve learned that to arrive at the “right answers,” you need to ask the right questions. At Note, we believe great advisors ask great questions. The kinds of questions others might not.

Questions you never get to fully contemplate in the day-to-day demands of running your business.

Questions which, by the time you recognize they should have been asked and addressed, rob you of valued financial capital and time.

“What made you decide to start this line of work?”

“Are you still doing it for the same reasons?”

“What has to happen over the next three years for you to feel professionally fulfilled and successful?”

“When was the last time you took off a couple of weeks, or even a month, from your work?”

“If you don’t have the support in place to take a month off or more, what do you think would happen to your business if you become unable to work for an extended period of time due to illness, injury, or premature death?”

These kinds of essential business questions don’t stop there. For many business owners, there are succession concerns that can implicate partners, family, and employees.

“How do you plan on getting out of this business alive?”

“Are your children working for you? If so, do they expect to own the business someday?”

“Can you identify key employees in your company?”

“Do they know they are your key employees?”

Some business owners have shareholder involvements.

“Have you reviewed your shareholder agreement to make sure those integral to your business aren’t robbed of ownership positions, like your children?”

“How might this impact partners and co-shareholders you might have?”

“Does your shareholders agreement address liquidity needs that may occur during their lives—college education funding, unanticipated expensive medical care, helping a child with a home down payment or a grandchild with their education?”

“Can these needs create the unintended consequences of diminished business focus, or loss of a key shareholder?”

There’s also the challenge of managing relationships with varied business advisors.

“Do you have a collaborative team of advisors—an accountant, a tax expert, a lawyer, an operations pro?
“How do you coordinate communication among them all?

“Do you have one core advisor facilitating such communication? Or do you find yourself spending your business time interpreting the work of each one of your advisors for everyone else?”

“How’s that working for you?”

If any of these questions hit a nerve, I want you to know that I see you and the challenges you’re facing. That’s why I’m passionate about asking great questions that grab your attention and give you pause. Questions that inspire the right answers for your family, your business, your wealth, and your legacy.

If you’d like to start a conversation filled with great questions, I can be reached at Tom@NoteAdvisor.com.

Self-employed and Deferred Payroll Taxes

Shawn Glogowski on September 18, 2020

If you are self-employed, you shouldn’t count on the payroll tax break the president has issued via executive order — at least not yet.

Payroll taxes are normally shared by employers and employees. Each covers a 6.2% tax to fund Social Security, as well as a 1.45% tax to fund Medicare.Self-employed people foot the entire bill for these levies themselves, at a cost of 15.3%, and pay for them as part of their quarterly estimated taxes

The president’s executive order would suspend the employee’s share of payroll taxes from September 1st through the end of the year. It would cover workers who make no more than $4,000 per biweekly pay period or $104,000 annually.

It is currently unclear whether this relief would apply to the self-employed, which is raising a number of tax concerns including whether employers or employees could face surprise tax consequences and compliance issues related to the executive order.

Separately, business owners, including independent contractors and freelancers, are already eligible to defer the employer’s side of the Social Security tax via the CARES Act. Under this provision, employers may choose to defer the share of tax that would have been paid from March 27 through Dec. 31. They would then pay 50% of the amount owed next year and the remainder in 2022.

With so many unanswered questions, the best course of action if you are self-employed is to continue to set aside your self-employment taxes and pay them as usual. At the very least, you should wait until further guidance is issued by the Treasury Department to decern on whether you qualify to defer this slice of the tax.

If you have questions, or need to talk about this or any other financial issues, give us a call. We’re to help

Women and Investing: Life Lessons to Learn

Angela Hall on September 1, 2020

There are many statistics about the gender pay gap worldwide. For example, in the United States, women still only earn 82 cents to a man’s dollar. It is also well acknowledged that women, on average, outlive men. So, the importance of women saving and investing to help make up for this deficit is obvious.

The thing is, according to a study conducted in the late 90s by Brad M. Barber and Terrance Odean, while women have many traits that would make them good investors, they are far less confident than men in their investing ability. In fact, data from several studies over the years show that even when women have investment accounts, they hold the majority of their money in more conservative holdings like bonds and cash.

The question becomes, how to get women not only to invest, but to invest more aggressively when appropriate. The following five tips can help.

1. Begin With an Emergency Fund

The first step to financial security is having enough cash in a savings account to cover at least three-to-six months’ worth of unexpected expenses. This fund will not only help you in case of an emergency, but can also give you the confidence to start investing and help weather a market downturn.

2. Look to retirement

Whether you’re in your 20s or your 40s, you can’t afford to wait to start saving for retirement. And even though women are known to put others’ needs first, when it comes to retirement, you have to think of yourself. Take full advantage of a company retirement plan like a 401(k). In fact, this is a great way to begin investing. Contribute at least up to the company match, more if possible. Don’t have a company plan? Consider an IRA. The point is to save as much as you can as soon as you can. Living to 90-plus is becoming more common. You need to be prepared.

3. Invest in stocks

Your first thought may be that you don’t want to take the risk. Market downturns definitely happen as we’ve recently seen, but being too cautious can also put you at a disadvantage. Stocks are an important part of any portfolio because of their long term potential for growth and higher potential returns versus other investments like cash or bonds.

As evidence, consider this statistic: a dollar kept in cash investments from from 1926 to 2019, would only be worth $22 today. That same dollar invested in small-cap stocks over those 93 year would be worth $25,688 today.1

So where to begin? Many broad-based mutual funds and exchange-traded funds make it easy to invest in a cross-section of stocks. An index fund or target-date fund can make it even easier. Using a robo advisor can also be a good way to begin. You don’t have to know a lot to start; you just need to know where to start.

4. Plan for Other Financial Goals

What are your other goals—a down payment on a home, a child’s education or a vacation? Investing a portion of your savings in stocks may help you reach those goals faster, with the caveat that money you think you’ll need in three to five years should be in less risky investments. Stock investing should ideally be long-term, understanding how much risk you can stomach, and how much risk you can afford to take.

5. Ask for Help and Advice

When you have questions, ask your benefits administrator, your broker, even a knowledgeable friend or family member—but ask. There are also lots of online investing resources to explore. Need more? Consider working with a financial advisor.

A financial advisor is sort of like a personal trainer, someone to guide you and keep you going when you might otherwise be tempted to call it quits. He or she should understand your feelings, situation, and goals. Never hesitate to ask questions, including how your advisor is paid.

No time like the present

Time is a crucial factor in investing. If you have many years ahead of you to invest—and you commit to keeping your money invested—time will likely help you weather the inevitable market ups and downs. That’s not to say you can’t start investing later in life, but keep in mind that money you’ll need in the short-term should not be in the stock market.

That said, women need to develop the knowledge base and confidence to make the most of their hard-earned savings and build financial independence through investing. It doesn’t take a lot of money; it just takes getting started. Contact Angela Hall, CFP, if you’re ready!

[1] Source: Schwab Center for Financial Research. The data points above illustrate the growth in value of $1.00 invested in various financial instruments on 12/31/1925 through 12/31/2019. Results assume reinvestment of dividends and capital gains; and no taxes or transaction costs. Source for return information: Morningstar, Inc. Based on the copyrighted works of Ibbotson and Sinquefield. All rights reserved. Used with permission. The indices representing each asset class are CRSP 6-8 Index (small-cap stocks) through 1978, Russell 2000 thereafter; and Ibbotson U.S. 30-day Treasury bills (cash investments). Past performance is no guarantee of future results.

Parts of this blog were excerpted from an online article by Carrie Schwab-Pomerantz,CFP®, Board Chair and President, Charles Schwab Foundation; Senior Vice President, Schwab Community Services, Charles Schwab & Co., Inc.; Board Chair, Schwab Charitable

Retirement: To Do It or Not? And When?

Shawn Glogowski on August 26, 2020

Retirement. A time in life to which we all look forward. However, According to the Bureau of Labor Statistics, in 2016, 26.8% of those between the ages of 65-75 continued to work—a number that is expected to rise to 30.6% by 2026.

There are varying reasons Americans are postponing retirement, from economic stability to personal fulfillment. Whatever the reason, and however long you might plan to remain working, there are retirement-related financial concerns that should be addressed in your sixties to ease your eventual retirement transition and avoid potential snags down the road.

Wait to File for Social Security

Just because you reach “full retirement age”(FRA)doesn’t mean you have to collect Social Security benefits, especially if you’re still working. The longer you wait, the more your benefits will increase—up to age 70.

Monthly benefits increase between six and seven percent for every year you delay from age 62 to your FRA, and then grow eight percent a year between your FRA and age 70. If you are healthy and longevity runs in your family, you stand a good chance of increasing your lifetime benefit by postponing your start date.

Enroll in Medicare Part A

If you’ve already filed for Social Security, you’ll be automatically enrolled in Medicare Part A and Part B at age 65. But if you haven’t, you have a choice to make.

Most people will benefit by enrolling in Medicare Part A at age 65 whether or not they continue to work. There are no premiums, and enrolling now will help you avoid potential penalties or delays down the road.

If you’re covered by your employer’s plan and your company has 20 or more employees, that plan will remain your primary coverage. If you work for a company with fewer than 20 employees, Medicare will be your primary insurer.

*Another caveat: Once you enroll in any portion of Medicare, you can no longer c*ontribute to a Health Savings Account. So if you’re relying on your HSA to boost your savings, you’ll need to postpone Medicare.

Consider Postponing Medicare Parts B and D

If you work for a company with fewer than 20 employees, you’re probably best off enrolling in Medicare Part B and Part D when you turn 65. But if you work for a larger company, you may well be better off sticking with your employer plan and enrolling in Medicare once you retire. This link to a Medicare.gov website provides information on costs and coverage that may help you make a decision.

Once you leave your job, you will generally have eight months to enroll in Part B or face a penalty. Part D also has a late enrollment penalty if you go more than 63 days without “creditable” prescription drug coverage. Creditable means that your existing insurance is expected to pay as much as the standard Medicare prescription drug coverage.

Continue to Save for Retirement

No one should ever walk away from an employer’s 401(k) match, but it makes sense to try and save more. The good news is that as long as you are working, you can continue to contribute the legal maximum ($26,000 in 2020) to your 401(k) regardless of age. If you anticipate being in a high tax bracket come retirement, you might want to consider a Roth 401(k), if available.

You can also contribute up to $7,000 to either a traditional or Roth IRA as long as you have earned income, although in 2020 Roth IRAs are restricted to those who earn less than $206,000 (combined income for a married couple filing a joint return) or $139,000 (single).

Note that the 2019 SECURE Act extended the age limit for contributing to a traditional IRA from age 70½ to 72.

Don’t Forget About Required Minimum Distributions

The CARES Act passed in March of 2020 has temporarily suspended all required minimum distributions (RMDs) for 2020, regardless of age. This includes 401(k)s and traditional IRAs.

Starting in 2021 when the CARES Act expires, we will revert back to the RMD rules established by the 2019 SECURE Act. If you did not turn 70 ½ by 2020, you can wait until the year in which you turn 72 to start taking your required distributions.

Also note that earning a paycheck means you can delay taking a required minimum distribution (RMD) from your 401(k). As long as you are working (and you don’t own more than 5% of the company), that requirement is waived until April 1 of the year you retire. There are also no RMDs for Roth IRAs at any age.

Think About Your Mortgage

Conventional wisdom says we should pay off our mortgages before we retire, but it’s important to look at your mortgage in the context of your complete financial profile. Before you rush to pay off your mortgage, especially if that involves selling securities or will reduce your liquidity, you should consult with your financial advisor.

Plan How to Turn Your Portfolio into Your Paycheck

Switching from saving to spending and depleting what you’ve worked so hard to build can be a difficult transition. Before you stop working:

Review your net worth statement to understand exactly where your stand.
Make a retirement budget and stash away a minimum of a year’s worth of cash.
Review your portfolio to make sure you have the appropriate balance of risk and safety.
Consult with your financial advisor to create a tax-efficient drawdown strategy.

It’s great to choose to work for as long as it’s financially and personally rewarding, but planning carefully for the eventual transition to retirement can make the next phase of life even more fulfilling.

This blog was excerpted from an online article by Carrie Schwab-Pomerantz, CFP®, Board Chair and President, Charles Schwab Foundation; Senior Vice President, Schwab Community Services, Charles Schwab & Co., Inc.; Board Chair, Schwab Charitable

Ensuring Your Family’s Financial Future

Shawn Glogowski on July 14, 2020

In meeting with and advising our clients, one of their most important concerns is focused on ensuring their family’s future. Within that conversation often comes the question of the best way to leave money to their grandchildren.

In many ways, leaving an IRA can be a good alternative. The money continues to grow tax-deferred and when the grandchildren do inherit it, they’ll have options about when and how to withdraw the money. However, it’s not quite as simple as just naming them as the beneficiaries.

First, the distribution rules can be complicated and each beneficiary may have different needs on when it would be best to distribute the assets most effectively.
Second there is the consideration of what happens should grandchildren inherit the money while minors.
Third, it’s important to consider how the distributions will be taxed. Below are some points to keep in mind ere are some things to address in advance.

MINORS CAN’T INHERIT AN IRA OUTRIGHT

The age of majority generally ranges from 18 to 21, depending on the state of residence. So it would be wise to consider establishing a custodian, typically the minor’s legal guardian, for young grandchildren. The custodian would manage the money until the child reached his or her state’s recognized age of adulthood. At that time, the child would have complete access to the funds.

If you don’t designate a custodian, the child’s parent would have to ask the Probate Court to assign a property guardian. To avoid this complication, it would be best to name a custodian (often a parent) as part of your beneficiary designation.

CONSIDER SETTING UP A TRUST

This requires a bit more expense and time (you will need to work with an estate planning attorney), but it will give you more control over how and when the money can be used. For instance, while you might be thinking the inheritance would be used for education or a down payment on a house, a young beneficiary might be more tempted to buy a fancy car.

The choice of a trust depends on how much money you’re talking about and how concerned you are about your grandchildren handling their inheritance responsibly.

GRANDCHILDREN GENERALLY WON’T BE SUBJECT TO RMDs,BUT THEY WILL HAVE TO DISTRIBUTE THE ASSETS WITHIN TEN YEARS.

Prior to the passage of the SECURE Act, which became effective as of January 1, 2020, most heirs were able to distribute Inherited IRA assets over the course of their lifetime—with the caveat that they had to take RMDs. However, under the new law, only certain types of beneficiaries have this option, and grandchildren are not one of them (unless they are disabled or chronically ill.)

Grandchildren generally fall under the category of ‘Designated Beneficiary,’ which means that they can distribute the assets however they like, without RMDs each year—as long as all assets are distributed within 10 years.

In other words, your grandchildren can take some assets out each year or just leave all the assets in the account until the last day. However, any assets that are not distributed by the end of the 10th year will be subject to a 50% penalty.

How the assets are distributed within that time frame could have important tax considerations, so it’s best to consult with a financial advisor. Because of the SECURE Act rules, if you are married, in some cases it may make more sense to name your spouse as the designated beneficiary to take advantage of spreading the distribution over his or her lifetime and then they can name your grandchildren as beneficiaries.

UNLESS YOUR IRA IS A ROTH, THE GRANDKIDS WILL MOST LIKELY HAVE TO PAY INCOME TAXES ON DISTRIBUTIONS.

Distributions from earnings and deductible contributions from a traditional IRA are considered ordinary income, so unless you’re passing on a Roth IRA that was established for at least 5 years or more prior to your passing, taxes will be due on distributions.

If the Roth five-year holding period has not passed, the earnings are taxed at ordinary income rates. Your grandchildren will have to pay income taxes on distributions at their own tax rate or they can wait until the five years holding period has passed to receive tax-free distributions.

THREE PRACTICAL CONSIDERATIONS

1. It’s best that your grandchildren (or their custodians) understand that they will not be able to make additional contributions to an inherited IRA (however, if they have earned income, their parents can set up custodial IRAs for them).

2.It is important for everyone to understand that your grandchildren would not be subject to the 10% early withdrawal penalty, regardless of their age when they take a distribution.

3.The inheritance may have an impact on student financial aid considerations for your grandchildren. Consider all of these issues into your overall plan.

Naming a grandchild as an IRA beneficiary can be a tax-smart way to pass on money—both for you and for your grandkids. You just want to make sure that you set it up to everyone’s best advantage now, so it can truly be an advantage to the kids later on.

Want to know more? Give us a call at 716-256-1682, or email info@noteadvisor.com and let’s make an appointment to help you ensure your family’s future.

This article was excerpted from an online post written by Carrie Schawb Pomerantz, CFP®, Board Chair and President, Charles Schwab Foundation; Senior Vice President, Schwab Community Services, Charles Schwab & Co., Inc.; Board Chair, Schwab Charitable.

Good Business Fundamentals in any Economy

Shawn Glogowski on June 30, 2020

Over the last three months at Note, we have been engaged in virtual meetings with clients, working on ways to sustain their businesses in these trying, pandemic times.

Although a crystal ball might seem like the most needed tool in our advisor’s arsenal right now, here are some “good business” fundamentals we regularly share with clients that are important in any economy.

Hire the Best CPA, Attorney and Financial Advisor you can afford. Anything less can often become a big expense. Along the same lines, free advice often proves to be the most expensive.
Accumulate cash for opportunities and challenges. Keep in mind that other’s challenges may become your business opportunity.
Define the Core Values of your business and communicate them to all involved. Make sure to deliver customer service that clearly supports those values
Examine how to WOW your customer in a way that Amazon-at-your-door cannot.
Invest in the best employees you can attract.
Empower your employees to make decisions. Give them a budget for fixing mistakes and providing the highest level of service in their customer interactions.
Ask someone brutally honest and unfamiliar with your business or services to act as a customer and then grade their experience.

If you have questions or concerns about your business or need to discuss COVID-19 financial issues, we are here to help. Please contact Sarah Neuner at sarah@noteadvisor.com or (716) 256-1682 to make an appointment to meet in our office, via phone or virtually, online.

Easy Ways to Safeguard You and Your Money

Shawn Glogowski on May 29, 2020

Have you ever noticed an unauthorized withdrawal from your bank, brokerage, or credit card account? Such suspicious activity can mean only one thing: Your finances have been invaded.

If this has happened to you, know you are not alone. According to a November, 2019 Nilson Report, “Credit card fraud losses in 2018 reached $27.85 billion.

The good news is that if you find yourself the target of financial fraud, there are steps you can take to limit losses and help prevent unauthorized activity from happening again.

1. Act fast

It’s in everyone’s interest to identify suspicious activity as soon as it surfaces. Your financial institution can freeze the compromised account, issue a new card, reset a password, and perhaps even help track down those responsible. Be sure to initiate contact through a known number or website; never respond to an unsolicited email, phone call, or text—no matter how legitimate it may seem.
Financial institutions generally have security policies that outline how they handle fraud—including your liability, if any, in the event of unauthorized activity.
Viruses and malware are commonly tied to fraud schemes. Indeed, if a virus is left unchecked it can capture your new username and password, even if it was changed after the initial breach.

2. Go wide

Whenever you spot fraud in one account, change the credentials on any other accounts with the same usernames and/or passwords. Better yet, assign a unique password to each financial account, as well as every site where you store bank account or credit card information.
Of course, it can be difficult to keep all those passwords straight. Password managers, such as Dashlane and LastPass, can generate a unique password for every account, keep track of them all, and even securely auto-populate username and password fields.

3. Stay Alert

In addition to fraud alerts, many credit card issuers can notify you when they process online or over-the-phone transactions that don’t require a physical card. In 2018, such transactions accounted for 54% of all fraudulent activity worldwide involving credit, debit, and prepaid cards. Bank and brokerage accounts also offer alerts and notifications for certain types of transactions.
Regularly review your statements and credit report to ensure no fraudulent activity flies under the radar. Each of the three major credit reporting agencies (Equifax, Experian, and TransUnion) is required to provide one free credit report annually, so consider requesting a report from one of the agencies every four months.
Placing a security freeze with Experian, TransUnion, or Equifax can prevent others from opening a new credit card or loan in your name. Better yet, place a freeze with all three agencies to ensure maximum protection. If you need to apply for credit in the future, you can temporarily lift the freeze using a password or PIN.

4. Double up

Activate two-factor authentication: This safeguard, now standard among financial firms, issues a single-use code via email or text that you need to enter along with your username and password to gain access to your account.
Enable biometric recognition: Biometrics let you unlock a device or log in to an account with your face, fingerprint, or voice. Unlike passwords, biometrics can’t be written down (or lost) and are much harder for criminals to replicate.

Go the extra mile

In addition to the above four steps, consider reporting your experience to TheFederal Trade Commission. The agency’s reporting process isn’t designed to resolve individual incidents or recover funds, but your report helps them track trends in fraud and better understand the methods criminals are using, which may help financial firms improve their defenses.

It’s also a good idea to file an Identity Theft Report at identitytheft.gov. This entitles you to extra protections, such as placing an extended fraud alert on your credit report and preventing companies from collecting debts that result from identity theft.

Summer Jobs and Tax Returns

Shawn Glogowski on May 26, 2020

If your child picks up a summer job, they may or may not be required to file a federal tax return and/or pay federal taxes. It all depends on the type of job and how much they earn. The charts below provide some simple guidelines.

These tables are for general informational purposes only. They address only federal filing requirements for earned income. Other federal filing requirements may apply; see IRS Publication 929 for more details. — THESE TABLES ARE FOR GENERAL INFORMATIONAL PURPOSES ONLY. THEY ADDRESS ONLY FEDERAL FILING REQUIREMENTS FOR EARNED INCOME. OTHER FEDERAL FILING REQUIREMENTS MAY APPLY; SEE IRS PUBLICATION 929 FOR MORE DETAILS.

Even if your child is not required to file a federal tax return, it’s wise to consult with your financial planner or tax advisor, as he or she may be due a tax refund. And be sure to include your child in that consultation and any filling that may result. It’s never too early to start young wage earners on the road to financial literarcy—-teaching them the significance of taxes and and the ramifications of not managing them correctly.

This blog was excerpted from a Charles Schwab Personal Finance and Planning online post.

Local Help for Local Businesses

Shawn Glogowski on May 16, 2020

According to the NYS Department of Labor, more than 1.6 million residents have filed for unemployment benefits since Gov Cuomo’s mid-March COVID-19 order for all non-essential retailers and businesses to close.

This reality has forced business owners to make tough decisions about a broad range of issues including employee and customer safety, changes in supply chains and remote technology capabilities—all the while working to keep their businesses operational and afloat.

While there is no self-help manual to guide business entrepreneurs through this crisis, a number of Western New Yorkers are turning to The Center for Entrepreneurial Leadership(CEL), part of the University at Buffalo School of Management, for support.

For more than 30 years, CEL has provided individualized and interactive education in entrepreneurship through a variety of programs aimed at unlocking leadership potential, creating jobs and invigorating the greater Western New York economy and community.

That longterm purpose led CEL to immediately begin creating virtual programs and support for their entrepreneurs in less than 48 hours following the Governor’s business shut down order. Programming includes weekly Zoom meetings and one-on-one consulting sessions on financials and other COVID-related challenges. As well there are weekly webinars pn a variety of topics such as human resources, operations and overall business strategies.

Note Advisors Principal, Shawn Glogowski, is a graduate of the CEL Program. He notes the immediate response and support offered by the organization as crucial during this pandemic.

“It’s good to see CEL react with such immediacy in helping the Buffalo business community stay the course and meet the many challenges we are all facing. The vital information on programs and next step actions they are providing definitely help to build confidence among business owners in that the decisions they are making in these uncertain times will help them survive and eventually reopen.”

Established in 1987, the Center for Entrepreneurial Leadership in the University at Buffalo School of Management provides participants with individualized and interactive education in entrepreneurship. More than 1,400 CEL alumni employ more than 23,000 Western New Yorkers, and their businesses are worth more than $2.3 billion to the local economy.

For more information on the variety of programs offered through the CEL, how these programs are providing support for local small to medium-sized businesses and how you can apply for a specific program, visit http://mgt.buffalo.edu/cel.

Some information in this post was excerpted from an online Business First article written by Tom Ulbrich, an executive in residence for entrepreneurship at the University at Buffalo School of Management, and president/CEO of Goodwill of WNY.

Help Your Finances and Soothe Your Mind

Shawn Glogowski on May 13, 2020

With May designated as Mental Health Month, it seems timely to focus on the important part finances play in our sense of well-being.

Below is information related to understanding the ways money management skills can affect people’s happiness, along with practical steps to stay financially and emotionally healthy.

THE EMOTIONAL SIDE OF MONEY

Do you ever feel overwhelmed by money worries? You’re not the only one.

According to a 2019 survey by CompareCards.com, seven in ten Americans admit that they’ve cried over something related to their finances. Additionally, age and gender aside, many acknowledge money as an emotional trigger.

In a 2018 Harris Poll, it was revealed that money was a major source of stress for 44% of respondents. Specific financial stress inducers included low income, the rising cost of healthcare, too much debt and a lack of retirement savings.

These findings are troubling not only because of the significant percentage of Americans who are struggling with money concerns, but because of how those concerns can impact our lives.

FINANCIAL ANXIETY AFFECTS MORE THAN A SPREADSHEET BOTTOM LINE

A number of studies show that financial insecurity leads to a host of other problems from general stress and anxiety to poor physical health and reduced job performance.

Within the medical industry, worries about the cost of healthcare are being defined as, “financial toxicity,” as patients struggle to pay for health and hospital care and prescriptions. Worry about large medical bills and related debt have been proven to cause illness and even increase the amount of pain people feel.

When financial stress hits close to home, it can cause relationship problems among spouses, parents, children and even friends. Additionally children raised in poverty have been shown to suffer from far-reaching physical and mental health issues.

While these are concerning statistics, a 2015 Gallup poll regarding the link between relationship problems and financial well-being offered hope. According to those who participated, the solution to reducing stress and increasing financial security wasn’t as much about the amount of money individuals possessed, but more about how well they managed their money. The good news is that managing money is something everyone can control.

WHAT YOU CAN DO TO FEEL MORE FINACIALLY AND EMOTIONALLY SECURE

Worry is caused by uncertainty. While you can’t know what lies ahead, you can take steps to get a better handle on the present and more fully prepare yourself for the future. The following basic money management tips can help

Know where your money is going

Write down your monthly expenses. How much are you spending on essentials like housing, food and transportation? How much are you spending on extras? Make adjustments so that you don’t spend more than you earn.

Get a handle on debt

If you’re carrying credit card balances, create a payment plan that is realistic and that you can manage. Try to pay more on higher interest debt first, making sure to pay at least the minimum on all debts, including student loans.

Plan for emergencies

Aim to put aside enough cash to cover 3-6 months of essential expenses in a savings or money market account. Starting from scratch? Aim for whatever regular amount you can afford and work your way up from there. Acknowledge there may be months when your ability to reach that aim will fall short, but don’t give up. Next month get right back on your savings track.

Boost your savings

Make savings a part of your monthly budget. Even a small amount saved on a regular basis can make a big difference.

Contribute to your 401(k)

Contribute at least enough to get the company match, more if you can.

Take advantage of workplace financial wellness programs

See what your company offers in terms of retirement planning, healthcare, and financial education and planning.

MONEY MANAGEMENT AND HAPPINESS

There’s one more Gallup poll that offers particularly positive results. It found that among Americans worried about paying bills, 63% said they enjoyed saving more than spending.

Saving as much as you can, controlling your expenses, and feeling like you’re in control can reduce your financial stress and help you maintain a positive attitude no matter what life throws your way.