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  Money Talks, LLC 


511 SW 10th Ave., Suite 805

Portland, Oregon 97205



 Phone: 503-233-8142  Email: Susan@moneytalksllc.com  

Money Talks NewsletterNovember 2010 

In This Issue:


Low Inflation Lifestyle:

Financial Agility



Break the Cycle of Debt: 

You don't have to be in trouble to be out of control.


Susan Hammitt, AFC, CDFA

Susan Hammitt 



 Life Planning Specialist 



Happy Thanksgiving!


Thanks: An opportunity to celebrate that which we value and enjoy.


Giving: An opportunity to clean our closets and give surplus winter clothing to a rescue mission or social service organization. 


Prosperity is in the air,



Personal Financial Sustainability: 

Updating your financial plan provides opportunity to recalibrate your Valuable Life. Between now and January 1, 2011 take time to plan the allocation of personal and financial resources for the coming year.  Consider:


Time is important; time left in the workforce, time to save for retirement, time to adjust living situations, time to fund large expenses, time parents will remain independent, time children will leave home.


Age does matter; each attained decade offers new financial considerations.  Planning a decade may be more manageable, productive, and fun than planning the rest of your life.


Priorities are everything.  Weed your financial garden, eliminate expenses that aren't supporting the quality of life you wish for yourself.  Don't let decisions made in the past limit possibilities for new priorities going forward.


Use the Cash Flow Plan by Categories to plan annual income and expenses for 2011. 


Make a Plan that Works for You!


NOW through December 31st is open enrollment for Medicare plans.  If you, or anyone you know, are on Medicare take the time to review options. This year plan rates and benefits have gone through significant changes.  For more information go to:

Forward to a Friend 

InflationLow Inflation Lifestyle:

Financial Agility


Recent reports indicate that food costs are expected to increase in 2011.  Market demands for high protein and other food commodities are projected to raise prices  2 to 3 percent.  There are also signs that water/sewer and energy costs may be going up. Avoid knee jerk reaction.  Instead use casual discipline and adaptability; Financial Agility.   


Most households make adjustments on auto-pilot, unconsciously shifting away from personal financial plans.  When inflation distorts cash flow there are four options to consider:

1.       Shrink consumption of inflated items.

2.       Shrink other expenses.

3.       Increase income.

4.       Use Financial Agility and stay ahead of the curve.


The first two options are defensive reactions that may be disruptive and discouraging. The third option may not be realistic.

Remember: The best defense is a good offense.

Financial Agility is a series of small adjustments, beginning as soon as a trend is identified. The benefits are twofold; maintain balance in priority spending and reinforcement of adaptability.

While planning allocations for 2011 consider each expense based on how you believe inflation may affect the amount required to honor your priorities.

Knowing the cost of high protein foods is likely to rise next year; begin now, substituting a vegetarian meal once a week and experimenting with low cost alternatives.

We have been experiencing deflation, the cost goods has been very low. For instance clothing has been hugely discounted.  If, as a result consumption has increased; begin by setting higher standards of need and quality.  Now is the time to begin adjusting consumption of products that will creep up in price.

Rationing consumption of high inflation items protects against under-funding other priorities. It is not unusual for clients to feel that all money is being spent on essentials, limiting opportunities for fun. Financial Agility is pro-action; how much is needed to have fun? Is it possible to skew essential spending so it also supports fun?  I recall one young couple who enjoy high quality food and shared cooking experiences. Adjusting their shopping list to provide essentials and a few delicacies for  'date night' was a great lesson in Financial Agility. It relieved quilt for slightly inflated food spending and provided fun in their non-discretionary cash flow plan; supporting a valuable life.

I have personally experienced several cycles of inflation in gasoline prices. When gasoline prices go up five dollars for a fill up (from $40 to $45) I try to stretch refueling from 7 to 10 days. Interestingly, my lifestyle has always remained pretty consistent with a few pleasant additions.  I share driving to social activities with friends, take a bus once a week, and only do grocery shopping when I really need supplies. Most recently it turned out I really only needed two fill ups a month.  The value added; a boost in confidence regarding public transportation, decreased grocery spending, and fortified relationships with friends.

That's Financial Agility!


Make a Plan for Personal Financial

Confidence, Competence, and Prosperity!


DebtBreak the Cycle of Debt

You Don't Have To Be In Trouble To Be Out Of Control



Regardless the amount of household income, paying down debt and saving are often considered either/or choices in financial plans. Anxiety about paying off debt creates blinders that prohibit funding reserves.  However, the exclusive focus on debt reduction does not lay a solid foundation for more successful financial behavior.


The day the last credit card, car loan, or mortgage is paid in full it's important to have reserves in order to achieve Personal Financial Sustainability.  Without reserves to fund unanticipated cash flow requirements and small emergencies; the first use of credit to cover expenses is the next step in the debt cycle.


Reserves provide an opportunity to experience financial wellbeing and preserve thoughtfully constructed cash flow plans. Every time reserves are available to avoid going into debt, is a time for celebration!


Here is the plan that I recommend to break the cycle of debt.


  1. Plan debt payments rounding up to the nearest consistently manageable amount.  Example: A house payment of $1,525 becomes $1,600; a minimum credit card payment of $123 becomes $150 or $200 a month.
  2. Determine how much you require in reserves. Reserves are funds specifically targeted to cover shortfalls in cash flow. There are many 'rules of thumb' for reserves.  A specific dollar amount works best.  Consider job security, annual expenses (insurance, taxes), and exposure to home and car repair.  The best dollar amount is the one you believe is realistic.
  3. Set a regular contribution amount and arrange to have systematic payments transferred to a reserve account automatically.
  4. Once reserve levels are attained continue to contribute. Every 90 days determine how best to allocate the overages; increase retirement savings, pay down some debt, or complete a project.
  5. Resist the temptation to rely on windfalls. Break the pattern of using windfalls, such as tax refunds, gifts, and bonuses to pay off debt. Instead, when windfalls are received consider (1) funding reserves, (2) saving for long-term sustainability, and (3) pay down of debt. 

Getting out of debt is a financial goal.  Staying out of debt and achieving Personal Financial Sustainability is a financial plan. 


Make a Plan and Take Control