Micro-Philanthropy: Make a Big Impact with Small Change

Have you ever wanted to help someone or some cause and felt powerless to help? When you write a small check to a big organization do you wonder where the money goes? Several organizations are now using the web to reach out and ask for small donations from people around the globe. For every contribution received, the donor receives in return confirmation of how the money was spent. Donors come away with a deep sense of satisfaction that the money was put to good use and the receivers get the opportunity to prove how well the money was spent, and perhaps ask a little more.

Websites available to make targeted donations include:

Givemeaning.com lists specific projects and causes that need support around the globe. Receipts for tax-deductible contributions are available on a case by case basis. There are no administrative or credit card processing fees to reduce the contribution. You can also start your own fundraising initiative to get your own cause out there.

At Kiva.org you can make an interest-free loan to entrepreneurs in poor countries. When the loan is repaid you can lend it out again, putting the same $25 or $50 to use over and over again. Kiva works with microfinance institutions that are local and accessible to the poor entrepreneurs, mostly women.

If helping out schools is close to your heart check out DonorsChoose.org. This site enables teachers to ask for funds for specific purposes such as DVDs or chairs for the students. You can locate classrooms in need by state or topic. You can even purchase gift cards for friends and family to donate to a charity that is meaningful to them.

These sites all offer a big bang for your contribution buck. You get to learn about the person or class in need, make an affordable contribution and know you have made a significant difference in that person's life. Word of caution: watch out for sites that charge high credit card and administrative fees for processing your contribution.

Merging Your Money

Merging finances with another person can sometimes take the relationship down a treacherous path. Whether the two people are involved romantically or in a business relationship, sharing a financial goal implies that both parties' interests will be met. This goal is much easier said than done. A lot of stress and sometimes legal trouble can be avoided by taking time in the beginning of the relationship to clarify the common goals and the responsibilities of those involved to build a strategy that satisfies everyone.

The Roommate Example

Most people start out with roommates whether it's sharing a room as a child, sharing a dorm room in college or sharing your pad with friends after graduation. Having roommates are a great way to share living expenses, stay social and sharpen your debate skills (i.e., "no, I bought the last package of toilet paper"). In this case, money is really about money and the fastest way to stop fighting is to track the household expenses and how much each person contributes. If the concept of budgeting makes you want to curl into a ball just focus on the household expenses like utilities, cable, internet access, and supplies for the kitchen and bathrooms. Break it down into a monthly total, determine how much each one will contribute (determined in equal portions or by amount of use) and on what day of the month each person will cough up their share. Then schedule a monthly get-together to go over last month's expenses and contributions just to keep everyone current. Introduce a bottle of wine and your roommates will back out less often.

The Relationship Example

Money is an emotional topic. Money and relationships cut to the quick of our feelings of security and control. Mix them together, throw in a little stress and you may have an explosive combination on your hands. Since no one is totally rational about money and relationships woes tend to build on money woes it is critical to be honest with yourself about how much financial compromise you are up for. Some couples share everything from the get-go while some couples are married for 30 years and still don't know what is in each other's accounts. You may want to know what the other person has going on but are you willing to share your own secrets? Being honest about your own financial expectations will help you be reasonable about expectations for your partner.

One strategy that gives couples a lot of flexibility is the mine-ours-mine approach: each person has their own checking and savings account and one joint checking account. The joint checking account is used to pay household expenses (see above) and addresses the "roommates" part of the relationship. If there is an interest in sharing travel costs or other near-term goals, a dual savings account can be created for this purpose. I highly recommend against joint credit cards if there is any history of identity theft or money troubles in either person's past. Keep credit accounts separate until you have household finances down to a science and your bills are all paid on time to avoid any future credit score trouble.

The Business Relationship

Business relationships thrive on documented goals and procedures. If a personal relationship goes sour it's highly unlikely an old partner will sue you for their share of last week's groceries. However business relationships tend to have higher stakes and more legal paperwork to establish financial expectations. For example, if you are considering purchasing an investment property with a friend, take care to document everything spent in the process of purchasing and improving the property. These documents are also necessary to determine any tax breaks you may be eligible for. Roommate and personal relationships thrive on an emotional bond between the parties that helps them resolve technical financial matters. In a business relationship there is no emotional safety net for the relationship, and if a business partner pulls out, you could be on the hook for a lot more than a cable bill.

When you merge finances remember to: 1) track where the money is going and 2) document each person's responsibilities to making the arrangement work. Take these steps and there will be less stress and more transparency in the relationship

A New Era

Well before the election I was on my way to work one morning and passed a group of Obama supporters waving signs, smiling and waving at drivers. They weren't demanding anything or asking for time, just smiling and waving. As someone who always keeps an eye out for vague messages and hidden sales pitches, I was looking for the catch. Instead as I glided past them I took a bit of their hope with me. And I'm grateful for it.

I recently wrote about starting your own domino effect. One person affects another, they affect three more and before you know it there is a movement spilling into the world. The movement of hope and change has brought us to this new era today. Take the hint. Start your own new era. Make one real change that you can commit to and live by.

For example, my new era started three months ago. One evening after tossing two week's worth of leftovers into the trash I decided that I would not throw out any more food. A simple thing really, but it has changed the way I shop, cook and eat. Now when I hit the grocery store I only buy things I know will be eaten soon. I've cut my grocery bills by 25% and don't feel the change since I'm cutting out the food I was throwing away. The extra money is going into a travel fund. My 2009 Roth IRA contribution is calling but you have to live a little.

No more lurking tupperware glaring at me from the back of the fridge. No more cooking and storing food that will mock me from the bottom of the trash. Want an instant fan club? If you enjoy cooking make your friends an offer they can't refuse and offer to cook if they buy the groceries. You will have an instant following that is well-fed and singing your praises. You get free meals and they get real nutrition instead of cereal for dinner. It's a win-win-win for everyone.

Find Your Solid Ground

As busy professionals it's hard to find time to focus on anything, let alone topics that require a lot of courage to approach. Money management tends to be a scarier topic to explore as most people feel a combination of shame and failure when they think of their personal finances.

For this reason Solid Ground Financial Planning has created the Solid Ground Program - a four-part seminar series to educate and build financial confidence in key personal finance areas. Holding the seminars at the workplace makes it convenient. Keeping the program low-cost for young people in entry-level positions makes it affordable. Employers can sponsor the program themselves, share the cost with employees or the employees can pay individually to attend the program.

The first seminar is an overview of debt management, saving and investing strategies. The next three seminars are workshops that explore each concept in depth and help participants develop personal financial plans.

By the end of the program each participant will know exactly which debts to pay first, how much money they can reasonably save every month and which investments belong in their retirement accounts.

If you would like to bring this program to your workplace please contact Rebecca Schreiber at Solid Ground Financial Planning at (202) 297-1321 and rebecca@solidgroundfp.com. Solid Ground will work with your Human Resources or Professional Development department to bring the program to your workplace.

We All Live Downstream

I recently found myself at a local nature center and noticed a poster on the wall describing the effects of water pollution. The poster featured a fish mowing his lawn underwater warning of pesticides that end up in the water supply. The title was "We All Live Downstream" and it got me thinking about the different types of financial "runoff" we're exposed to and how we effect each other's financial well-being.


In the U.S., no one exists in a bubble. With 24-hour news on your radio, tv and PDA there's no getting away from the financial decisions we see others make. This exposure creates a domino effect on how we manage our own money. If enough dominos fall we get a boom or a bust. The most recent domino effect was the spending of emergency funds. First individuals did it, then banks did it, now the Federal Reserve is doing it. Consumers stopped saving for several years, then banks lent out everything they had to pocket the fees and now the billion-dollar bailouts will keep the country from saving anything for several years to come.


What can you do about it? Once you recognize where the financial influences are coming from in your life you can affect them. The dominos headed your way may be friends, family, your work environment or your own bad habits. Are you happy to stay and watch Netflix when your friends want to go out to dinner and a movie? Do you enjoy simpler vacations than the rest of your family? Are you feeling dragged out to shopping you don't really enjoy? Many people spend any extra money they have because they don't know what else to do with it. Offer some suggestions - maybe a simple dinner at your house. Get takeout. Maybe a pizza. Whatever it is, start your own domino effect. Your friends may all be better for it.

Babyproofing Your Finances

This morning I was a guest on Your Turn With Mike Causey, a regular show on Federal News Radio. We discussed how to navigate life events and still keep your head above water. This is particularly helpful for new parents who have introduced into their lives not only a bundle of joy but a bundle of expenses and tough choices as well. Whether you are welcoming child #1 or child #4 into your family, here are some tips to help you keep your bearings:

1. Once the baby is born you have 30 days to change work-related benefits that you normally only get to change during open season. The birth is considered a "qualifying life event" that triggers the 30-window for benefits changes. Take the opportunity to adjust your health insurance, medical and dependent care Flexible Savings Accounts for the new baby-related expenses. If you miss this window you will have to wait until open season again to start saving taxes.

2. Automate your savings and bill-pay. Over the next several months you'll be surviving on precious little sleep. If you're lucky you'll remember the last time the baby ate, napped, or even the names of your other children. Chances are that a student loan, credit card or car payment will slip through the cracks. If it does your credit score will suffer and the late payment will haunt your credit report for 7 years. Before the birth spend 30 minutes online and set up your payees and automatic payments. Your credit score will thank you.

3. As soon as the baby is born submit a new W-4. This form, available through your HR department, allows you to increase your take-home pay by increasing your withholding. The idea behind withholding is for your employer to withhold from your paycheck the amount you expect to owe in taxes that year. Since the IRS gives you a tax break on every dependent you will owe less taxes. Thus, increasing your withholding simply reduces the amount your employer needs to put away to pay your reduced tax bill. The W-4 is processed right away so by the time you're paying for diapers there's more money in your paycheck to cover it.

4. Be flexible to the idea that you may change your work plans once the baby is here. I have seen many clients expect to want to immediately go back to work or stay home altogether, then change their minds once the baby is born. Keep your options open. Wait a few years after the birth to purchase a home or upgrade to a larger home. It's tempting to get the home purchase "out of the way" before the kids come but it paints the family into a financial corner. And as many of us have learned the hard way, it's pretty expensive to get out of a home we can't afford.

Your family will last a lifetime. Make sure you cover your bases with a budget, an emergency fund, life insurance and retirement savings - then move on to home ownership. Be a professional now. Be a parent now. Be a homeowner when you know you can handle it.

If The Airlines Can Raise Cash, So Can You

Last week the Wall Street Journal reported that United Airlines and Delta were able to raise billions of dollars in cash. Guess where they found it - under millions of airline seat cushions. Well, not exactly. They simply upped their game and played some well-known airline tricks such as selling and leasing-back airplanes and launching frequent-flyer programs. No brain surgery, no rocket science. They were just holding out.

Now before you go raiding your friends' couches take a moment to let this sink in.
No doubt you also have have a few cost-cutting, cash-raising tricks up your sleeve that would come in real handy right now. 2009 is a fresh, new year. People are wise to the value of a dollar these days and think better of those who spend wisely. Now is an excellent time to adjust to a lifestyle that is more in tune with your goals.

Maybe you've got a few things you wouldn't mind selling or trading. Perhaps you've been meaning to start new healthy habits and need a little competition to get going.

Well, Delta's beating you by about a billion dollars.

But all is not lost. After all, how can one person compete with a whole airline? Level the playing field, find a friend and make a bet: whoever saves the most in three months buys dinner. And not a dinner that comes in a paper bag, either. A little competition goes a long way. After all, it made the airlines billions of dollars.