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Alan Prahl

Alan Prahl

Alan Prahl is the Education Leader with FISC, the Financial Information & Service Center. He has an undergraduate degree from the University of Wisconsin in Madison and law degree from Hamline University. A nonprofit program of Goodwill NCW, FISC provides financial counseling and coaching, including a no-cost, no obligation 30-minute consultation with the “counselor on call.” To learn more, call 920-886-1000 or visit

Monday, 01 October 2018 01:32

Why do people fear running out of money?

Many people are worried that they will run out of money in retirement. Do you share that concern?


For many people, Social Security is the primary source of income in retirement. Social Security was never intended to be the sole source of retirement income but was to supplement employer provided pensions and personal savings. People generally know their income will go down when they stop working and draw Social Security, but often don’t realize how much it will go down.

By visiting you can get estimates of your Social Security benefits based on your own earnings record. You can do “what ifs” comparing your benefits at age 62, 65 and older. Benefits are sharply reduced if we begin at age 62. While we don’t always have the option of waiting until full retirement age, benefits will increase about 8 percent more each year you wait beyond age 62 until you reach age 70.

People sometimes retire at age 62, thinking they can live reasonably well now. Retiring early might work now with today’s prices, but what about in the future? The long-term average rate of inflation is more than 3 percent and that reduces our buying power. If inflation is 3 percent, after ten years $10,000 will be worth $7,441 and after twenty years, $10,000 will be worth $5,537. While Social Security is indexed for inflation, the modest increases may not keep up with rising costs.

With today’s longer life expectancies, experts often say we should plan to live into our mid-nineties. Women especially should consider this, since more than one-third of women who are age 65 will live until age 90.

Fewer employers today offer pensions. Instead, many offer 401(k) plans, where employees save what they can from their paychecks and sometimes receive employer matching contributions. According to the Federal Reserve’s 2016 Survey of Consumer Finances, the median combined 401(k) and IRA balance was $135,000. That may seem like a lot of money, but many retirees find it difficult to make their modest savings last twenty or thirty years.

Medical expenses can deplete savings, especially if there is a chronic medical condition. Medical costs have increased more rapidly than the general rate of inflation. As we age, we tend to use more health care services. Depending upon the health insurance that is chosen, retirees may have to pay significant costs out of their own cash flow or savings.


Be prepared for medical expenses that Medicare does not cover. Medicare Supplement Plans can help cover expenses that are not covered by Medicare. To learn more about Medicare, visit or talk with your local Aging and Disability Resource Center (ADRC). For Calumet, Outagamie and Waupaca Counties, check out Some ADRCs offer helpful workshops like “The ABC’s and D’s of Medicare.”

Work with a financial advisor to identify your likely sources of income and steps you can take to try to build a reliable stream of income. You can also use financial calculators and websites like and to better understand your needs and situation. Look for ways to spend less and save more, including low cost and free community resources. United Way’s 2-1-1 Information and Referral Service can help identify local resources.

If available, participate in your employer’s 401(k) plan and save at least enough to get the free employer matching contributions. Don’t cash out your IRA or borrow from your 401(k) before you retire.

For inspiration on ways to live well on less, check out

It’s football season again. While we’d love to see the Packers win the Super Bowl, it will take a winning game plan, diligent practice and superlative effort for the Packers to succeed.

You know some of the key things the Packers need to do to win. Protect the franchise quarterback. Feature enough running to keep opposing teams honest. Connect on a high percentage of passes. Play ball control on offense so the defense can stay fresh.

We need a winning game plan to succeed with our finances too. Many obstacles can get in the way of financial success. Are you moving forward with a winning financial game plan?

Seven ways to build financial strength:

  1. Commit to spending less than your income.
  2. First spend money on needs. Limit lifestyle spending on wants, so you have a surplus of 10 percent to 20 percent of your income to save and invest. Use tools like automatic transfers from checking to savings or investments, so you save automatically for your goals.
  3. Always think about your choices. Is there another way to effectively meet your needs at a lower cost?
  4. Have an emergency fund with three to nine months of normal living expenses. Life throws curve balls. Be prepared.
  5. Don’t compare your car, home, clothes or toys with others who appear to have more than you do. Instead of comparing, believe that building financial independence is more important than conspicuous consumption.
  6. Assess your risks and carry appropriate insurance.
  7. Estimate how much you need to save for retirement and save out of every paycheck.

There’s probably been a time in most of our lives when we thought, “If only I made more money that would solve everything.” But, wishing we had more money doesn’t generate more income or suddenly enable us to live within our income. We must make some adjustments or changes so life can get better.

Heading into a game, good coaches will assess a team’s performance. They will make adjustments so their team can win. What adjustments could you make to improve your financial situation?

When you see Aaron Rodgers throw a perfect pass to a receiver just before he goes out of bounds, remember how many times they practiced that play. Great coaches make players practice plays repeatedly to develop their skills and habits. If we practice developing new financial behaviors, our wise choices can become habits that build financial strength.

Do you know what needs to be done to have a winning financial game plan? If you’re not sure, ask a financial professional to help you identify options to improve your situation. 

Wednesday, 01 August 2018 03:10

Share your best financial moves

Many people have learned valuable lessons about saving money, minimizing debt and making wise financial choices. Your short personal stories shared in an encouraging way can help people facing financial challenges to have hope and make positive changes.

I sometimes ask adults to share the best financial moves they have made. What would you suggest?

Here are some of their suggestions:

  • “I started saving for retirement when I was 20.” “I increased my 401(k) deferral from 1 percent to 6 percent when I was young.” There were a handful of people who made similar comments. Starting to save as early as possible is an outstanding principle and a great suggestion.
  • “I went to college in order to land a good paying job.” Attending college and getting a degree in a field that is in demand can still be an effective career path. There are also many opportunities in technical colleges and in the trades to learn skills that lead to a satisfying, well-paying career. Education after high school is important and it’s wise to explore all options.
  • Here’s a great suggestion about paying for college: “Don’t take out student loans until you have exhausted all other avenues for financing your education. Then only borrow what is needed.”
  • “The only clothes I buy at retail are underclothes! Resale shops and garage sales are fun ways to hunt for great finds!” One frugal person offered these creative insights. She also cautioned against overspending saying, “Just because something is a great price doesn’t make it a great deal for us if we don’t need it.”
  • Multiple people said, “Made a budget and used the envelope system.” Having a budget or plan for our spending is another proven principle. Many people use envelopes with a limited amount of cash as a visible reminder of how much they have chosen to spend in each category. Some people also use electronic tools like to keep track of their spending.
  • Many people said that tracking spending (writing down what we spend) really opened their eyes to how much they were spending and where their money was going. We do a lot of spending out of habit. Tracking makes us more aware of our spending.
  • “Making a plan with my husband for savings, retirement, budget and tithe” repeats the principle of having a budget and setting priorities according to your values. Other people had similar comments like “Save before spending” and “Always give to the Lord first.”
  • “Saving early for big things like a vacation, new vehicle and education.” If we try to save money after we have paid all the bills, we may not have enough money left to save. That’s why many people treat saving as a top priority.
  • “Don’t get a credit card in your twenties.” Several people had comments about not relying on credit cards, evaluating purchases carefully before buying and minimizing the use of credit.

If you know someone who could use some words of wisdom, gently share some of your best financial moves. You can help them avoid some pitfalls and make better choices. 

Do you wish you could save more money or had less debt? People often wish things could be better but fail to take action to make their dreams come true. Sometimes, we know how to make our lives better, but we don’t change our behavior. What stops us from making changes?

Spending influences

Experts say each of us receives between 600 and 3,000 advertising messages daily. Advertising is everywhere: billboards, TV, radio, newspapers, catalogs, emails, texts, gas station pumps, bathrooms, direct mail, shopping channels and more. These messages encourage impulsive and emotional spending. Compare the deluge of spending influences with the trickle of saving influences. It’s no contest. Spending influences dominate.

We are creatures of habit

Would you believe that forty percent of our spending is habitual? We often spend because it is a habit and don’t notice how much these habits add up.

In a 2015 survey by Sun Trust, people earning at least $75,000 were asked, “How are you doing with reaching your goals?” Thirty-three percent of people said, “A lack of financial discipline sometimes prevents me from reaching my goals.” Forty-four percent said, “Spending on lifestyle purchases causes me to save less than I should each month.”

We overestimate how much we make

Some people think, “If I’m grossing $75,000 per year, why can’t I afford to do more?” While rising prices and inflation can reduce our buying power, the bigger culprit may be the difference between gross and net income. With pre-tax deductions for 401(k) plans, child care, health savings accounts, the employee share of health insurance premiums, state and federal taxes, and Social Security, it’s no wonder that paychecks have shrunk. Making pre-tax payments is nice, but we need to be realistic about how much money is available to spend.

Countering strategies

To counter spending influences, minimize media and images that encourage spending rather than saving. Get rid of that pile of glossy catalogs next to your favorite chair. Delete “favorite” websites where you longingly browse and spend on lifestyle purchases. If shopping is a habit or a social activity, substitute other activities. Call a friend, take a pet for a walk, get in a workout or go out for coffee.

You can build new habits

We have all developed new habits. Remember learning how to drive? At first driving took a lot of very conscious thought. “I’ve got to slow down, check the right lane, signal my turn, etc.” But through practice and repetition, driving became routine.

To make positive financial changes, try talking with a nonprofit credit counselor or financial coach.


Thursday, 31 May 2018 01:15

How optimistic are you?

Are you optimistic about your health and wellness? How optimistic are you about life in general?

A recent article has surprising news about the optimism of millennials. According to, “For the first time, young Americans have less optimism than those aged 55 and older.” That’s a big change from past history. According to the article, this is the first time in the last six decades that Americans younger than 35 have scored so low.

What is Behind Millennial Misgivings?

One of the common challenges facing millennials is student loan debt. Nationally, the average 2017 college graduate had more than $37,000 in student loan debt.

Why so much? College costs have risen dramatically. For example, in-state tuition, fees, room, board and expenses are pegged at about $25,000 annually for UW-Madison. In-state tuition, fees, room and board at nearby UW-Oshkosh costs about $15,000.

According to the Pew Research Center, for the first time in more than 130 years, more millennials are living with their parents than with a spouse or partner in their own household. Why aren’t adults ages 18-34 moving out and buying a home? A 2018 online survey conducted by Harris Poll for the National Foundation for Credit Counseling (NFCC) indicates that 38 percent of adults who tried to purchase a home in the past year faced barriers to homeownership. The top five barriers:

  1. Rising home prices
  2. Lack of funding for down payment/closing costs
  3. Existing debt
  4. Limited housing options within budget
  5. Poor credit history/low credit score

A big part of the “existing debt” is student loan debt. Given these barriers, it’s not surprising that many young adults have postponed buying a home. Many millennials have also delayed getting married and having kids.

It’s Not All Doom and Gloom

While consumer confidence for young Americans is generally down, not all millennials are struggling. Some are living the dream, managing their finances well, paying off their student loans and building assets. According to the NFCC survey, 47 percent of millennials have a budget and keep close track of how much they spend.

Developing a budget or spending plan can help people get a clear picture of their financial situation and identify options to improve it. A spending plan gives us accurate information, so we can make wise choices, meet our needs, have money for some wants and attain our goals.

Money and Emotions are Connected

I teach workshops about money and sometimes ask people how it feels to find money on the street or in a pocket of their clothes. People will smile and say that finding money feels great. When asked how it feels to receive a large unexpected bill, they say things like frustrated, sad and discouraged.

The stress of dealing with student loans and barriers to home ownership can be frustrating and optimism can decline. If someone you know is experiencing stress about money, maybe it’s time for them to take charge of their money and develop a budget or spending plan. A good plan can help restore hope and optimism. 

As thousands of proud parents celebrate the graduation of their children, many graduates are looking forward to being on their own. Living independently is a significant change. Here are some tips for new graduates.

Have a spending plan

Without a budget or spending plan, it’s easy to spend everything you earn and then some! Identify your core expenses for necessities like rent, utilities, food, health care and car insurance. Then, determine what you can afford to spend on wants like entertainment and travel.

Count all housing costs. Don’t sign a lease until you know all the costs and know if it fits within your budget. How much does heat cost in the winter and air conditioning in the summer?

Many students have been covered under their parent’s auto and health insurance. In some situations, parents might continue that coverage, or it may be time for the graduate to pay for this. Don’t go without coverage. Factor these costs into your budget.

Calculate student loan payments into your budget before you consider upgrading your car or committing to other large expenses.

Live within your income

Don’t overspend on furnishings for your new apartment or on new clothes. Just because some of your friends may drive new cars or be living large doesn’t mean that they are doing well financially. Have fun, but live within your income.

Save money for a rainy day. Smart people save money for future unexpected expenses, like car repairs, health care and other unexpected expenses.

Always pay your bills on time. This helps to build a positive credit rating that can save you thousands of dollars on major purchases like a car or a home.

Begin saving for retirement immediately

Start saving in your employer’s 401(k) plan as soon as you are eligible. If you don’t have access to a 401(k), then save in your own traditional or Roth IRA. Even small amounts of money can add up to be a lot.

There is more to life than making money. Plan to have a life outside of work. Don’t let worries about money dominate your life. Take action to get organized and have a plan to make the most of your money.

Tuesday, 27 March 2018 03:21

How much should I save?

Did you ever wonder how much of your income you should save for retirement? Financial advisors may offer some general guidelines, although there are so many different recommendations that this can be confusing and discouraging.

For years many advisers suggested using an 80-10-10 ratio, living on 80 percent, saving 10 percent and donating 10 percent of income. However, college costs have risen dramatically and many employers dropped pensions in favor of employee savings plans like 401(k) plans. Other trends like longer life expectancies, rising medical costs and inflation have also affected advice on how much to save.

Today, depending upon whom you ask the rule-of-thumb advice might be to save 10 percent, 15 percent or “as much as you can” of your income for retirement. People often have other financial goals like building an emergency fund, saving for college and paying off debt. If you are determined to live frugally or have a large disposable income, you may be able to save 15 percent or more of your income for retirement and make progress on these other goals. However, before assuming that’s how much you should save, use an online calculator or work with a financial planner to estimate how much you need to save.

Financial planners would rather personalize their advice to fit your situation rather than use general rules of thumb. Individuals have different situations, including different incomes, assets, employer provided retirement benefits, Social Security benefits, needs and goals. Some people may not need to save 15 percent or more of their income. Depending upon your situation, your planner may suggest other smart financial moves like paying down high interest debt and building an emergency fund.

According to the St. Louis Federal Reserve Bank, the real median household income in Wisconsin was $59,817 in 2016. With a median income, if a 401(k) retirement savings plan is offered at work, employees may struggle to find the money to save. If people are paying the employee share of health insurance premiums, state and federal taxes and Social Security, saving 10 percent or 15 percent of pay can be very challenging.

If you can’t save what the planner or calculator suggests, explore options like beginning receiving Social Security at a later age, working part-time in retirement and gradually increasing your savings. Try bumping up your savings whenever you get a raise. The earlier you start saving for retirement the better off you will be.

There are good reasons why today’s general guidelines often recommend saving more than 10 percent of your income for retirement. But rather than using general guidelines, it’s wise to analyze your own situation and calculate how much you need to save.

Wednesday, 28 February 2018 15:36

What will you do with your tax refund?

Has your 2017 income tax refund arrived? The average Federal refund last year was about $3,050. A financial windfall like this offers many spending and planning opportunities. What will you do with your refund?

Don’t give in to the urge to splurge on the first thing that comes to mind. Try using a “Want List.” Put it on your refrigerator or favorite electronic device where you’ll see it often. As you think of things you want or need, add them to the list.

What do you often think about? Do you wish you had more money in savings? Would you feel better if you paid down debt?

Dream a little. What’s on your bucket list? Is there a vacation you have always wanted to take? Is there something you’ve always wanted for your home?

Build your list for at least a few weeks. Then sit down and sort through your ideas.

Here is an example of a possible strategy:

Emily and David have six items on their want list. They would like to add $800 to car repair savings, pay off their $800 Visa bill, pay off their $500 Kohl’s card balance, save $1,000 for a vacation, add $1,000 to their emergency savings and buy a new couch for $2,000. While they received a $3,300 refund, their want list includes $6,100 of ideas. So, they prioritize.

Many financial professionals would recommend paying off the Visa and Kohl’s bills ($1,300 total) to eliminate the high interest debt. They still have $2,000 left.

They will need new tires soon, so they decide to add $800 to their car repair savings. That leaves $1,200 of their refund to allocate.

It would be quick and easy to put the remaining $1,200 aside for a vacation, but nothing has been added to their emergency fund. They really want to do both, so they decide to split the remaining money.

They put $700 into their vacation savings fund, which is 70 percent of the way toward that $1,000 goal. Because they paid off their credit cards, instead of making monthly payments on those bills, they can put the money that was going toward credit card debt into their vacation fund and look forward to a nice vacation.

They put $500 into their emergency fund. To continue building their emergency savings, they set up an automatic monthly payment from their checking account to their emergency savings. They will continue to save automatically until they have at least three months of living expenses set aside for emergencies.

A combination of paying down debt, adding to their emergency savings fund each month and having a vacation to look forward to offers immediate financial strengthening, plus positive encouragement to stay on track financially. 

Wednesday, 31 January 2018 19:38

Caring couples communicate about money

In February we take a break from winter’s icy grip to celebrate Valentine’s Day. Some of the most popular gifts include cards, candy, flowers and an evening out. What do you like to receive? While most people agree it’s important to express love on Valentine’s Day, people sometimes disagree about what they like to receive.

Disagreements are common too when it comes to money. Couples often have different financial priorities and goals. Here are some simple strategies couples can use to communicate more effectively about money.

Set joint goals

Talk about what is coming up in your lives. For example, talk about planning a warm, sunny summer vacation. Also talk about your long-term goals like saving for college and when you want to retire. What will retirement look like? Where will you live? When do you want to retire? If you want to retire at a young age, you may need to save aggressively to make that happen.

Review your long-term goals before making large purchases, like buying a new car. The new car smell wears off, but the car payments usually last for years. The average cost of a new car today is more than $30,000, and payments of $500 and more a month are common. That’s $500 plus a month going toward a depreciating asset and not toward your retirement. Don’t hijack your long-term plans making a large impulsive purchase you’ll regret.

Don’t blame

Don’t blame one person for doing all the spending. Usually both people spend more than they realize.

Spending money

To minimize blaming, each partner should receive some personal spending money every payday that can be spent on anything. You have freedom to spend this money spontaneously without judgment.

Talk through disagreements

When you disagree, get it out in the open and talk about it. Patient communication and compromise can help you resolve disagreements and identify choices both people can live with.

Plan for the unexpected

Unexpected expenses and low savings can strain relationships. Work toward having at least three to six months of living expenses in an emergency savings account. To boost your savings, talk with your bank or credit union about setting up automatic monthly payments from your checking account to your emergency savings account.

If you don’t have a significant emergency fund, use your tax refund to jump-start your savings. You’ll sleep better knowing you are prepared for the proverbial rainy day.

Keep debt low

Many couples disagree about how much debt they are comfortable carrying. While an affordable home can be a good long-term investment, it’s seldom wise to carry credit card debt. If debt is a concern, work toward reducing it. Don’t take on more debt unless you both genuinely agree.

It’s about balance

Managing money wisely isn’t just about putting numbers on a spreadsheet. Often there isn’t enough money to buy everything we want and save aggressively for retirement. We must talk through our needs and wants and balance competing priorities.

Valentine’s Day is a great time to express love for others. It’s also timely to reflect on how we can make our relationship even better and communicate more effectively about money.

Friday, 29 December 2017 03:46

Use allowances to teach children about money

What do you want your children or grandchildren to know about money? Many parents have used allowances to teach their children financial responsibility. 

Allowances can help children learn: 

  • Our spending choices are almost limitless
  • We have limited resources
  • We all need to make choices
  • From spending mistakes they make

By age 5 or 6, many children are ready to receive an allowance. Children are often required to work or do some things around the home to earn their allowance. They learn there is a connection between working and getting paid. 

Of course, there’s more to handling money wisely than just earning money and spending it. Parents can use an allowance to help children learn to make choices and save money. 

Parents can set guidelines for saving, spending and sharing. For example, let them spend 40 percent, require them to save 50 percent and to share or donate 10 percent of their allowance.

Many parents wonder how much they should pay their children. A common guideline is to pay 50 cents or $1 for every year of their age. So, a six year old would get $6, a ten year old $10, etc. As they age, they get paid more and have more to manage. Some parents pay their children every time they get paid; others pay allowances once a month. 

Some children handle money better than others. Many will make mistakes, like buying things immediately with their spending money, and then being out of spending money until they get paid again. Let them run out of spending money and learn that timeless lesson, “Once I spend my money it’s gone.” Don’t rescue them with more spending money. Making mistakes with small amounts of money can be a priceless way to learn enduring lessons. 

To encourage saving money, talk with them about how you are saving for a short-term goal, like some clothes or electronics. Tell them you also save for your long-term goals like retirement. 

Even if you do most of your banking, shopping and bill paying digitally, occasionally take younger children to the bank. Let them see you putting money into the bank, not just taking money out or spending money. 

You can also help develop the habit of saving money by: 

  • Using a piggy bank or other visual savings tool
  • Opening a savings account in their name
  • Having them make regular deposits into their savings account
  • Showing them how their balance is growing 

If you want your children or grandchildren to understand some of the key financial facts of life, help them learn when they are young. An allowance coupled with good parental guidelines can help them learn wise financial habits that will serve them throughout their lives. 


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