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Financial Management vs Financial Planning

Hey everyone!

Firstly, make sure you watch our video below to let us help you understand what we mean when we say a budget can change your financial world, regardless of where you are in life.

After that, don’t go away. Abigail took her time this week to bring five practical bits of financial planning advice you can put in to practice today. Trust us when we say, you probably haven’t considered a few. Or have you? Let us know how many you are already doing in the comments section below and feel free to include a few helpful tips of your own!

Beware the Budget Buster!

Nothing derails a person’s best efforts at budgeting more than the common budget buster. Budget busters are expenses that do not occur monthly, so we don’t include a line item for them in our monthly budget. They are pricey and irregular expenses, but expenses we should plan for and budget for nonetheless. Here is a list of common budget busters and tips to plan for them so you are not knocked off of the path to financial success!

Automobile expenses

None of us think about that oil change until it is long overdue, then we walk away with an unplanned $100 bill (or worse). To avoid unexpected car expenses, review your maintenance history closely and divide your annual auto service bills into a monthly budget line item, and then sweep that amount away into a savings account until you need it. For example, have you planned ahead for your next set of tires or brakes? That is easily a $1000 bill! Estimate the costs for those mandatory automobile maintenance items and divide them up over the year (or sooner, if your car is a few years old and will most likely need big ticket repairs/replacements in the near future). Forget the expensive, extended warranty. Just make sure you budget for your auto insurance deductible and routine repairs so that when these costs arise, you are prepared and not derailed.

Dental bills

There is really nothing I dread more than going to the dentist office. Actually, my dentist is super nice and keeps my teeth healthy, but I still fear the visit. Besides increasing my anxiety, a trip to see the dentist can increase your spending limit for the month. Regularly going to the dentist is a beneficial and necessary healthcare cost that we need to plan for. However, even the best dental insurance plans do not cover everything and are not always worth their premiums. Make sure there is a line item in your monthly budget for your annual dental cleaning. Call ahead to get the costs and include that item in your budget monthly. Sweep it into a savings account until you need it. Plan ahead for additional services, like dental x rays and, if you are prone to cavities, plan for those too. If you don’t have dental insurance, visit and check out their plans. It is not insurance, but a dental savings plan. Compare
and see if you should even be paying insurance premiums or if this is a better deal for your particular dental needs.

Home Repairs

Make sure that you create a “sinking” fund for unexpected home repairs. The average major home repair sinking fund should be about 3% of your home’s value. If you do not already have a robust emergency fund in place, calculate what your sinking fund should be, divide by 12, and create a line item in your budget. Then sweep that money away every month in a designated account that you will not touch until you need it for home repairs. When you realize what replacing a hot water heater or air conditioner costs, it is easy to see how these home repairs can derail your financial plan for several months. You may even consider having your homeowners insurance deductible set aside in case of a catastrophic weather event like we see in Florida every few years.

Medical expenses

As a mother of 4 children, I am a major user of our health insurance plan. When our children were little, we frequently met our medical deductible by March every year, sometimes even sooner! I am a huge proponent of the high deductible health plan and an HSA account. If your employer offers this benefit, make sure you take full advantage. If not, put a line item in your budget for medical expenses and try to save the amount of your health insurance deductible in a savings account each year. That way, you will be prepared in the case of a surprise broken bone or emergency appendectomy! If you know a surgery is forthcoming, plan ahead by saving for your anticipated out-of-pocket expenses and contact your medical insurer to request a payment plan. These plans are usually interest-free and have long-term payment options available.

Income taxes

Nothing will derail your best efforts to save like a huge income tax bill you didn’t prepare for. If you frequently owe a big tax bill at the end of the year, make sure you are ready for it next year. Meet with your CPA and do your best to calculate what you will owe and plan for it, either by making estimated payments or putting that money aside in a savings account. It is easy to suffer financial setbacks by not planning on what you will owe the IRS. Never doubt that the taxman cometh! So be prepared and well-equipped to pay your dues.

So, please do your best to avoid these budget busters. You work too hard to be bamboozled by these easy-to- prepare-for, common household expenses. Remember, if you are ready, you won’t have to get ready, you will already BE READY! If you need some help with your budget…. Just ask us.


Abigail Skipper Financial Coach Ranch Capital Advisors

Find Extra Money in Your Budget Right Now!

While you may not be affected financially from the loss of a job during this economic downturn, why not take some time to comb through your bank statements and look at your spending? As we witness so much loss around us, we have an opportunity, to minimize the waste in our own spending. After all, we have extra time on our hands due to this forced slowdown in our social lives and work schedules, with many of us now staying home. There are obviously monthly savings we will have in the short term – for example, from money not spent on entertainment or fuel – but this is a great time to make permanent changes in spending habits. The following exercises and tips will not take much time, but could reap hundreds of dollars in monthly savings.

Comb through your subscription services

While many of us may be watching more TV and streaming more entertainment than we normally would, this is still a good time to look at our subscription services. Do you really need Netflix, Hulu, and Disney+? Take a look at how much you are watching, and perhaps turn one or two off for a few months. Then consider this: $20 a month saved = $240 in a year! 

How much are you using your gym membership? Most gyms are closed right now, but before COVID, were you taking advantage of your gym membership and using it regularly? If not, now would be a good time to save that money and find alternate home workouts. There are many streaming services (some are even free), that can be done with minimal equipment from your living room. That’s $100 a month saved = $1,200 in a year!

And is it time to cut the cord all together? Cancelling the landline phone and only paying for a cellular phone can save over $50 a month. Do you really need that unlimited data plan? Take a minute to view the last 6 months of your cellular bills to see if you really need unlimited data. Between the landline and a different data plan, you could easily save $100 a month = $1,200 in a year!

Do you really need cable or DirecTV? A few years ago, my family realized we never watched the 400+ channels on DirecTV and were really only watching Netflix! We saved $180 a month = $2,160 a year! And, while I can definitely live without NBC’s Today Show in the morning, I absolutely cannot live without college football. During football season, we spring for HULU Live TV, and at around $60 a month, from August through the National Championship in January, it is well worth it. We just turn the subscription off when football season is over. 

Take a few hours and get updated quotes on insurance

Are you paying too much for your auto insurance? Have you taken time to get quotes from other companies? I took an hour to shop around for auto insurance after my teenagers started driving and was able to save $300 a month off of my bill. That is $3,600 a year! Plus, many companies offer competitive prices if you bundle services. Take some time to evaluate what you are paying for your homeowners and auto insurance bills. It would be worth it to see if you can save with another company or by bundling services. 

The cost of life insurance has also fallen over the years which can translate into lower premiums.  As a Ramsey Solutions Preferred Financial Coach, I recommend 10-12 times your annual income in life insurance, term life only, for a 15-20 year term. This is crucial coverage if loved ones are dependent on your income, and you still carry debt. It is worth a second look to see if there are any savings available. Contact one of our insurance specialists to run you a quote!

Trim your grocery bill

The largest waste in most household budgets is in the grocery bill. We neglect to take inventory before going to the store, then we buy too much, food goes bad before we have time to eat it, and we don’t take the time to check prices and shop deals. This is a great time to clean out your pantry and freezer. Many of us have hundreds of dollars of food such as meat, casseroles, and vegetables in our freezers and pantries. Challenge yourself to use it all before buying any more groceries. Go through your pantry and see what you have; make a list of your supplies on hand and do some recipe planning; take advantage of your extra time and cook instead of getting take-out. 

This is just a few things you can do to save money. Be deliberate. Mark off time in your calendars and make the calls. The savings add up quickly.

If you need help budgeting, I have several helpful tools that I would be happy to share with you. Take advantage of my financial coaching services during this down time and make permanent changes in your spending habits to put towards creating long-term wealth.


Abbigail Skipper
Financial Coach
Ranch Capital Advisor

COVID-19 Stimulus Programs for Small Businesses

On April 15, Gregg Pacitti CFP® from Ranch Capital Advisors, Jason Osborne SVP/Regional Manager for Bank OZK and Bryan Bruce, Founder of Your Brand Voice Digital Marketing went on Facebook live to discuss COVID-19 Stimulus Programs for Small Businesses.

COVID-19 Stimulus Programs for Small Businesses

Join Gregg Pacitti CFP® from Ranch Capital Advisors, Jason Osborne SVP/Regional Manager for Bank OZK and Bryan Bruce, Founder of Your Brand Voice Digital Marketing on this live video discussing COVID-19 Stimulus Programs for Small Businesses.

Posted by Ranch Capital Advisors on Wednesday, April 15, 2020

Turning the Page on March and Moving Forward

As we turn the corner to the end of a difficult month and quarter, we’d like to provide an update on our forward-looking strategic outlook.

It has been a strange quarter to say the least, as we saw early gains in the global markets for January and February, only to close the quarter out with March delivering one of the worst months in the last 70 years.  It all added up to one of the worst quarters since 2008 producing a lot of anxiety from both asset prices and Corona coughs…….

Worst Monthly S&P 500 Performances Since 1950

Month/YearPercentage Drop
October 1987-21.74%
October 2008-16.79%
August 1998-14.58%
March 2020-12.51%
September 1974-11.93%
November 1973-11.39%
February 2009-10.69%

One of the positives with turning the page on March is that April has been the best performing month for the market over the last 13 years, with an average gain per month of 2.50%.  Only April of 2012 where the market fell by less than 1% was a negative April. So far we are off to a good start, although it is sure to be a long month of emotional challenges.

Market Bottom Checklist

We wanted to circle back around and provide an update on the checklist we provided last week to help determine a solid market bottom.  As we have mentioned repeatedly… finding a bottom is a process. You can expect strong up days that are going to make you think the worst is behind us and you can anticipate down days that can cause you to open the liquor cabinet.  Bottoms are never delicate, but the process works and has always led to higher returns over time. Here are updates to our checklist:

  • Oversold Conditions– Again we were at record oversold levels two weeks ago, so we can check this box off.
  • Bearish Sentiment- We have seen a massive surge in the bearish percentage amongst the Investors Intelligence survey in the last 3 weeks. Currently sitting at 41.7% on the bearish side versus an average of 21% over the last decade, this is the highest reading we have seen since 2011.  Also, this is the largest 4-week change in bearish percentage in history. So, we can check this box off. 
  • Falling Stock Correlations- Based on our data we are not there yet with this indicator as we are not recording any positive divergence in the average stock performance on down market days.  Although it has improved over the last two weeks, we are still seeing too much participation by the average stock on negative days.
  • Stocks Making New Lows- We have seen the number of daily news lows decrease in a large way in response to the market firming up over the last two weeks.  But we are only going to half check this box since we need to see if there is any divergence on new lows if/when the market retests the lows of March 23.  There is improvement here, but more work needs to be done to confirm.
  • Strong Breadth–  This is a mixed bag as last week saw three very positive breadth (number of stocks advancing vs declining each day), but we have not seen continued follow through and also we still see a bit too much participation when the market moves low.  We still need more consistent positive breadth to check this box.

Special Breadth Note– The market had 3 consecutive days last week (March 24, 25, 26) where advancing volume was +80%, which is a very rare event.  There have been 7 times this has occurred in the history of the market, most recently February 2016. Interesting is that all 7 of the previous events marked an acceleration of the market off its lows.

  • Risk Seeking Leadership– We are looking for the high beta names, the more aggressive names, to lead off the bottom, but so far this has been underwhelming.  There was good participation last week, but leadership in higher beta assets has fallen this week. Box not checked.
  • Positive Credit Spreads- While we have seen the bond markets in general calm down and show some return to normality, we are still seeing wider spreads in the yields of investment and non-investment grade bonds relative to Treasuries.  This is more a product of liquidity, which should improve with the assistance of the Fed, but we need to see credit spread return to normal ranges to feel more confident.

While there have been improvements with our checklist over the last week and a half, there are still more boxes to be checked off going forward.

 The process will continue for however long is necessary to hammer out a solid support level to build off.  Last week provided the 2nd strongest 5-day rally we have seen since 1960 in the S&P, only an early October rally in 2008 was stronger.  What remains to be seen is if this is the beginning of a new trend higher or just a bear market rally. There are a number of historic data points that say it’s the start of a new trend, but again we have to take into account how much we have fallen, how fast we have fallen, and how much negative news is still out there.  A retest of the lows is likely and maybe even welcomed on our end, as it would give us a greater conviction that the bottom is in and the worst is behind us.

Oil and OPEC/OPEC+

The market received some welcomed news last week as Saudi Arabia called for an emergency meeting on April 6th with OPEC and OPEC+ members, Russia is the (+) in OPEC+.  Oil spiked 25%, the largest one day gain on record, in anticipation that the meeting will put an end to the price war between Saudi Arabia and Russia that started in early March.  The price war that erupted over the weekend of March 7-8 caused crude oil to crash to an 18-year low as oil prices were already struggling with decreased demand caused by coronavirus lockdowns.

Of course, nothing is easy when it comes to the geopolitical nature of oil, so the meeting scheduled for April 6th has now been pushed back to April 9th.  Tension flared up late Friday between Russia and the Saudis, but at least the meeting has been rescheduled and not canceled altogether.

We cannot stress how important an agreement on oil would be for the overall market, something most investors are overlooking since the news has been all been about the coronavirus.  But, consider that through the market close on Friday, March 6th, the S&P 500 had lost 295 points or 9.12%.  Following the news of the price war that erupted over the weekend of March 7-8, the S&P went on to lose 586 points over the next 6 trading days, dropping the S&P by an additional 19.72%.  The coronavirus had been a concern since January, so it is difficult to assume that all of the 19.72% drop was associated with only the virus outbreak. A positive outcome from the OPEC meeting could go a long way to getting the market moving in the right direction.

One Final Point…..

The length of any bottoming process is unknown until its finally over. However, we are picking up some interesting data points when looking across the numbers that we track that are encouraging.  Last month just about every area of the market was down more than 10%, except for the Nasdaq which closed with a loss of 867 points or down -9.25%. The Nasdaq was the “best of the worst” last month.  We also looked at the performance of the Nasdaq during the actual day sessions in the market from 9:30 am to 4:00 pm vs the overnight futures market which runs from the close to the open.

Looking at the data we get a very interesting picture of the actual selling or lack thereof that took place last month in the Nasdaq:

Nasdaq Total Point Loss for March:-867.28 points (-9.24%)
Nasdaq Total Point Loss during the overnight futures session: -1,391.10

Nasdaq Total Point Gain during the day sessions in March:

What we saw during the month of March in the Nasdaq was very unusual as basically 160% of all selling of the index came during the overnight futures session.  For as bad as the index and the overall market was last month, the Nasdaq add over 500 points throughout the day sessions during the month.

Selling during the day session is a sign of distribution or massive selling across the board by all types of investors, but mostly from institutions due to their size and liquidation power.  Looking at March, it is clear to us that the large institutions were actually net buyers throughout the month. This tells us that the big firms are buying the shares of the retail investor who may be panicked and looking to sell. This is a very bullish indicator to us.

In conclusion, the bottoming process is working itself out.  We are seeing positives show up in many different places.  The process is not perfect, it will be stressful some days and jubilant on others. Just try to remain levelheaded and trust the process at hand.  We will keep you updated on both the positive and negative data that we see and let you know if there is any change to our overall outlook.

Investment Advisory Services offered through Pacitti Group Inc. DBA Ranch Capital Advisors.  Securities offered through APW Capital, Inc., Member FINRA/SIPC. 100 Enterprise Drive, Suite 504, Rockaway, NJ 07866 (800)637-3211.