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Hulu fees, camp costs, and tracking every penny: Here’s one expert’s money advice for ordinary families

Fee-only financial planner Cheryl Costa talks emergency funds, lifestyle creep, life insurance, and more.

Kara Baskin talked to fee-only financial planner Cheryl Costa, founder of Framingham’s Woodside Wealth Management, for advice designed for everyday people with everyday budgets.Adobe Stock/iuriimotov - stock.adobe.com

Every new year, I scrutinize my family’s budget, as if I can somehow finance my kids’ education and a lush retirement by quitting takeout. I painstakingly scan my Bank of America transactions for extraneous Hulu subscriptions, berate myself for spending too much at Target, and Google “tuition-free college within the next decade.” And, by February, I’m back to my regularly scheduled diet of Hulu and iced coffee.

If you’d like to meet with a financial planner but don’t have time — I’ve got you. I talked to fee-only financial planner Cheryl Costa, founder of Framingham’s Woodside Wealth Management, for advice designed for everyday people with everyday budgets. Consider this your free planning session.


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I have two kids. I just finished paying for day care, and now it’s summer camp. Sports are expensive. There are a lot of opportunities for enrichment, ways to spend your money, and it’s easy to feel squeezed around here. Meanwhile, many people can’t even afford to buy within Route 128 anymore. But then you see people buying $2 million houses, and it’s like: Did they just get lucky? What do regular people do?

I’m in my late 50s now, but I feel like I was that person. We bought our first house and wanted to be closer to the Boston area. But we bought in Marlborough, because that was the only place we could afford. We put 5 percent down and squeaked our way into this house. We bought it over the wintertime, and when the grass started to grow in April, we couldn’t afford a lawn mower. I had three kids under the age of 5.

I think that it can be very easy to feel — competitive isn’t the right word, but to wonder: Where did I go wrong? Who is getting ahead right now?


To be frank with you, a lot of our clients are in their 50s, 60s, and 70s. A lot of them are helping their children in their 30s or 40s. When you look at your friend next door, and they’re driving a nicer car than you are, I think there’s a decent chance that somebody else in the family is either paying the tuition or the camp expenses or gifting them [money] — or they’re constantly refinancing their house and doing cash-out mortgages.

I think a lot of it is an illusion. I always say to people: ‘Don’t be so hard on yourself.’ A lot of what you’re seeing is people getting help from other places or mortgaging themselves into oblivion. We do talk a lot about lifestyle creep: You get into the three-bedroom ranch, and then the next thing you know, you must have a four-bedroom Colonial.

What’s a good budget tracker? My husband and I tried You Need A Budget, and it confused me. Then again, I dropped out of high school math.

Whatever works for you! Honestly, it doesn’t have to be detailed. Some people put it off because they don’t want to track every penny. A lot of people think they live on a lot less than they do, and they’re not tracking it over time. What I see them forget is home maintenance.

You often hear about these little silly expenses, like a Netflix subscription. Is that the make-or-break stuff?

No. I don’t like the title, but I like the book “I Will Teach You to Be Rich.” What it says is: Spend on the things that are really important to you. If going to Starbucks every two days is your important thing, do that. Then cut to the bone everything else that isn’t important.


Talk to me about emergency funds.

Try to get at least three months, for younger families. As you’re getting older, that should be at least six months — even if you think your job is secure.

Where do you recommend keeping them?

I love Ally or Capital One, high-yield online money market accounts. I think Capital One is at 3.5 right now. [Interest rates] change week to week. Those are the best places.

For the financially illiterate: What’s the difference between a 401(k) and a Roth IRA?

A 401(k) is your company plan: [For example], you put in 2 percent; they match it with 2 percent, and you can contribute up to $22,500, which is the limit for this year. If the employer is matching it, put it there first, because you’re getting 100 percent return on your money.

Roth has dual purposes. A Roth grows tax-free forever. You can take out distributions that are untaxed. If you had a family emergency, you could go to the Roth and take out your contributions without any penalty. So it’s kind of a backup emergency fund, but you’re still saving for retirement.

How much should people save for retirement based on age?


My kids are in their early and mid-20s. And I told them, from day one at work, put 15 percent into the 401(k) plan. They were like: “What? That’s ridiculous!” But that’s the guidelines. If you start at 15 percent and go your entire career, you’ll be fine. You won’t be crazy rich, but you’ll be fine. If you let your whole 20s go by and you start saving when you’re in your 30s, it’s not 15 percent anymore, it’s 25 percent. And that’s painful if you have kids, day care, and camps. If you wait until you’re in your 40s, you have to save a godawful amount of money. By age 40, you should have saved three times your salary.

What if you went to grad school? Or had debt? Or just screwed up and didn’t save?

Honestly, a lot of people do have a come-from-behind victory. It’s really hard when you’re in your 20s and 30s to try and do all the right things. With any luck, something happens and you’re firing on all cylinders when you’re in your 50s. … I really find a lot of people get to catch up in their 50s, so don’t despair if you’re in your 30s and it’s not looking good.

What other safeguards should people have in place? Life insurance? Disability insurance?

Life-insurance is a must-have. Go to SBLI or a cheap term-policy provider. You hardly ever need “whole life” that some insurance companies sell via their agents.

When you’re young, if you have two kids, and you’re working and earning a good salary, you should have a $1 million policy probably in effect until those kids have graduated from college. That seems like a lot, but you can get that, if you’re in good health, for a couple hundred dollars a year, and the premium will be fixed for 20 years. I definitely tell everybody we work with to get a term policy, get as much as you can afford or that you’ll need to pay the mortgage, and maybe pay for college education.


Most employers provide [disability insurance] to you. Honestly, it’s the only way to get it somewhat cost-effectively. You’re much more likely to be disabled than to die. I like disability insurance as much, if not more, than life insurance. So if an employer offers it, make sure you get it.

Anything else that people should be thinking about that isn’t talked about enough? What would you tell your own kids?

When [kids] graduate, they want their own apartments, and they can’t quite afford them yet. I’m very draconian: Live at home for two years, save your money, pay off any student loans as fast as humanly possible, and do 15 or 20 percent [in a 401(k)]. You might have to stop when you move out and get your own apartment for a year or two, but then start again. I’m in favor of living at home for two years or living as inexpensively as you can with multiple roommates, if that’s what’s necessary.

What are the biggest mistakes that you see in your practice?

Not saving enough in a 401(k) and buying an expensive car, just because you can. It’s the lifestyle creep. I see kids walking around wearing their Canada Goose jackets. I don’t have a Canada Goose jacket! You don’t need a Canada Goose jacket. I feel like sometimes going up to them and saying, ‘You know what, if you didn’t buy that jacket, and you got something at TJX, could have saved $400 toward retirement.’ I sound like the preachy mother, but you’ve got to evaluate all of your choices. Maybe that jacket is the one thing that’s very important to you. OK, but then, your sneakers should be from Target.

I happen to use a fee-only financial planner. I have friends who pay someone to manage their money, and they get a commission. What do you recommend? Part of me wonders if someone should mastermind my money; part of me thinks, well, I’m not a super fancy person. Do I need that?

I’m also a fee-only planner. To me, I think that’s the way to go, because you don’t really have a dog in the race. … But some people’s finances are really complicated, and they need to have an ongoing relationship all the time because things change so frequently. Some people don’t.

One analogy I use is: My mother just turned 80. She has a concierge doctor, so she pays that concierge doctor $250 a month, all the time. She gets tremendous value from having that doctor. She gets seen right away, and she gets plenty of time. Some people might think $250 per month is a crazy amount to spend for a doctor when you can get a doctor for free who’s in your health plan. I don’t have a concierge doctor, but I go to a doctor once a year. You can’t just sign up for a concierge doctor and say, ‘I only want you to charge me for the months that I’m sick.’ That’s not how it works. Some people need an ongoing planner, because problems come up all the time. Other people can just check in when things are going awry.

Where can parents of young kids cut corners?

[By not] sending the kids to a certain camp because that’s where everybody in town goes or signing up for programs that they really can’t afford. You need to have your financial plan mapped out [first].

It seems harsh, but max out your 401(k) before saving for college. Honestly, I feel that college is where people come off the rails a little bit. UMass Amherst is a lovely college. But if you tour it the same day that you go to [a private school] with their five restaurants and climbing walls, people are going to want the more expensive school. That’s a big fork in the road — and, if you take the wrong turn there, your retirement could be rough.

Interview was edited and condensed.

Kara Baskin can be reached at kara.baskin@globe.com. Follow her on Twitter @kcbaskin.