Starting Over: Budgeting for Success

Our first two topics in the starting over series explored growing trends in changing careers and divorce, especially as they occur later in life.  As part of both trends we discussed budgeting as a key component to success.  In March, we explored budgeting ideas in Your Family Budget.  In this final installment of the starting over series, we will go a little more in depth on the topic of budgeting.

Whenever possible, prepare for big upcoming changes such as career switches or divorce, by saving six months to 1 year of living expenses.  Even when you don’t have an impending change on the horizon, it is important to maintain a 6-12 month safety net for the unexpected and unplanned.  Prepare for the worst and you will be able to breathe easier throughout the process.

The first step towards saving 6-12 months of expenditures is to know what this dollar amount is.  This requires creating an honest budget to determine what 6-12 months of living expenses equal for you.  With a budget, not only will you have a guide for savings, you will also have a clear picture of how much you need to earn going forward.  This is particularly helpful in the event of a new career or separation with different household income.

When starting a budget, you don’t have to recreate the wheel.  There are budget calculators and budget formulas already in place, tried, tested, and proven successful.  Several of these budget calculators are shared in “Your Family Budget”.

One of the most popular budgeting formulas was created by Elizabeth Warren and it is known as the “50/30/20 Budgeting Rule”.  As with any formula, your first step is to itemize your monthly expenditures, being sure to list and include everything. Next list your monthly income.  Using Warren’s formula, you will then want to breakdown your income payments with 50% going towards needs, 30% towards wants, and 20% into savings OR paying off debt.  

A need is defined as something you need to live such as housing, groceries, electric, or water.  Minimum monthly payments toward debt are also considered needs. While a 30% allocation going towards wants may seem to be a lot, wants include things you might not consider to be in this category.  For example, many consider their monthly phone plan to be a need, but it really constitutes an extra – along with going out to eat, and cable or Netflix subscriptions.  Before making a purchase, stop and think.  Is this something I need or is this something I want?  Splurging on wants every now and again is fine, but establish some boundaries.  For example, agree that you will take care of a want once a month and determine a dollar amount to spend ahead of time when you’re creating your budget.  

It’s also important to sit down with your budget regularly to make sure you are still on track and to verify that the budget created still works as time changes.  A good time to review your budget is when you are paying monthly bills or when you receive your paycheck. A budget, once created, is a working plan that can have the flexibility to change as needed and should be an active part of your financial routine.  Don’t create it and forget about it!





Starting Over: Divorce

Divorce rates have been on the decline in recent years, and several factors are contributing.  Fewer couples are choosing marriage to begin with – opting instead to stay single and co-habitat.  This is especially true in lower income categories. However, one age group that does find divorce rates growing are those over 50.  Similar to career change – more people over 50 are getting divorced than in previous years and this change carries some big costs.

To begin with, there is the price of divorce itself.  This includes everything from litigation fees, to charges for document copies, and attorney bills.   Attorney fees are usually the highest price tag item. With lawyer fees averaging $250 per hour, if you can agree on property distribution and child custody details without a lawyer, saving yourself this cost will be huge!  If you think you can come to an agreement out of court and save yourself the money, check out Divorcenet and their guide to DIY divorces for tips.

Be prepared ahead of time and costs will be more manageable.  To start, make a list of your assets and liabilities before going to a lawyer.  Both categories will need to be divided. Now is the time to open individual banking accounts and start to close off joint accounts.  Make sure that you change names as appropriate on all titles, deeds, and accounts. Monitor your credit report throughout this time as well.  Because debt is split, your spouse may end up paying for debt that still has links to your name on it.

Next, there is the cost of starting over to consider.  Be sure to consider the price of having 2 of everything.  Two residences, two sets of bills, not to mention savings accounts split in two, and two sets of insurance policies (health & home/auto). Filing income taxes separately will also result in much different returns going forward.  You will need to consider if you will be paying or receiving child support or alimony money. Alimony is taxable and must be reported while child support does not.

On the bright side:  many people find that the emotional freedom is worth the financial costs.  Create a new budget for yourself….look at where you can cut costs and increase savings.  You won’t be able to spend like you could with two incomes and one home, so you will need to list priorities in order.  Experts recommend meeting with a financial consultant to help organize and make sure you considered everything.

Robert Diggs

In 2014, the PCLA (Pennsylvania Consortium for the Liberal Arts) was formed.  Currently consisting of eleven Pennsylvania liberal arts colleges, PCLA has an incredible mission and vision.  The consortium works to share knowledge and cost efficiencies with its members to help improve the quality of their programming to students and other institutional stakeholders.  PCLA strives to create more opportunities and better access and includes Bryn Mawr, Dickinson, Franklin & Marshall, Gettysburg, Haverford, Juniata, Lafayette, Muhlenberg, Swarthmore, Ursinus, and Washington & Jefferson Colleges.

Robert Diggs has been a vital part of PCLA for almost 3 and a half years, currently employed as the Implementation Manager. 

 Through his role, Diggs is responsible for all aspects of the consortium’s work including event management, internal sub-grant stewardship, and maintaining the PCLA’s social media/website presence. Working for a membership organization, Diggs believes his top priority is to be responsive to the pressures that his member institutions face.  As a result, he strives to deliver the programming needed, or provide the support necessary, to enable the solutions that best address the needs of the consortium membership. This response can vary from organizing a collaborative conference call for sharing of best practices, to the organization of a workshop where experts can help institutional professionals work through the issue at hand. Diggs’s job is to help identify the right solution and implement it.

Diggs’s favorite part of his roles as Implementation Manager is serving as a generalist.  As a generalist he is able to help the institutions collaborate when and where it makes strategic and financial sense. He has been exposed to myriad areas of running a small liberal arts college, and eleven different examples of how to educate a mind…professional experience he would not have gained by working at just one institution, or a single nonprofit.  This experience has been rewarding and beneficial!

Diggs earned a BA from Franklin & Marshall College, where he majored in the Government Department, and is currently pursuing a Certificate in Nonprofit Executive Leadership from the Lilly Family School of Philanthropy at Indiana University – Purdue University Indianapolis (IUPUI).  Diggs has worn many hats throughout his professional life, leading to a unique perspective of liberal arts institutions and how best to serve them. Beyond higher education, Diggs has worked in the Fortune 500 world for a subsidiary of eBay, and in education access for the New York City based program Prep for Prep, of which he is an alum.

Diggs is always open to connecting with people. A part-time member of  The Candy Factory, you can find him there on most Tuesdays and Fridays, or feel free to email him at for additional information or questions!


Starting Over: An Introduction

Starting over can come in many forms.  For some, beginning fresh with a whole new career path later in life can mean exciting but daunting challenges.  How do you secure the right training for your new field? Does the resume that you created in 2000 still hold up in today’s business world?  For other people, starting over may be initiated by a divorce, a new home in a new neighborhood, bankruptcy or foreclosure. How do you navigate when you find yourself in unfamiliar waters without a map?

One current trend is the growing rate of divorce among those over the age of 50.  Rates of divorce for couples over 50 have actually doubled over the past ten years.  Another rising trend shows that more people are making big career changes later in life as opposed to be being stuck on a job path that they don’t enjoy.  CNBC has explored this topic in their article “Career Change is the New Normal of Working”.  Their first tip is to enlist help as you begin negotiating career change – don’t attempt it alone!

Our next several blog posts are going to focus on the increasing trend of “starting over” that many of us find ourselves embracing, for better or worse.  Each entry will cover a topic, including:

  1. Job training, search, and resume building
  2. Creating a budget when you need to start over financially
  3. Rebuilding after divorce

If there are additional areas that you would like more information about, please just leave a comment!  These topics are all unique to the individuals involved, but there is certainly some common ground we all share and can explore.

Sobeida Rosa


The Candy Factory is an amazing asset to Lancaster business people looking to co-work. This co-working facility offers office space to entrepreneurs and small business owners, as well as conference rooms and event space rentals to the public. The Candy Factory is a great alternative to working at a cafe or working from home. Anyone that works out of the space is exposed to an amazing community of local professionals.

One of the local professionals helping to make the Candy Factory amazing is Sobeida Rosa.  Sobeida is the Community Facilitator for the Candy Factory. As a part of her role, she writes blogs on members and plans the monthly events that make working at the Candy Factory so much fun. Sobeida also does administrative work  in addition to giving tours to potential members, and helping to greet members and guests at the front desk.

Sobeida is a Lancaster native who was introduced to the Candy Factory through Advantage Lancaster, a local mentorship program that aims to expose inner-city youth to a variety of experiences and opportunities. Sobeida has been involved in the program since 2011, first as a student and then as a paid intern. In the summer of 2017 Advantage Lancaster had connected with Anne Kirby, the founder of the Candy Factory, and created an internship opportunity that allowed Sobeida to work part time. Now, Sobeida is working as the Community Facilitator.

As a resident of Lancaster City, Sobeida attended McCaskey High School. Throughout her time there she was enrolled in Advanced Placement and International Baccalaureate courses. She was involved with the Vidette (school newspaper), National Honors Society and Student Senate among other things. In her final year of high school she was a dual enrollment student enrolled in the Lancaster Campus of the Harrisburg Area Community College and McCaskey. She graduated in 2016 with Honors with a class of 688 students.

Through her work at the Candy Factory, Sobeida shares that she has gotten to view Lancaster through a new light. This is due in part to meeting so many different people and discovering various business professionals. “It’s been a wonderful experience!”  As an aspiring journalist, Sobeida has been exposed to the multiple uses for her journalistic skills through coworking at the Candy Factory.

Sobeida is currently enrolled in Ithaca College where she is a dual-major in Journalism and Spanish. She hopes to use her knowledge of the Spanish language to write articles on issues within the Latinx community in both Spanish and English. Sobeida has had works published in Motivos Magazine, a bilingual magazine based in Philadelphia. As well as several self published pieces on her blog which she started in the summer of 2014 as a creative outlet for herself and the things that interest her.  

To find out more about Sobeida visit her website.

For anyone interested in the Candy Factory, check out their website and fill out their contact form for more information!


Independent Contractor or Employee?

A question we receive regularly from clients is whether they should file as an independent contractoror an employee at tax time.  Employers likewise ask the same question when looking at their staff. It is a topic covered with great frequency and popularity, so if it’s something you wondered – you are not alone!

The website lays out the distinction very neatly on their website.  There are several important points to recognize:

Employers must pay careful attention to the distinction when determining what to withhold for employees.  It is an important consideration because employers don’t pay taxes on payments to independent contractors. This is in contrast to income taxes, Social Security, Medicare, and unemployment taxes that must be paid on wages to employees.

There are 3 common ways to break down the difference between contractors and employees.  These categories include behavioral, financial, and the type of relationship. For example, with employees, employers:

  • Can control what and how the worker does their job and the business aspects of the worker’s job, such as how payments are made and what tools are supplied.  
  • There are also written contracts on benefits, such as insurance, vacation time, and the like with employees.
  • Finally, employees have a relationship that will continue indefinitely.

All of these attributes are in contrast to what makes up a sub contractor.  For even more detailed explanations of these 3 determinations, check out Tax Topics.

As an employer or employee, if you are still uncertain as to the correct filing status, Form SS-8, Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding can be filed with the IRS. After reviewing the individual’s completed form, the IRS will make a final determination as to employee or independent contractor status.  If you are a worker and believe that your employer has improperly classified you as an independent contractor, you can utilize Form 8919 to calculate what is due to you.  And as always, our office available to help with questions whenever needed!


Volunteering & Tax Deductions

Most of us find ourselves volunteering at some point in our lives and the reasons are numerous.  Volunteering looks great on a college or work resume. If you have interests, causes, or hobbies that you believe strongly in, volunteering in those fields is a great way to give back to the community.  Volunteering just feels good! But can you receive tax benefits in the form of credits or deductions for the time you spend volunteering? Is volunteer time tax deductible? The short answer is no. Providing free professional services to a qualifying nonprofit cannot be claimed as a tax deduction.  The IRS lists volunteer time as a contribution you cannot deduct for in their Publication 526: Charitable Contributions document.  

So what is the good news?  While you can’t claim your time, you can deduct for out of pocket expenses incurred as a part of volunteer such as uniforms and transportation.  Transportation can include travel expenses such as lodging and meals, provided the trip is primarily for volunteering and not leisure. If you use your own vehicle for volunteer work, gas and oil costs are reimbursable.  Gas can be reimbursed at the rate of $0.14 per mile and tolls and parking costs are deductible as well. Entertaining potential contributors to your charity through events such as fundraiser are also deductible expenses.

To claim any deductions, please remember – you WILL need documentation of the unreimbursed expenses for expenses totaling more than $250.  Documentation required includes a list of expenses with receipts and a letter from the charity explaining the work done. Acceptable expenses are also listed in Publication 526.  You cannot have received reimbursement from the charity for these expenses in order to claim. Additionally, the expenses accrued must be solely the result of volunteering and not due to any personal interest or benefit.

To receive tax deductions, the organization that you are volunteering for must be a qualified nonprofit, tax-exempt organization.  Not sure? There are several ways to verify status. You can ask the charity for a copy of their 501(c)(3) letters. The IRS Publication 78 contains a list of qualified organizations at or by calling 877-829-5500.

Take the time to claim the deductions due to you through volunteer work.  As you assist charities by supplying your time and skills, the IRS assists taxpayers by making it more feasible to volunteer through tax deductions.  Some volunteers look at the money saved through taxes as more that they can contribute to the causes that they believe in!

Disaster Relief Scams

Continuing our unfortunate series on scams to be aware of….disaster relief scams.  More common during this time of year when hurricanes and other natural disasters are more prevalent, educating yourself is the best step to prevention.  The IRS warns taxpayers to look out for disaster scams which could originate through email, phone call, social media, or even in person.

As a part of educating yourself to prevent fraud, it is essential to know the correct contact numbers, websites, and organizations.  If you need disaster assistance the number for help is 866-562-5227.  For anyone who would like to make a donation to help, an accurate list of organizations eligible to receive tax-deductible charitable contributions is on the IRS website.  For more information from the IRS on disaster scams, you can visit their link here.  Information is also available on how to report suspicious activity.  The FEMA website contains additional information on correct disaster phone numbers and what to do if you suspect fraud.

Another step to prevention is to always pay with a check or credit card so that you have a record of your transaction.  We discussed other scams that target taxpayers at this time of year in Tax Scams.  The advice for disaster relief scams is very similar in both cases….NEVER give out personal information to any organization you can’t verify.  This includes account numbers, social security numbers, pins or passwords.

It is certainly upsetting that people will use disaster as a means to scam taxpayers.  Stay cautious with your personal information at all times and do your research before making donations.  There are definitely plenty of worthwhile organizations available to donate to and help make a difference!

Tax Scams

As summer begins, the IRS warns about tax scams that have a high potential to occur at this time of year.  With taxes just filed, many people are expecting to hear from the IRS, but beware!

Never give out your social security number, account numbers, or passwords/PINs.  If you are asked for personal information, hang up! Get in touch with the agency that is contacting you using a number that you have on file for them and know to be accurate.  The IRS can be reached at 1.800.829.1040.  

The IRS does not leave pre-recorded messages or send emails, so if you receive one, you can be pretty sure it’s a scam.  The IRS will also not call and require payment over the phone. These calls are made under threat of serious action being taken without immediate payment, not a tactic employed by the IRS.  Suspicious emails should be reported to  

The IRS website has a list of signs to look out for to prevent scams. They also include steps to take in the event anything suspicious is sent to you.   Looking for more information? Forbes shares a list of the 12 most popular tax scams.  Please educate yourself and be aware to save yourself a lot of headache in the future!

Credit Card Debt

Paying off credit card debt can be like losing those few extra pounds you want to eliminate – it’s hard to get started and equally challenging to find a plan that you can stick with in the long run.  There are several different tactics for paying off debt, but two of the most popular are the Snowball and the Avalanche approach. With the snowball approach, you pay the minimum amount due for each credit card each month and put any extra towards the credit card with the smallest debt.  When that credit card is paid off, you then put extra amounts to the card with the next smallest debt. Using the avalanche method switches gears from the card with the smallest debt to focusing on the card with the highest interest amount first. The avalanche method is often preferred because it can save you more money in terms of lower interest payments over time.

As you pay off credit card debts, it is also the right time to look at how to prevent it from occurring again.  What changes can you make to your lifestyle to prevent future over spending? The first step is to create a budget.  If you find expenses are greater than money earned each month, use your budget to take a look at where you can reduce your expenses.  Is it possible for your family to downsize an expensive car or one that is a gas hog? Is your debt situation caused by owning a house that just doesn’t fit the budget?  Often times monetary changes can be more subtle in the forms of eating in more than going out or cutting some expensive tv or movie viewing subscriptions. If your electric bill is high, take a look at what is eating up your electric.  Is it possible to heat or cool your home in another way? Are you unplugging all electronics each day?

Once you’ve selected the pay off method that is best for you, created a budget, and looked at which costs to eliminate in the future, it’s time to set a goal for how long you want to take to pay off your credit card debt.  Curious how long it will take based on interest, minimum payments, and all those other factors? Fortunately, there are a multitude of credit card payoff calculators available that can then show you what your monthly payment needs to be.  At The Balance, they review and recommend 5 of the best.  Which payoff calculator is best for you will likely be determined by the factors at play in your own debt, such as how many cards do you have.

We’ve discussed previously what to do with your tax refund.  Paying off some or all of your credit card debt was at the top of that list.  Putting money towards debt helps to lower the amount of interest that you are paying, thereby saving you money in the long run.  If you are worried about your credit score, having a lower amount of debt helps to increase that rating as well. If you are so fortunate to receive a financial bonus at other points in the year, putting a portion of that towards debt is usually the best choice.  If you find you need someone else to turn to with questions about credit card debt, the National Foundation for Credit Counseling is a non-profit that can help!