Financial Procrastination

I love it when another author writes about money, I agree with it and it has points that I had on my article topic list!  I found just that article recently about what procrastination can do to your money.  I would love it if you read this article because the statistics that are in it, but I will do a quick summary here also in case you don’t have time! 

1. Don’t delay investing it costs you money – smaller amounts invested now can pay off more than large amount invested in twenty years.
2. Timing the market usually costs you money – studies show that missing just a few of the markets best days dramatically affects your rate of return. (On a personal side note aside from this recommended article, timing is more work you have to spend a lot more time on your money if you are trying to time the market.  I for one don’t have that time and prefer an automatic investing program.)
3. Ignoring money can cost you late fees, overdraft fees, the benefits of unused gift cards and more!
4. It costs you money to be late on your taxes.
5. When the financial decision is a big one, think retirement or purchasing a home, don’t rush into it without knowing the details.

Now it is time to do something about money procrastination!  How you ask?  Well just as you would when you are planning a vacation, cleaning your house or organizing a closet it only takes three easy steps will get you started.

First, make a list of what you need to accomplish.  Without knowing that first you need to ask your boss for time off for vacation you many waste lots of time and money booking your vacation to find out you have to be at work that week.  Sit down and make a list of what money issues you have been procrastinating on, it will make tackling them easier and cheaper because you can address the most pressing issues first.

Second set aside some time to work on your list of things to tackle.  If you don’t allocate time for cleaning it has a tendency to not get done and then you have a dirty house.  Many people dedicate Saturday morning or some other convenient regular time to clean.  Money is no different, you will make more progress if you know that every Sunday night you have an hour to sit and work on money, whether it is paying bills, researching investments or reading to expand your knowledge!

Finally, do something!  Even a small step can take you a long way.  If you don’t have the time or desire to completely reorganize your closet even the small step of throwing out the unused items will make a big difference in the appearance and organization of a closet.  Money is the same, small steps can help.  Set up automatic payments so you don’t get late charges, get at least $25 into an investment on a monthly basis, or cancel one small expense to help bring your budget in balance.

Paying small amounts of attention to your money can make a big difference.  Don’t wait another day to get your money on the right track! 

Don’t miss our money fitness workshop to help you get that list created with a bit of help!

You can be rich without the gimmicks

Losing weight can be a frustrating and hopeless experience.  You spend time sacrificing your favorite foods, working out when you don’t want to and you still seem to make no progress towards your desired weight.  You begin to believe you cannot do it; or that maybe your current weight is just fine or that the only way to your goal is through extreme actions. 

When you hit that point when all your energy and hope to achieve your target is gone you begin to look for the miracle cure and have a tendency to forget about common sense.  Suddenly surgery and supplements that will cost you hundreds seem like the only option.

Money can often time feel this way also.  After trying for months or sometimes years to establish a savings program if you have had no success you begin to think that get rich quick schemes and the lottery are your only option to wealth.  You begin to believe that you don’t even make enough to get you to retirement or even to a place where you can breathe in between paychecks. 

The Sharks

Unfortunately, there are many people out there waiting to prey on your hopelessness and temporary loss of common sense.  In the weight loss world it can appear as products like a miracle berry or fat blocker pills.  In the money world it comes in the form of make thousands from home working only a few hours a week or uses other people’s money to create a real estate portfolio.  None of these options are going to get you to your goal and actually keep you there long term. 

So how do you move yourself beyond the doubt that you can accomplish your goals and start down a track that will actually allow you to save money that will be around long term?  It can be as simple as starting with four steps.

Sleep on All Major Decisions

One of the best things you can do to avoid getting trapped in the get rich quick schemes is to implement a policy of sleeping on everything!  Take the extra time that you are using to think about your decision to talk to someone you trust to see what they think about the opportunity.  Do some search engine searches on your prospective opportunity but add the words such as bad, stay away or other negative words on to it.  You may be surprised at what you find.  People sometimes laugh at me or look at me funny when I say I need to sleep on it, but since I made that a requirement my decisions that I regret have decreased.

Begin Learning about the Basics of Money

It is hard to make progress in any area that you don’t know anything about.  When I was recently trying to improve upon my healthy eating (or lack thereof) I read everything I could get my hands on and hired a nutritionist.  It was only with these combined that I finally was able to pull it all together and understand what a healthy meal was.  Money is the exact same.  When you don’t understand it, it becomes very easy for people to take advantage of you and it makes wealth seem like an un-climbable mountain!  Start simple, begin reading one personal finance article a week or subscribe to a magazine or e-zine.  Anything for you to start that learning process.

Remember that Small Changes can make a Difference

Small changes can make a big difference in adjusting your weight.  Simply adding more water to your day can increase the functioning of your bodies thus allowing your cells to process the food that you do take in more efficiently.  Setting aside $25 a month does eventually add up and can help you achieve wealth!

Believe in Yourself and Listen to your Instincts

I know this is one of those easier said than done things; it takes time to get to a point that you can do this with full confidence.  However, every step closer to this point helps with your money decisions.  This will actually become easier as you do the other three things, as they will build your self confidence.  When you lose five pounds and see that you can do it you become more in tuned to yourself.  When you save $300 you will get the belief in yourself and know that you can lead the way.  And if you listen to your gut when it says don’t invest with this guy then you create trust in yourself that you can do this and make the right decisions.

Everyone can be rich, no matter how much they make, as long as they make smart choices and take the necessary steps to save the money.  It is about making decisions that will get you there and keep you there.  Taking time to evaluate all decisions, educating yourself about money, making small changes and believing in yourself will get you there.  I know you can do this, now you just need to believe in yourself!  Start with these four steps and you will be on your way.

Having patience and intention with Money

One of the hardest issues with money is having discipline and intention with money.  Most of us were raised in an environment where we were taught that you deserve anything you want when you want it.  Unfortunately that is not the path to success with money.      

Being intentional and patient with money has been on my mind a lot lately, with all the market and economy in turmoil and all the snow that we have gotten lately!  SNOW?!  Yes, snow makes me think of being intentional with our money because my car is awful in the snow.  Every year when it snows I talk about buying a new car.  (It is more like bitching about needing a new car, just ask my sister she get the pleasure of hearing it every year.)  So you may wonder why I have not made the move to a different car in the past six years.  Because we are very deliberate with our money, we have two very specific long range goals (have a beach house and retire early) that we gear most of our decisions towards.  We know that we cannot get there in our desired timeframe without doing the necessary planning and forgoing of stuff now.  So how do we handle being intentional with our money? 

1.    Taking lots of time on big purchases – I would have had a new car on Monday night if we did not have a belief to do things slowly.  Stop and ask yourself do you really need this, how else can this money be used, is it a want or need – really grill yourself like a coach or financial planner would.  Most of the time you can talk yourself out of the purchase.

2.    Cash rule – we do all major purchases with cash, no debt for us.  This really makes you think about your purchases, it is harder to spend cash out of your bank account than to sign up for payments.  I had to stop and think if a new car for the handful of times that is snows was a smart move with our cash; the car is fabulous every other day of the year so why waste the money! 

3.    Long term planning – every year we sit down and decide what projects we would like to do with our cash AFTER we invest what we need to in order to reach our goals.  Sometimes this means putting wants on a list that may not get done that year.  For example, we have wanted new kitchen counter tops, back splash and a new sink for going on 4 years now.  But it never quite makes the list of projects even though we really want them.  Using credit or not investing money takes us away from our goals not to them, and the planning helps keep us on task.

4.     Adjust our planning when the unexpected happens.  We had planned on doing the kitchen this past summer, but on June 27^th were hit by a storm that caused damage that our insurance company was not going to cover (that is an entirely different blog post to rant about).  So we had to sit down and redo our list of wants to pay for the damage that was not covered.  Doing this allowed us to manage the unexpected without adding debt or stress to our lives.  We keep our list year round in the order of when we want to do it and how much it will take so that when we need to it is just a quick review and adjustment.

5.    Build in fun and wants to our list.  Our list includes things we enjoy so that we do not feel like it is all work and no play!  We love to travel, so part of our planning includes a good vacation budget every year.

6.    Allow room for error – if we make a mistake with our money we forgive ourselves and readjust to get back on track.  Small mistakes are not worth beating ourselves up over.  So we forgive and move on.

I encourage you to be intentional with your money in the New Year.  Set goals and really focus on achieving them – even if it means making hard decisions about where your money is spent.  Financial health is possible for everyone with a little bit of attention to your finances!

Live on less than you make

To me the best thing that you can do during a recession is to make sure that you are doing what you need to do to become financially healthy.  Even if you don’t feel the pressure of a lost job, or a postponed retirement, use this time to confirm that you are on the right track with your money.  Where to begin?  In my opinion the best place to start is to make sure you are living on less than you make.  The best way to live on less that you make – is to start living on a budget (or spending plan if you prefer those words).  Budget forms are all over the internet, grab one and start going. 

Need one?  Get one from our site:  http://www.smartstepomaha.com/budget

Use of Coupons

What am I doing differently now that the economy is slowing?  Honestly not much, why?  We have always lived below our means and tried to save as much money as possible.  However there is one big change that I have made to try to increase our savings – more coupons!  I have always used coupons, but now I am using more of them and seeking them out versus my old method of just using them when they came along.  

One of the ways I do this is by signing up for the email list at stores I frequent.  For example, I am on the Borders mailing list and they send out coupons via email.  So when I decided to buy my Dad a book for Christmas I waited until the coupons for the month came out and then went in and bought the book.  The savings might not have been much but I figure every $4 that I save is that much more in my savings and puts us that much closer to retiring early with no financial worries.  Most stores have these lists and it can be an easy way to save money on things you were already going to purchase!  So how can you save $4?

To save Detroit or not?

With all the talk of bailouts and Detroit I think it is time we really evaluate if it is good for us to give Detroit any money.  I believe it is time for a BIG change in Detroit.  If small business ran their companies like the big 3 run theirs we would have been out of business a long time ago.  Inefficiencies, large payroll costs, lack of forward thinking have killed them and if they can’t fix that then why let them stay in business (this is not a new issue that they are facing).  The result of them closing would be bad at first, but the American economy and people will move on and prosper!  Let them suffer their own bad management, why throw good money after bad money.  Not only that but if we do let one of them go down for their poor management then maybe the other two would wake up and try to really reform their businesses.  If nothing else it will alter the supply and demand equation thus making it easier for the other two to survive.  Give it a thought do you want your tax money going to companies that are poorly run and most likely will not change that fact?

 

Don’t Spend it Save it!

As we all head into the holiday season and some of us out for Black Friday I wanted to just give you some numbers to maybe get you to not spend as much.  And maybe even start a savings plan!  All of these numbers are done based on a 10% rate of return, which is below the market average for the long term, which is just under 12%.

Save $25 a month

Years	Value	Amount Invested
5	$1,935.93	$1,500
10	$5,121.12	$3,000
15	$10,361.76	$4,500
20	$18,984.22	$6,000
30	$56,512.20	$9,000
40	$158,101.99	$12,000

Save $50 a month

Years	Value	Amount Invested
5	$3,871.85	$3,000
10	$10,242.25	$6,000
15	$20,723.52	$7,500
20	$37,968.44	$12,000
30	$113,024.40	$18,000
40	$316,203.98	$24,000

 

Imagine what would happen if you saved more, made the 12% and started saving as early as possible? ($50 a month over 40 years at 12% is $588,238.63) Start saving today (All 25 year olds can have half a million by retirement if they do nothing more than $50)!

How to stay calm in a financial crises

I know everyone is getting tired and depressed about the current financial rollercoaster.  So how do you get through in a calm fashion?  The short answer?  Ignore the media.  The long answer has a couple more details to it!

1. Ignore the media – If you do not subject yourself to the over analysis done by the media of what is going on it is harder to become depressed and easier to stay calm.  Liken it to a watched pot never boils, nothing major is going to change in one day.  Check in on what is going on once a week and spend the rest of your time focusing on you! (See number 4)
2. Remember what your timeline is – Investing is for the long run.  If you don’t need the money for five years there is nothing to worry about.  The market will come back and we will move on.  If you need it before 5 years you should not have been in the stock market.  It is a volatile investment in the short term and a great investment in the long term.  What to do if you are in it and you do need the money?  Sit for as long as you can, but then take it when you needed.  Exhaust all other responsible options first.
3. Use your extra time that you are not watching the news to educate yourself about how markets work and other money matters.  All economies must have their ups and downs.  We have been very lucky to have had a long period of growth; it was inevitable to have a down turn.  It has happened before, it will happen again and we will all be okay.
4. Remember that YOU create your destiny.  Take this as a time to move forward when everyone else is drowning in their tears.  Take a minute, determine where you are and then get out there and move yourself in the direction you want to go!

Need more help with that?  Check out our MoneyFit package at http://www.smartstepomaha.com/services

Where does the Money come from?

With all the talk of bailouts – they never seem to stop!  Every time I hear about Congress spending more money one thought comes up.  Washington does not create any money, all the money that is there is because we paid taxes or fees.  So every time they spend money and put us in debt it has to come from us latter.  SO congress spends money and our taxes go up.  End of story – there is NO other way for Washington to get money.  So please if you are listening Washington STOP spending money.  Assuming they are not listening then it is up to us to call them and tell them to STOP!

Kids and Money

My blog today is more a question that each of us has to answer for ourselves.  Why do we feel the need to give our kids everything they want and more?  I wrestled with this for my son’s first year and a half or so.  I thought that I needed to show him my love by buying and also make up for the time I was at work.  Then I started to really pay attention to why I was buying?  It turns out I was buying for me not him, so I just stopped.  It was really hard at first, but eventually it just because part of life.  Not saying I don’t buy him stuff, just not on a regular basis. 

Plus is it good to spoil our kids?  I really do not believe it is.  First they begin to expect it, it does not replace quality time with us and then when they do eventually leave our homes they have a big misconception about what money buys and brings you.  I could probably keep going with how it is bad, but that is enough for now.  Ultimately I think everyone should to stop and think about why they are buying stuff.   Why are you spending money on your kids?  Do they need it or is it to appease your emotions?  Is it to avoid a fight?  Is it worth it?