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What Do You Think of When I Say “Thanksgiving”?

Did you say turkey? I bet a turkey or pumpkin pie or cooking was the first thought that popped into your head. Those pilgrims had no idea the fuss they were starting way back when they planned that first shindig! The advertising folks at Butterball and Sarah Lee have fully ingrained in us the need to cook that big meal and gather some people around our table. But beyond the hours of cooking and the big meal and the pies for dessert, have you given thanks for your financial blessings lately?

The idea for the post came up several weeks ago, long before I turned my calendar to November. I was lamenting to myself that my husband and I have seemed, for a lot of our relationship, to be in different financial cycles with our careers or companies – I had a job and he moved to Atlanta when we got married so he was job hunting. I left corporate America to be a stay-at-home mom while he made good on the corporate front. He left corporate to start a business, and I went back to work. “Why can’t we both be on the upswing at the same time?!

And that comment hit me like a bolt – “thank heavens that we haven’t both been on the downswing at the same time!” What an incredible blessing it was right there in front of me, and I didn’t even recognize it for what it was. A blessing that when he has been down, I have had opportunity, and when I have been down, he has risen up. And what if everything was a blessing? Every time that we had a bit extra saved up, what if it was in preparation for the dead battery, broken washing machine or root canal that we needed? What if my needs were actually being taken care of before I had the need or knew that I had the need?

All of life is in how we interpret the situation in front of us. We can lament incomes moving up and down or give thanks that we have counter-balanced one another. We can lament having to use our extra this month to fix that washing machine or we can give thanks that we had some extra to cover it and that we even own a washing machine! We can worry over rising costs or we can give thanks that we are participating in this great economic wheel that we call the American dream. Many people the world over would give everything they have just to come here and have a chance to own a washing machine.

What financial “laments” do you have that could be turned around and viewed as blessings or wake-up calls or opportunities? What financial blessings do you have that you take for granted as we all do? I’m pretty thankful for that washing machine! With 4 kids, I spend a lot of time with that little miracle and don’t ever pause to give her a little pat on the side and appreciate that I could be out in a stream beating my clothes on a rock if not for her magic! Speaking of, I do need to change the load now so I will leave you to give thanks for the wonders of everyday magical machines, financial blessings, and that big, delicious turkey and pumpkin pie that will be sitting on your table come Thursday.

To help you get in the Thanksgiving spirit, here is a Gratitude Assessment created by Darren Hardy (Success Magazine).

To your financial thankfulness as well as success.

Happy THANKSgiving!

 

Finish Strong!

We are well into the final lap of 2015 so it’s a good time to see where you are on meeting your goals and make a last push this month to achieve some things, wrap up some things, and get some things done before 2015 fades away. Here is a quick checklist of things that it may be helpful to review:

  1. Savings goals:

  • Did you fully fund any retirement plans at work? If not, can you up that contribution to get a bit more in there before year-end?
    • As you plan for the new “open enrollment” period, can you increase the contribution a bit to stash away more in 2016?
  • Have you got 6 months of income saved in a savings account or other low risk investment?
    • If not, organize yourself now to start putting away a bit more until you get there. You don’t want holiday spending to put you further away.
  • Have you contributed savings toward college savings accounts if you have children?
    • Are you encouraging your children to save for their own education?
  • How about funding Health Savings Accounts or IRAs? You do have until April 15th to get those accounts funded but you have to have the cash to do it so be sure that you are on target to meet those goals.
  1. Reducing spending:

  • Health care enrollment is upon us. Take a close look at your plan options and make sure you are maximizing your plan.
    • If you did not meet your deductible this year, consider raising it for 2016. A higher deductible will result in lower premiums. Take a little time and analyze what you spent on medical costs during the year and what your plan covered. Compare that to other options out there.
    • Speaking of health care, have you gotten your annual physical, pap test, mammogram and other health screenings? (oops, I need to schedule my mammogram!) Take the time to take care of your health. You can’t take care of your family or your job if you are sick.
  • Take a look through your credit card statements for auto-debit items. Do you read those magazines that you are subscribed to? Could you reduce your TV package? Do you go to the gym? What is lurking that you may have cooled on? I am going to cancel a membership that I am just not using. Even $16/month adds up over a year’s time.
  • Have you looked at your home and auto insurance lately? Are your coverages appropriate? Could you raise the deductible in order to reduce the premium?
  1. Status check:

  • Life insurance – do you know when your term expires on any term policies? Buying a 20 or 30 year term policy back in your 20’s means that those term expirations are creeping closer. You will want to get new coverage in place as that date starts to get near (I would investigate it at least 6 months prior to an expiration if you still need insurance coverage.) You can also ask about conversions to permanent insurance if your policy allows it. This is a consideration if you may not qualify for new insurance due to health considerations.
  • Do you have credit card points accumulating somewhere? Last year at this time, I realized I had a lot of “points” stacked up on my card. “I don’t want to buy a bunch of over-priced stuff,” I thought. Whoa – I found out I could also buy cash back to my checking account or as payment on my credit card. I got a hook-up by using those points at holiday spending time and I now watch them like a hawk to redeem as soon as I can.
  • Have you completed any charitable giving that you plan to do? That deadline is 12/31 so you will want to make your donations now. Look for coat drives, blanket drives, clothing drives or just round up your household items for donation to any of several great organization. Keep an accurate list of what you donated and find the “thrift shop” value in order to get your tax deduction. You DO need a receipt from the organization.

With the holidays coming up, now is the time to check in on a few of these areas so that you can finish 2015 with goals met, plans made, and ducks in a row. Nothing says Happy New Year like finishing this year strong.

To your financial success

A New Money Attitude in Four Steps!

Well, we crossed the half year mark last week. At this time of year, I like to stop and reflect on how it is going with my goals. January seems a long time ago and many, many things have come up to take my eye off the goal. So how are you doing with your financial goals? If you aren’t happy (or you didn’t set any financial goals!) then let’s turn it around.

 

A few weeks ago, I talked about the language that I use around money and financial topics and that ties in directly to uncovering your money attitude. If you didn’t get a chance to read that, take a look, and then think about your own attitude. Sometimes there is emotional and mental money clutter that may be holding you back or weighing you down so as you look at setting and achieving your money goals, let’s also look at 4 steps you can take today to sweep out some of your emotional money baggage and get your financial goals moving forward.

 

  1. Tell the truth – to yourself and your spouse

Now is the time to ‘fess up and get it all out in the open. If there are bills and credit card balances, let’s pull out those statements, log in to those accounts, and face the truth. You can’t get to where you want to go if you don’t know where you are. Admitting to mistakes and short-comings is the first step to healing, redemption, and a new action plan.

  1.  Take responsibility for where you are

As you look at your savings accounts and your debts, you just have to own where you are and what the situation is. Even if the other person did the spending, you did the avoiding, the looking the other way or the abdicating of responsibility.  If you didn’t take an active role, at least monthly, in reviewing and monitoring spending, account balances and debt, you abdicated, avoided or denied.  You are still responsible for your inaction.  If you fell asleep in the backseat, don’t blame him that you woke up in Canada when you wanted to go to Mexico!  Wake up!  Look at the map!  Help navigate!

 

This applies even if you are single. You chose to look the other way when the statements came or when the savings didn’t happen. You chose not to actively make a plan for your financial life and you just “let it happen.” You got in the car and just started driving without a map or destination in mind. That was then, and now you are awake and alert and ready to…..

 

  1.  Forgive

Forgive yourself for mistakes, bad judgment, ignorance, apathy, spending, ignoring, avoiding, materialism, greediness, and other grave financial sins.  Forgive your spouse for all of the above.  To paraphrase Maya Angelo, when you know better, you do better. You may not have paid attention in the past but today is a new day! Now you are ready to turn it around and seize control. You cannot move forward if you are anchored to past mistakes, so LET IT GO!! Forgive and…

 

  1.  Change your perspective  

There is no more blaming – you and your spouse are one economic unit.  You both have equal responsibility for your financial health and well-being.  Instead of seeing your spouse as trying to control you, limit you, or take away from you, view your participation and “frugality” as a gift that you give to the person you love.  There is no greater gift than financial peace-of-mind whether you have a partner or not.  Everyone should be determined to chart their financial course, define their ideal financial life, and create a step-by-step plan to move toward that life.

 

View a spending plan as a framework for helping you get everything that you ever dreamed of and a way of eliminating all of the “trash and trinkets” that are taking away from your big dreams. Start seeing the shiny objects that are vying for your attention (and your money) as obstacles to what you truly want and create a plan to get those things out of your way so that you can focus on the big dreams – a home, travel, financial security – whatever the most important aspects of your life may be. Make a plan to fund the big goals, be willing to save for them, and have the determination to continue to move slowly, step-by-step, month-by-month, little-by-little toward them.
Then What?

These 4 steps are not “one and done.”  It’s not “paint the house;” whew, that’s done for 5 years.  It’s the laundry; it’s done for today but tomorrow or the next day, sweaty, smelly clothes will reappear. You can’t avoid the truth, the responsibility, the forgiveness, or the change in perspective any more than you can ignore those nasty workout clothes.  If you do, you get the same result – a big smelly mess!

 

Understand that there will be mistakes and missteps so frequently tell the truth, accept responsibility, forgive, and think about the new perspective of embracing opportunities to save for the big, important things and push aside the little distracting things. Keep looking for those tips and tricks to save here and save there and keep revising, reviewing, and revisiting the plan. Old habits die hard so be gentle on yourself and your spouse and try, try again. Saving is a process that happens over time. Changing behaviors, habits and attitudes is a process as well. If you keep at it, you will find yourself with a healthier savings account and a new money attitude before you know it.

 

Let me know how you are improving your money attitude.  To your financial success!

Changes and Rearrangements

Last week, we looked at your balance sheet and found out exactly where you are financially.  Now it’s time to think about how you feel about your situation and what changes you might like to see in your net worth.

Assets:

How comfortable (or not) do you feel about the amount of cash and money market savings that you have? How many months of expenses could you cover if something happened to your income? How safe do you feel with the amount of cash you have available?

If you have less than 6 months of expenses, you might want to consider creating a plan to bump that up. There is always something going on that gobbles up our excess cash – this time of year, it is graduation and end of school events. Then comes vacation time, and back to school and the holidays. Always something. Is there one thing that you could cut back on to squirrel away a bit extra each week to put toward savings? For example, if you usually get $60 in cash each week, could you just get $40 and move $20 to savings? That is a small thing but probably doable. The point is, nothing changes unless you have a firm action that you can change, in this case, the amount of your weekly ATM draw. What could you change to increase this area?

If you have well more than 6 months of expenses, perhaps you should consider converting that to an investment so that you have the potential for some investment growth. What is holding you back from putting some of your excess cash to work?  If having more available cash makes you feel better or if you feel that your income may be at risk, then holding on to cash makes sense. The point is to have a plan for how much you need and why.

As you look at the other assets on your balance sheet, the main question is how you feel about what you have. If you are heavy into illiquid investments, be sure that this is your intention and that you are comfortable with that situation. How about retirement accounts? Do you feel that you are on track?

Regardless of your answers, ask the questions and think about what changes you would like to see in the composition of your assets and the growth of your assets and make a plan to move in that direction.

Liabilities:

Take a look at your short-term liabilities – credit cards mostly. How do those numbers make you feel? Are there balances there that you would like to be rid of? I don’t like having debt but when I get interest-free financing on things like furniture, appliances or car repairs, I take it. I make sure I pay it off well within the defined period but seeing that balance still makes me uneasy. How does seeing a debt number make you feel? Would you be willing to “rearrange” some of your monthly spending to pay more on the outstanding balance?

Do you know how much that debt is costing you annually? Take a look back at your statements and see the amount of interest that you are paying. Could you make a plan to get that debt paid off? Again, “a plan” means a specific action, (“I will not eat out on Friday nights anymore and instead put what I usually spend toward this debt”) that you can perform weekly or monthly. You have to change your behavior to make your balance sheet change.

What about long-term liabilities?  How does that make you feel? How important is it to you to be debt-free? It can become a reality if you make a plan for it to happen.

Net worth:

This is just the difference between assets and liabilities and indicates basically how much of a safety net you have created for yourself. The point of looking at this, and at the individual components that make it up, is to empower you to consider where you would like to be, what makes you comfortable, and take action to implement changes. By changing a few habits and making a few changes, you can make a change to increase your assets, reduce your liabilities, and increase net worth.

It is always within your control to move in the direction you want to go. Make a decision to create change and you will!

Spring Clean Your Finances

Spring cleaning was an annual event at my house when I was a kid. The whole family had to dedicate “as much time as it took” on a Saturday to clean the house, top to bottom. I hated the process but I have to admit, it gave me such a feeling of freshness and renewal. That spring tradition has been lost for a lot of us, but I think it is worth resurrecting for our financial houses.
Taxes have been filed which is a good trigger for gathering our financial paperwork from the prior year and getting it stored in the archives. Here are some ideas for some spring cleaning:
• Organize all of your tax return receipts with your tax return. Get an oversized envelope, label it 2014 taxes and store it with at least the prior 6 years of returns.
• Go through any old statements that you have accumulated through the year. If you want to keep copies, considering scanning everything to a thumb drive and storing it with your tax return or put them all in an oversized envelope, label it, and store somewhere out of the way.
• For those old bills, statements, and notifications that you don’t need, be sure to shred them. My policy is to shred every piece of paper that has my name on it.
• Look through all of your electronic files and delete those that are no longer relevant. For everything else, create a backup copy, slip it into an envelope, label it, and store with your tax return. That is an easy, year-by-year way to store backup copies.
• Set a calendar reminder to back-up your computer at least once a month. I use an external drive so that it is big and easy to find versus a small thumb drive. Regardless, store it in a safe place so that all of data doesn’t find its way to school as part of your child’s history project.
• Set up your tax files for 2015. My firm created a really nice expandable file with labeled tabs for income, investments, charity, business, etc. but you can use any filing system that works for you. The important thing is to keep all of those receipts organized in a way that is easy to use and will make preparing next year’s return a snap.
• Make sure that you reconcile your checking and savings accounts to the bank at least every couple of months. I do find things that I missed even with my Quicken download process so take the time to clean up your accounts and make sure you know where you are.
• What else in your financial house is a bit messy? Make a plan to do some spring cleaning in that area as well.
Cleaning up, getting organized, and managing your financial house will give you a sense of accomplishment and control. It doesn’t take that much time – even spending 5 or 10 minutes a day will move you forward. Once it is done, you will be glad you did it.

Until next week, here’s to your financial success!

Money Stress!

There is no stress like money stress. The anxiety, fear, or dread that you feel when your money world is out-of-whack is the most uncomfortable and frightening feeling! It connects deeply to our survival instinct and our need to feel safe. But it also taps into our social fears: what would others think? I must keep up with the family, friends, or self-perceptions of success. Then there are the constant stream of “should’s,” “must’s,” “need to’s,” and “should have’s” that haunt our thoughts and disturb our dreams.

Very few people are perfectly comfortable in their money world. There are some, of course, and if you are one of those folks, I applaud you and want to be you when I grow up. If you aren’t one of those people and money stress is a reality in your world now, hang with me, and let’s create a plan to cope with that stress today.

  • Face the truth
    1. Write down what you have and what you owe and when you owe it,
    2. Come clean with your spouse about anything that needs to come out of the closet,
    3. Forgive the past and take positive action today.
  • Identify and define clearly where you want to be: debt-free, have savings of $X, earn $Y, etc.
    1. Be very specific about one thing – just one thing. It might be one credit card bill, one expense that you can eliminate, or one savings transaction.
    2. Write it down! Put it where you can see it, reflect on it, and absorb it.
  • Make a plan to get there.
    1. For example, if you have a savings or debt-reduction goal, you have to identify a specific way to make that goal happen. “I will only take out $40/week in cash rather than $60 and I will transfer that $20/week to my savings account/credit card.” That is doable; that is action.
    2. List all the things that have to happen – change the amount of the ATM withdrawal, transfer the money (when? Weekly? Monthly? How do you do it? Online? At the ATM?)
    3. The more specific you are, the more real it becomes and the easier it is to do it.
  • Take small actions every day to execute the plan
    1. We want the grand “fix” but that isn’t usually possible – many small steps will take you anywhere you want to go!
    2. “5 buck” your way to success – put down the 5 buck item and put 5 bucks in your savings account. Little amounts add up to big amounts when repeated frequently. It happens at the grocery store and it can happen to your savings account.

 

Knowledge is power so face the truth and get clear on where you are. Knowing the ideal creates a vision; it creates hope – what is more powerful and uplifting than hope? Clarity on what steps need to be taken creates feelings of power and competence. And best of all, action kills fear. The action of getting knowledge, envisioning the ideal, identifying the steps, and taking action combine to start a transformation. Continuing to take a step, any step, in the direction of your vision increases your confidence and feelings of competence and eliminates feelings of fear and stress. It is that simple and that hard.

Truth * Vision * Plan * Action