Tag Archives: Family Spending Plan

Hoarding: Finding Treasure in Your House [and Inbox]

Are you a hoarder? I don’t mean with pots of gold or stacks of Benjamins  in your house. What about your rebates, Groupons, Living Social purchases, dividends and other financial gifts? Is your entertainment or shopping budget under attack?

Gift Cards Spa Pass Museum PassIt’s October, so now is a great time to look around your home for some of the following items you may have forgotten about. Do you buy these and then forget to use them? Or do you buy things like this because they are ‘such a deal’, and then have no time or inclination to use them at all?

Gift Certificates: Did you receive a gift certificate to a very nice Seattle restaurant as a thank you from someone?

Gift Cards: What about those gift cards you received at holiday time? Have you used them yet? They are not as apt to expire now or have annual or monthly fees attached to them, as in years past. As an example, when I went shopping for a basic wardrobe item – a new cardigan sweater. I realized that I had a gift card that would lead me to a new sweater. (I also shop at consignment stores but this one was from Christmas, so it needed to be spent). I found one marked down 40%. Whew-a definite bargain. If I hadn’t remembered the gift card, I might have spent cash unnecessarily.

Day Passes for museums and attractions: Looking for a new place to visit on a rainy day, or to take visiting relatives? What day passes do you have in your possession that you may have forgotten about? Oops, I have one for the nearest science museum that’s been posted on my fridge for awhile. Will they still accept it? Better find out soon. The Burke is the local holder of some cool mammoth tusks.

Auction/Pledge drive items: Here are some auction items that I have paid for and not used:

Sit in on a local public radio show for two hours and watch the hosts at work.

Guest DJ at the local national award-winning dance radio station (run by high school students).

Salsa party night for 10 at a nearby ceramic painting studio-sigh. Maybe they are not all expired…

Deal of the Day sites. Have you ever bought a class, or a one night wonder event, or a discount gym membership from one of these? Mine was towards a Red Cross certification that I usually get for free. Not my smartest purchase.

I’m curious about why me and others might not use things like this immediately. Are you forgetful; do you think you ‘shouldn’t’ use these gifts; or is linked to the thrill of the hunt instead?

Since the fourth quarter is upon us (I won’t yet mention the names of all the holidays approaching), take some time for yourself and enjoy a past purchase or discovered treasure; or prepare to share ‘found’ items so that others can enjoy them!

Are there past shopping and bidding treasures in your house or inbox?

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Family Lessons about Money – Layoffs

This post was to align with the America Saves Week (#ASW2015) day for family communication and financial education. Gather the family around the virtual campfire and prepare for the conversation of your life. Now is the time to let go of any family taboos around discussing money.  This is especially true if you have children living at home. You can adjust your talking points, depending on the ages of your children, but you need to be in on this as a team. Before we get to the five things, two suggestions for framing:

Your Family - Working Together!

Your Family – Working Together!

  • Be truthful-mom or dad is going to lose her/his job and we have to prepare for that soon.
  • Be reassuring – mom or dad will be getting a new job after that, and we need your help now to get there.

You could also set up the discussion and introduce some crucial concepts like this: “In our family, we have needs and we have wants. Our needs include food for everyone (we won’t forget our pets!), a roof over our heads (explain the difference between rent and a mortgage to older kids, be more abstract with younger ones), paying for the heat, lights, phone and Internet service, child or after school care that allows parents to work outside the home, and transportation to get family members where they need to go. We will keep our health insurance so everyone can stay well and get their teeth cleaned.”

Wants will be different from family to family and be prepared to give examples at the campfire. High-speed Internet may be a legitimate need for business purposes, but several sports channels are going to be in the want column, unless you’re a sportswriter. Adults and kids can make changes in different ways.

As Benjamin Franklin might have said, the following three activities revolve around being healthy, wealthy and wise.  I’m adding two more intangibles: go actively towards the next destination, instead of away from what you’re doing now, and be sure to use your own roadmap.

Health: Know what you’re up against!  Is health insurance part of your severance agreement? Do you have severance? Tip: If your last day of work is early in the month, your group coverage usually extends through that month.  So a last day at work of May 1st is better than April 30. Post-layoff choices could include COBRA, a group plan through your professional organization or union, a family policy from your state’s exchange (using the Affordable Care Act) or going without coverage. Going without health coverage could derail your family finances in a hurry if an emergency comes up. If a large layoff is rumored or several months out, immediately catch up on any work-related reimbursements for transportation, child care, parking or flexible spending accounts (FSA).

Tip: Make those routine appointments ASAP.

Wealth: Do you have at least nine months of income or expenses set aside? A year or even 15 months of expenses would be better, or a working spouse who can supply the income and benefits to cover you or your family as you move forward. List all loans, debts and upcoming fees and rank by amount and interest rates. Two schools of thought on retirement deferrals: Keep making the minimum contribution to get the company match—the thought being that it might be awhile before you can resume contributions; or cancel your salary deferral in order to boost your emergency fund or pay off debt. Paying off debt will require some serious family discussion. What makes you feel more secure—a larger rainy day fund or less debt?  Can you stop adding to any debts, and reduce credit card use while you prepare? If so, move forward with that. here is a link to a free budgeting tool.

Tip: Automate all minimum payments so that your credit history is not harmed.

Wisdom: How well prepared are you to meet the intellectual and emotional challenges of being laid off and seeking new employment? Who will be on your kitchen cabinet, helping to advise you as you move forward? What about that LinkedIn profile? What about certifications, or continuing education? Can you use a tuition reimbursement benefit? Who will be part of your new work community? (Check out local co-working spaces for some ideas).

Tip: Create a family gratitude list, so you can keep in mind the non-material riches you already have.

Embracing the Hunt What are your strengths? Create a list of what your preferences are in a career, (often harder than the deal breakers) to leverage those in the next position. Do you have a side job that is begging to sit at the grown-ups table? A friend of mine is tired of teaching, but she is a talented quilt designer.  Perhaps that is her next career.

Tip: A good career counselor can save you lots of time.

Roadmap Draw your own! I cannot stress this enough. It’s ok to have a tour guide though-that means you can ask for help. A map made for someone else can be seductive.  But your brother-in-law’s map may not work for you.

Does this map belong to your family?

Does this map belong to your family?

As George Harrison sang, “If you don’t know where you are going, any road will get you there.”

Your next position has to come from what is best for you, so that when you are stuck at the side of the road, whether in Tacoma, Toronto, or Timbuktu, you have created a map to the best destination for you and your family, after the layoff and beyond.

Note: An earlier version was published on Nerdwallet’s Advisor Voices page.

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How Do I Love Thee (Post Valentines Day Edition)

How Do I Love Thee? On Paper, Online and On Time

In life and in death, let me count the ways that I love thee.  Let’s review the beneficiaries, the online accounts, and the papers.

Rosemary is for Remembrance

Rosemary is for Remembrance. Wikimedia

To paraphrase Meghan Trainor, modern philosopher:

It’s all about that signature

It’s all about survivorship

It’s all about that heir, no trouble.

When you love someone, you are told you should have “your affairs in order”.

This is much harder to do than say. What affairs, what is order?

When you have a family, you want to look ahead into a future where you may not be in the picture.

“Yikes, this means I have to pretend I am dead; that makes me uncomfortable and I’ll just hope nothing happens.”

It’s going to happen, trust me. Photo credit: http://www.pdpics.com 4211

This is a common reaction, due to your present, your past or reluctance to look too far into that uncertain future. I have met many people who think that they don’t need to consider these things, because “they don’t have any assets”, “they don’t have any children”, or all they have are the photos on their Facebook and Instagram pages. But you do, you do! You have your organs, your online life and photos, and your entire financial life to care for and secure.

You may have missed the opportunity to send roses or a sentimental card this past weekend, but here are several steps to take in this next week, to say “I love you” to those special people in your life. I’d like to help you move into action!

On paper: Check your retirement plan beneficiaries at work and for your personal retirement accounts. Do the beneficiaries match up with your current sweetie and family? Just sayin’. By the way, for those of you with older pension plans (could be frozen, or discontinued), check those too and keep a copy of the beneficiary page.) You can keep a paper copy, scan or photograph, then store in your cloud somewhere.

Real life story: This just happened to a friend-her husband hadn’t updated his old pension plan documents when he got married. When he passed away suddenly in 2014, his cousins were still his beneficiaries, not his wife. These cousins were sympathetic, but not all relatives would be as thoughtful.

It is important to create, review, or update important documents (will, power of attorney, health care directives) before any major life transitions. This probably also applies to people who take part in extreme sports, marathons, and those races in the mud. If you are in the military, they will place you in a workshop with your significant other to cover many things like this before deployment.

Online: However, online access may still be a problem. In real life, (IRL) your loved ones do not have the access to your emails, online accounts and photos that spammers or identity thieves do. In the Terms and Conditions of our online accounts, there is usually a line or two which explains this privacy policy. Google has tried to fix this with their Inactive Account Manager, and just last week Facebook offered the opportunity to set up a Legacy Contact after your death is proven. Yahoo Japan launched a service to manage your digital profile after you die. https://ending.yahoo.co.jp/ See if you want to set up one of these contacts.

Real life story: http://cnet.co/1Mn3RPO Yahoo denies family access to dead Marine’s email.

 On Time: This has to do with matching your documents and decisions to your actions. Wedding coming up? Do you need to alter your current will and property distribution? Would the laws of your state (and your family) allow your loved one to make medical decisions for you and visit you in the hospital?

Real life story: a relative with a terminal illness lived into the last month of his car loan, so his wife didn’t have to  worry about that last payment. This relative also hadn’t changed two pieces of property to be jointly owned with his [second] wife, so altering those property deeds occupied some stressful hours of his last days.

Love in a box, or a document, or in your will...

Love in a box, or a document, or in your will…

PS For those readers who may have several kinds of pensions (military, Social Security, employer plans), it is important to check the pension payouts with your spouse. For example, will you choose a single life or joint and survivor payout? A single life payout goes for one person’s (the retired employee) life. A joint and survivor payout is calculated over the joint life expectancies of the couple. It is usually less than the single life payout, but it provides a lifetime income for the survivor. See definition of joint life payout from Investopedia here.

If this post inspires you to take action, from creating new documents to reviewing existing ones, you will feel better afterwards. It might feel uncomfortable at first, but the relief generated upon accomplishment will feel wonderful. Plus, your family members will thank you for remembering them.  Get from To-Do to To-Done! (Shout out to https://transmutable.com for my first To-Done experience.)

Related links

http://organdonor.gov/index.html 

http://www.usa.gov/topics/money/personal-finance/wills.shtml

http://www.nlm.nih.gov/medlineplus/advancedirectives.html

http://www.investopedia.com/terms/p/powerofattorney.asp

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Filed under Be Prepared, Everyday Financial Tasks, Life and Death

Spending – It’s Handled

How do you handle your spending? Is it an aimless stream of expenses, or do you have a plan for each month and year? Sometimes  a budget is hard to follow, especially if it is inspired by a particular event, such as a move, a raise or a layoff. Or, as happened to me once-it was someone else’s idea that I have a budget. First: words matter. I prefer the term spending plan, as I think when you are planning your spending, it implies more forethought and care for yourself. Be proactive!

The hardest part for people is to record all income and spending. No, I am mistaken – the income part is usually easier than the spending. When recording income, include wage income, as well any other sources along the way (rental income, refunds, rebates, gift cards, checks from any side gigs etc.).

Now, you are ready to record your spending (you can use online tools such as mint.com) or check your bank or credit union-they may have a free online solution already integrated into your accounts. Or use a notebook, a napkin or your bank statement. Low tech is better than no tech.

Stop and review your spending first.

Stop and check your spending first.

Which expenses are fixed? These may include rent/mortgage, insurance, tuition, commuting costs (tolls, parking, gas), groceries, utilities, loan payments (student loans, car payments, minimum on your credit card bills, if any), tax withholding, child care, pet care or babysitting costs, condo fees.

Which expenses are variable? These may include eating out, any phone/internet/cable costs above the basics, paying extra on any loans or credit card bill, clothing, gifts, personal care, charitable contributions, and entertainment. How do you handle vacation spending?

Next, look at some ratios and categories more closely: Continue reading

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Is a Layoff in Your Future? 5 Steps to Take With Your Family

Gather the family around the campfire and prepare for the conversation of your life. Now is the time to let go of any family taboos around discussing money.  This is especially true if you have children living at home. You can adjust your talking points, depending on the ages of your children, but you need to be united on this.

I’ve been answering questions over at www.nerdwallet.com for the last three weeks. This post is from an article by me published in their Advisor Voices section last Friday.

Before we get to the 5 things, two suggestions for framing:

  • Be truthful-mom or dad is going to lose her/his job and we have to prepare for that soon.
  • Be reassuring – mom or dad will be getting a new job after that, and we need your help now to get there.

You could also set up the discussion and introduce some crucial concepts like this:

“In our family, we have needs and we have wants. Our needs include food for everyone (we won’t forget our pets!), a roof over our heads (explain the difference between rent and a mortgage to older kids, be more abstract with younger ones), paying for the heat, lights, phone service, child or after school care that allows parents to go to work outside the home, and transportation to get family members where they need to go. We will keep our health insurance so everyone can stay well and get their teeth cleaned.”

Wants will be different from family to family and be ready to give examples at the campfire. High-speed Internet may be a legitimate need for business purposes, but several ESPN channels are going to be in the want column, unless you’re a sportswriter. Adults and kids can make changes in different ways.

A New family activity-making the dollar go further

New family activity-making the dollar go further together.

As Benjamin Franklin might have said, the following three activities revolve around being healthy, wealthy and wise.  I’m adding two more intangibles: go actively towards the next destination, instead of away from what you’re doing now, and be sure to use your own roadmap.

 

Health: Know what you’re up against!  Is health insurance part of your severance agreement? Do you have severance? Tip: If your last day of work is early in the month, your group coverage usually extends through that month.  So a last day at work of May 1st is better than April 30. Post-layoff choices could include COBRA, a group plan through your professional organization or union, a family policy from your state’s exchange (using the Affordable Care Act) or going without coverage. Going without health coverage could derail your family finances in a hurry if an emergency comes up. If a large layoff is rumored or several months out, immediately catch up on any work-related reimbursements for transportation, child care, parking or flexible spending accounts (FSA).

Tip: Make those routine appointments ASAP.

Wealth: Do you have at least nine months of income or expenses set aside? A year or even 15 months of expenses would be better, or a working spouse who can supply the income and benefits to cover you or your family as you move forward. List all loans, debts and upcoming fees and rank by amount and interest rates. Two schools of thought on retirement deferrals: Keep making the smallest contribution to get the company match—the thought being that it might be awhile before you can resume contributions; or cancel your salary deferral to boost your emergency fund or pay off debt. Paying off debt will need some serious family discussion. What makes you feel more secure—a larger rainy day fund or less debt?  Can you stop adding to any debts, and cut credit card use while you prepare? If so, move forward with that.

Tip: Automate all minimum payments so that your credit history is not harmed.

Wisdom: How well prepared are you to meet the intellectual and emotional challenges of being laid off and seeking new employment? Who will be on your kitchen cabinet, helping to advise you as you move forward? What about that LinkedIn profile? What about certifications, or continuing education? Can you use a tuition reimbursement benefit? Who will be part of your new work community? (Check out local co-working spaces for some ideas).

Tip: Create a family gratitude list, so you can keep in mind the non-material riches you already have.

Embracing the Hunt What are your strengths? Create a list of what your preferences are in a career, (often harder than the deal breakers) to leverage those in the next position. Do you have a side job that is begging to sit at the grown-ups table? A friend of mine is tired of teaching, but she is a talented quilt designer.  Perhaps that is her next career.

Tip: A good career counselor can save you lots of time.

Roadmap Draw your own! I cannot stress this enough. A map made for someone else is seductive.  But your brother-in-law’s map may not work for you.

As George Harrison sang, “If you don’t know where you are going, any road will get you there.”

Your next job has to come from what is best for you, so that when you are stuck at the side of the road, whether in Tacoma, Toronto, or Timbuktu, you have created a map to the best destination for you and your family.

Related Links

Boeing Managers say transfer of engineering jobs damaging talent and morale

 

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Filed under Be Prepared, Debts, Family Lessons About Money

Obamacare and You: Subsidies

A special section on the ACA (Obamacare) was published in my local newspaper on September 22nd and has valuable information for Washingtonians and others.

For the moment, let’s set aside the economics debate about whether subsidies create disincentives or not. That is not my concern now, nor does it need to be yours. This post is aimed at people who have waited for Obamacare so they can use it! (not discuss it in a theoretical fashion) 

English: Barack Obama signing the Patient Prot...

English: Barack Obama the Patient Protection and Affordable Care Act at the White House (Photo credit: Wikipedia)

This post wants to share the facts and then you can make an     informed decision, get health  coverage, and maybe save some money along the way.

One valuable section of the ACA allows for subsidies:

If you make up to $45,950 ($94,200 for a family of four) you may get a subsidy that will decrease your premiums, or even allow you to trade up for better coverage while using the subsidy.

Some of us will just be happy to save a few bucks per month to apply to our increased deductibles. I’m not blaming the ACA for that change -the $250 annual deductible (as recently as 5 years ago and fondly recalled by me) is insurance history. Good news: there is dental coverage for children under 19. Bad news:  adult dental coverage was excluded  from the ACA, so those of us with previously bundled dental coverage will have to shop outside the exchange for dental (will it be more expensive?)

However, people who earn less than a modified adjusted gross income (MAGI)  of $45,950 per year may very well immediately reallocate any savings  to other parts of their budget. Deductibles, groceries, retirement savings.  This could be good for our collective economy.
Here is one link to a subsidy calculator that anyone from across the country can use. The calculator shows prices for a ‘Silver’ plan, there are also Bronze, Gold and Platinum plans. I didn’t see a Platinum plan for my state yet, but that may change.

If you receive a subsidy how will you use the money you save? Will you trade up in coverage? Will you be getting coverage for the first time?
Please tell us in the comments.

Related articles

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Walden on Wheels #1 : Vanquishing the Debt

Wipe our Debt

Wipe our Debt (Photo credit: Images_of_Money)

$32,000 in debt after 5 years of college. For a certain age group among us, that probably sounds laughable. Not that any debt is a laughing matter; but it could be so much worse. Why – I haven’t met anyone with a “Craftsman house-sized student loan debt” since this morning.

One year’s tuition, room and board borrowing can easily run between $26-$52,000 in the 21st century. The average student is graduating with $35,200 in debt in 2013.

The book Walden on Wheels, is one man’s story of debt freedom. I will divide the story into two posts-how he discharges his undergraduate debt and how the author pays for graduate school. I am not sure most of us could do what he did, as it involves three difficult accomplishments:

  1. Delayed gratification
  2. 99% less spending and embracing isolation to do it
  3. Severe behavior modification

The hero of this story (author Ken Ilgunas), begins in a Puritanical place:

“I didn’t see work-at least my line of work as a virtuous undertaking. Rather I saw it as nothing but a penance for my sins, for the profligate decisions I had made as a clueless eighteen year old…To make the best out of a bad situation seemed like an act of resignation. Instead I embraced my bitterness and hatred and ungratefulness.”

In order to direct his dollars from a new job in Alaska (in Coldfoot), Ken adopts the idea that his debt is “a villain that needed to be vanquished”.

“I bought nothing and kept nothing in the bank. I squealed with pleasure when I tortured it [the debt] with payments, like  a sadist plucking legs from a captured mosquito.”

The Happiness Project, this book is not. Or is it? You tell me.

In various, low wage, isolated jobs, Ken goes about reducing his debt-the book chronicles his success job by job, while contrasting his situation with his good friend Josh, also in debt for his undergraduate education. Josh’s nut is $66,000 however.

Would you give up salon haircuts, all your “electronic gizmos”, new or ‘new to you’ clothes, shopping, the gym and isolate yourself at a minimum wage job in the middle of nowhere to meet your goals? PS he had free ‘room and board’. I think many of us wouldn’t be able to do this, but it is a mesmerizing tale. There might be a technique, or a mind-set, or a tale in this book that will inspire you!

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Pro Athlete Losses Part 3 (updated 4/2014)

In 2013, I wrote two posts on professional athletes handling their money poorly. Thanks to Nerdwallet.com, where I have begun writing on their Ask an Advisor platform (I am not compensated for this), there is finally a good story to read. Nerdwallet interviewed Eric Sogard of the Oakland A’s.  Eric and his wife work with a CFP(R) financial planner. Since joint the MLB, their big splurge on his $510,000 annual contract was a beagle for $1700, purchased at the mall. Plus a house. (not from the mall, I presume)

Eric’s salary is $10,000 over the MLB minimum for 2014, as he is not yet eligible for salary arbitration. In 2013, the average salary was $3,386,212. For those who do not know, players are eligible for salary arbitration after year 3 and before year 6 in the League.

 

A-baseball-hi.public

Here is the piece fromNerdwallet.  Written by on April 2, 2014

“The face of major league baseball wears glasses? That was very nearly the case when, over the winter, the Oakland A’s bespectacled second baseman Eric Sogard finished second in an online fan poll for the #FaceofMLB—besting the likes of former league MVP Buster Posey. Not bad for a guy who broke into a regular starting role just last year.

Eric caught our attention at NerdWallet for two reasons: his wearing glasses gave rise to the nickname “Nerd Power,” and it turns out he’s a great example of a professional athlete who’s financially responsible. On the eve of the 2014 season, we chatted with Eric and his financial planner, Brett Dimas from OFS Wealth, about the lessons he’s learned about money, some of the first big purchases he made (including one pricey pup), and how he’s working today to set his family up for the future. “

 

NerdWallet: When you were a kid, how did your mom and dad first teach you about money? Do you remember your first money lesson growing up? Read more  Continue reading

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Bright Shiny Objects #2 Holiday Traditions or Shoulds?

What are your favorite holiday traditions? Do you go berserk each year trying to decorate or do you gather the family and enjoy a leisurely afternoon installing the decorations of the season? Wherever you land on this continuum, it might be time to check on the “we always do it this way” types of activities. Shoulds are not allowed in Santa’s pack!

Box of glass Christmas ornaments

Box of glass Christmas ornaments (Photo credit: Wikipedia)

From a financial perspective, these traditions are expensive, especially if it turns out nobody is that interested.  One way to tell if a change is needed is if you are the only one getting it all done. When measuring the cost, don’t forget to consider time, talent and treasure (money).

Travel: Do you travel for the holidays? Have you tried some alternative techniques, from taking the train instead of driving to offering to book a nice B and B (or Airbnb) for the visiting family members?

The Tree(s):  How many? Fake or real? Lie down for a nice nap and decorate the rosemary bush instead? Holidaze….

English: Shiny haws in Bulley Lane That remind...

English: Shiny haws in Bulley Lane That reminds me – must start the Christmas shopping. (Photo credit: Wikipedia)

Entertaining: Whether you prefer a bountiful dinner party, an  ‘Open House’ or gathering the clan together after a school concert, make a plan and set a budget in advance.

Gifts: many families organize gift giving around experiences, or gifting locally. Some make things at the do-it-yourself ceramic place, cook together, or offer to take someone else’s  kids out for an afternoon of shopping or the movies. Looking for gifts made just down the street ensures more of the funds stay in your community. Another strategy is to give everyone the same thing, from tickets to the local playhouse to down slippers or cloth napkins you made yourself.

Think about why you do certain things in December, and if they still bring you joy.

Will they bring family and friends together?

Could you have a low-key gathering on Boxing Day instead (12-26)?

Attend the live reading/playing of Handel’s  Messiah at church?

Can it involve recycling such as a ‘white elephant’ exchange or Bill Cosby sweaters?

Donate or do something for others in your community-or make time to do something special for a family, non-profit or school AFTER the New Year has begun.

Whatever your decision, and especially if you have a new household, be intentional about your traditions this year. You will enjoy them more and maybe even save a little ‘green’.

Gift Box

Gift Box (Photo credit: Maeflower72)

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Personal Budget or Plan? Words Matter

Words matter.

A picture is worth one thousand words.

It has been said that it takes from 4-7 positive comments to overcome 1 negative one.

How can we use these three statements to improve our spending habits?

If you made a visual spending plan and tried out new self-talk each month, would that make a difference? Might that keep you from derailing yourself? I challenge you to make it so.

For example, you could find a photo of your financial goal and place it in a prominent position-where you can see it every day.

  • Try a sign that says $500 savings balance/emergency fund. (save this in one year<$10/week!)
  • Take a photo of your full refrigerator-for someone trying to cut down on eating out.
  • Post an image of your public library card-so you have the visual trigger for downloading music, book reading or borrowing a movie from the library instead of purchasing  any of those items online. Or send yourself a text message to that effect!

I have three points here that go beyond the usual budgeting tips.

  1. How you talk to yourself about your spending matters
  2. Use visuals as well as words to make the point to yourself (and your family, if need be)
  3. Use affirming language, praise and encouragement to support your behaviors.

Instead of, “I wish I could pay my bills on time”, say to yourself, “When I pay my bills on time, I feel good and I will have more money to spend, because I won’t be paying late fees.

Instead of, ” I must have that new song from iTunes right away”, remind yourself of your online music spending plan, and figure out if you have the funds this week. When you match up your plan with your spending, it is a powerful feeling and you can reinforce it. Oh-“I don’t have more money in that bucket this week, I’ll place this song on the top of the list next week”.

iTunes

iTunes (Photo credit: ʇhamin – free lancer)

Instead of saying to yourself, “I’ll add to my emergency savings account at the end of the month, or at the next pay period”, say,”I will send a sum each pay period to my emergency fund via direct deposit, so that I am able to meet small unexpected expenses without using my credit card”. Doesn’t that feel more powerful?

Save Money

Save Money (Photo credit: 401(K) 2012)

When you do something right, affirm that behavior in your head and heart to reward yourself. It is important to acknowledge these smaller steps as you build new habits.

Say, “Wow, I did that”; or “It will be so cool to see my savings account grow”; or even, “I didn’t know that homemade sweet potato fries would be so tasty”.

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