Posts tagged as:

plan

Go Ahead, Be Selfish

by Jaime Thompson on September 24, 2010

nesteggWe teach our children to share, to find the joy in giving, and that the world doesn’t revolve around them. Just as we try to model the social behaviors we want our children to take into adulthood, financial ideas and habits start developing at a young age. Whether we are conscientiously teaching them or they are merely observing our dealings with money, they are learning.  However, I’m about to tell you to be selfish and teach your kids to do the same.

As parents we want the best for our children, but do we want to leave them with the financial burden of caring for us in our later years? We cannot sacrifice our retirement savings to “benefit” our children. I watch people put off their own retirement savings to put money in a college fund, pay for an extravagant vacation, or buy a new car, but who is going to pay your bills when you retire? Unless you plan on retiring in the next few years, the only thing you can be certain of is that the future of social security is uncertain. And with an enormous and continuously mounting national deficit we cannot expect the government to cover our expenses in retirement.  So assuming you are debt free and have a comfortable emergency fund, what should you do with the extra money you have each month?  First and foremost you should be putting money in a retirement fund. Yes, this means before you contribute to a college savings fund. If you work for a company that matches some of your 401k contributions, start there until you receive the full match (it’s free money!) and then put any other money you can into a Roth IRA*.  Once you maximize your retirement investments, then you can start putting money away for college.  Remember, your children can always get loans and scholarships to help pay for college, but nobody is going to give you a loan to pay your monthly bills in your retirement years.

*assuming you are eligible to contribute

(photo by scottwills)

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What’s In A Name?

by Jaime Thompson on September 18, 2010

Did you have a hard tinameme picking a name for your baby? Maybe you already have names picked out for your unborn children. What about your savings account? College fund? Vacation fund? Behavioral finance experts have found that earmarking your savings for a specific goal can have a big impact on your savings rate. In a 2009 study done by Amar Cheema and Dilip Soman, they found that labeling a college fund with a childs name nearly doubled how much was saved compared to those without a name attached. Cheema recommends opening multiple accounts and giving them labels to help motivate you to reach your goals. So, what will you be naming your savings account?

(photo by Vanderlin)

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Bed, Bath, Boundaries & Beyond

by Derek Sisterhen on July 15, 2010

My wife and I were in Bed, Bath & Beyond last weekend for a particular set of cups we’ve had our eye on for a while. The place was crawling with people (which usually bothers me – I don’t like to shop with 800 new friends), but I found myself observing them like little mice in a social experiment.

Did you know that you can get any kitchen utensil you could ever dream of at BB&B? There are even some utensils aliens probably dreamt about, because I can’t see any benefit of having them. Why would anyone need a lazy Susan for a cheese grater?

Pots, pans, cosmetics, sheets, pillows, fine china, crystal, shoe insoles, gourmet candy, and – wonder of all wonders – a 20-foot high wall of Tassimo beverage cartridges. Because making coffee with a filter is so last millennium.

What struck me as I observed the mice was the apparent randomness with which they shopped. Some stopped in the pots and pans, got distracted by the inflatable mattresses, and wound up in the smelly candles. Others made a beeline for bedding, only to later be spotted with the latest “As Seen On TV” contraption in their buggy.

When going into stores like BB&B, recognize that the marketing powers that be have studied the mice. There is a reason the bed and bath items are at the rear of the store: you have to go beyond everything else to get there.

Everything else that you didn’t know you needed (and that they’d love you to buy).

I always recommend having a list when visiting a grocery store. Boundaries aren’t a bad thing and a list provides them so you get what you came for and don’t wreck the grocery budget in the process. Now that so many of the big box stores are offering everything necessary to human existence – and alien existence, for that matter – setting boundaries with a list for these shopping adventures will help you avoid the mousetrap, too.

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You Don’t Need a Step-by-Step Plan for Your Business

by Justin Lukasavige on May 27, 2010

compassThe great thing about a step-by-step plan is that it probably worked for someone at one point so they wrote it down to share with you. As a coach, people come to me for a step-by-step plan to get their business running better. Many people are looking for a road map to follow in order to become successful.

But you don’t need a map…you need a compass.

Derek spoke recently on the importance of thinking for yourself, but received a lot of backlash on it.

Your Map is No Good

The great thing about a map is that you can follow it; but I guarantee your plans won’t work like you plan for them to work. Something will happen along the way and derail you. Then what? Your map is no good.

What you need is a clearly defined destination and a compass. Where do you want to be in five years? Yes, it’s very likely that will change, but without a destination you don’t know which direction to go. You’ll end up wandering and your business will fail.

Think for Yourself

Road maps are OK, but you need to start thinking for yourself. No one else is just like you so do what feels natural. Read biographies of people you admire. Listen to stories of people making it happen. Read books other than how-to’s.

What do you think is more helpful, a road map or a compass?

(photo by psd)

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Once upon a time, people would go to work for a company for many years, retire with a nice pension and health care benefits to last the rest of their lives. Once upon a time, kids could go to college without incurring mortgage-sized student loans.

The good ol’ days.

“Sandwich Generation” is the term used to describe the folks in our country with aging parents and children on the cusp of higher education. The squeezing effect – or sandwiching – sounds like the ringing of a cash register: aging parents may not be prepared to live out their lives financially and the expense of raising children and transitioning them to college can be overwhelming.

If you’re already feeling the squeeze, it’s time to buckle down. There are conversations that need to occur with both sides of the sandwich.

For aging parents, it’s time to get real about their financial and physical situation. Do they have enough cash flow for rising medical costs? Will they need to be relocated or require an assisted living arrangement? Would you (or a sibling) be providing some level of care – physical or financial – as a result? Should your parents’ ability to make clear, rational decisions diminish with age, who will step in to help?

For children on the verge of leaving the nest, it’s time to reveal the realities of life on the outside.

Do your children understand how a budget works? Do they have an accurate understanding of the cost of living? Kids know how much music downloads, clothes, and lunches at their favorite restaurants cost, but they might not know what it takes to keeps lights on, water running, and a roof over their heads. Have you set expectations for life after college? If your children return home, is there a timeline in place for them to move out on their own? What expenses will they be responsible for when back in the nest? Do they avoid taking on new debt?

Just because you’re caught in the middle doesn’t mean you’re stuck between a rock and a hard place. You can work out of the sandwich – start with some proactive conversations today.

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I joke often that, in spite of my degree in finance and career in the banking world, had I just read the Book of Proverbs I would have gotten a much better – and much cheaper – financial education.  In this series I’ll highlight a few key principles from Proverbs that you can apply to your finances today.

“Know the state of your flocks, and put your heart into caring for your herds,” is written in Proverbs 27:23.

Back when Solomon was writing Proverbs, flocks and herds were currency (which often makes me wonder how they made change for a sheep, but that’s beside the point).

There are two words in this verse that leapt off the page the first time I read them: know and care.

Know.  You have to know what’s going on with your money.  How you behave will reveal a lot about what you know of your personal finances.  Do you regularly balance your checkbook?  Are you creating a monthly plan for every dollar you earn and tracking where it goes?

John Maxwell said, “A budget is telling your money where to go rather than wondering where it went.”  When you know the state of your personal finances, you don’t have to wonder where your money got off to.

Care.  When you care about your financial situation, you honor and respect your most powerful wealth building tool – your income.  Stewards are those who manage the resources of someone else to the very best of their ability, even though they have no ownership rights.  Understand that you don’t own anything, but everything – from income to assets – is a blessing.

Caring requires attention and intention.  There must be a greater purpose for these resources, some larger goal to accomplish – whether retirement savings or giving to those in need.

Knowing demands your mind; caring demands your heart.

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Taking Stock of You, Inc.

January 28, 2010

It’s a new year and everyone is beginning to receive their W-2s and 1099s as the tax season quickly approaches. I was speaking just yesterday with a woman who said she looked at her W-2 and the first thought that crossed her mind was, “Where did all that money go?”
I talk at length with [...]

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Selling McDonald’s Hamburgers in a Burger King Parking Lot

December 15, 2009

I spoke with someone recently who said he felt like he’s selling McDonald’s hamburgers in a Burger King parking lot.
Does your life feel like that?  You might be doing the right things, but in the wrong place or at the wrong time?
You probably got there because you didn’t have a plan.  We’re at the end [...]

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Stop Planning

November 20, 2009

“Things may come to those who wait, but only the things left by those who hustle.”
- Abraham Lincoln
Planning is great, but I have a feeling it’s time for you to take action.  I don’t know what it is but you may have to jump into it.  Start your business, get out of debt, take your [...]

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This Year – Horrible or Outstanding?

December 30, 2008

As we head into a New Year that many people seem to be dreading, it seems to be a great time to talk about goals.
Michelangelo said “The greater danger for most of us is not that our aim is too high and we miss it, but that it is too low and we hit it.”
Is [...]

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