Is Your Lawn a Hot Mess?

beforeandafter1
beforeandafter1

One of the most effective ways to explain how money works with my clients is to share with them that your financial situation is a lot like a lawn. The questions you need to answer are 'Do you have a lawn that is well-manicured?' or 'Is your lawn a hot mess?' But what does that mean?

If you've ever seen the show "Curb Appeal" or even just driving around, you know that you have different and very distinctive reactions to a lawn that is well-cared for versus one that is overgrown with weeds. The lawn that is well-manicured features the green grass that is trimmed nicely, healthy and shapely shrubs, colorful, weed-free flower beds and a driveway and sidewalk that is edged and free from debris. This is the house you come home to and you want to enter to see more. There is something about this house that draws you in and makes you take notice.

Think about the opposite - the lawn that is a hot mess. The brown grass looks like you need to wade through it. The flowerbeds are over gown with weeds or nonexistent. There are leaves covering the driveway and bits of trash scattered on the sidewalks. When you come home to this house, you feel overwhelmed with the work that needs to be done. You have a feeling that it's probably more of the same mess when you walk in the door. Things just feel very chaotic. You definitely don’t want this house next door to yours.

If you have a money situation that is a hot mess, you may:

    • Feel overwhelmed by a stack of debts that need your attention (weeds)
  • May have overdue bills with late fees (overgrown grass and debris)
  • Have a checkbook that is in desperate need of balancing
  • Know you need a budget but haven't done one because you don't know where to start
LawnCare03
LawnCare03

Here’s the deal. That well-manicured lawn takes time. You need to have a lawn mower, tools, fertilizer, water, plants, experience, time, and vision! The other option is to hire someone with all that stuff and give it time to mature and develop. That lawn beautiful didn’t happen overnight! The same is true for your money. You need some tools like a budget, debt reduction plan, or check register. You will need to take the time to learn how to get a well-manicured financial picture or hire someone to help you.

What does your financial lawn look like? Is it beautiful and well-manicured or is it a hot mess? Get into action to create the financial landscape that will serve your future years and impress all who pass by. Need some help? Call me today.

 

Back to School Savings Strategies

piggybank
piggybank

Last time we covered the ABC's of Back to School. This time, I wanted to share some specific strategies to help you with applying those techniques. 1. If your older child needs one of those expensive graphic calculators, try checking with neighbors and friends first. They may have one that they will give you, let you borrow or at least sell to you at a significantly reduced rate.

2. Check the closet for any clothes that still have tags. As kids get older, they have their own tastes in clothes and sometimes we buy them things that we like that never make it off the hanger. Do an inventory and see if there are any things that still have tags or are barely worn. You may be able to take these back or put them on consignment and recoup some of your money.

3. Wait until AFTER the first day of school to complete your school supply shopping. It's great that the schools have these ready-made lists available at the local stores but let's face it; our kids always come home after the first day needing additional things. Sometimes the things on the list aren't even things you need. Those lists are general guidelines and each teacher is allowed to make adjustments as needed. Waiting to go the first night might require  little more planning but then you are getting only what you need.

4. Take advantage of fundraising savings programs. Does your child's group sell gift cards or discount cards? Programs (marching bands do this a lot) often sell gift cards and the child gets credit for the sale on their activity account. The purchaser gets the full face value of the card. You can be your own purchaser. You have to pay the activity fees anyway. Why not purchase a gift card to the grocery store you already frequent and take advantage of the 2-5% bonus you get by planning ahead.

5. Browse the sales papers and tax savings weekends. Leading up to the big back to school days, many retailers have penny sales where you can get crayons, folders, and pencils for literally pennies. Take advantage of those IF those are items you know you will need and then only purchase the minimum other items required to take advantage of that sale (in other words, don't buy $500 of stuff to get a 1 cent box of crayons)

What strategies do you have? Comment below and share with us!

 

The ABC's of Back to School without Breaking the Bank

abcimageforericka
abcimageforericka

As we get ready to send our kids off to school, it's hard not to think about the growing costs of educating our children. There are school supplies, clothes & shoes, activities and a whole variety of things that inevitably come up along the way. Fortunately, this transition back to school doesn't have to break the bank if you follow these three guidelines:

A - Analyze Your Needs. What do your children really NEED? There's a difference between needs and wants and it's especially important to keep this in mind when it's back to school time. First, you need to take stock at what you have already on hand. Look at what they currently have (underwear, socks, clothes, supplies, shoes). Second, make sure that the NEEDS are taken care of first. Once the needs are taken care of, if there is money left in your budget, then choose one special thing to start the new year with. It's easy to get carried away with all of the cute and trendy items available but after the first day hype settles down, what's important is that your child have the right tools to get their studies completed.

B - Budget and Plan. You already know what many of your expenses will be so make sure you budget for them year round instead of a huge lump sum at the last minute. Be sure to consider regular supplies like pencils and paper but don't forget about pictures, clubs, lunch money, book fees, yearbooks,  uniforms, and things like these that are always a part of the back-to-school spending.

C - Make Choices. Your child may want to be involved in everything but the reality is that every activity costs money. There may be uniforms to buy, activity fees, snacks, and of course there's even transportation to consider. In order to preserve your bank account (and your calendar!), it's best to make a choice. Choose one activity and be "all in." Instead of focusing on what they don't get to do, make the effort to focus on the one special activity that you are involved in. The biggest thing here is to know what you can finance before you decide what you will do or be involved with.

These are three thoughts to help you stay on track even with back to school expenses in your budget. Keeping these in mind will help you from breaking the bank.

 

Love and Money: Ericka appears on the Dr. Love Radio Show

In case you missed it, we've got the links to listen to Ericka's appearance on the Dr. Love Radio show regarding couples and money. Here are several places you can access the recording: -iTunes https://itunes.apple.com/us/podcast/get-on-same-financial-page/id869658342?i=314846375&mt=2

-Stitcher http://www.stitcher.com/podcast/shon-hyneman-4/the-doctor-of-love-show-2/episode/34375610?autoplay=true

-iHeartRadio http://www.iheart.com/talk/show/26356634/?episode_id=26932370

-Spreaker http://www.spreaker.com/user/doctorofloveshow/working-together-financially

-Soundcloud https://soundcloud.com/doctorloveshow/how-to-get-on-the-same-financial-page-with-your-spouse

-Direct Download http://traffic.libsyn.com/doctorloveshow/BudgetSpouseEricka.mp3

-Libsyn Directory http://directory.libsyn.com/episode/index/id/2891443

-Audioboo https://audioboo.fm/boos/2254541-get-on-the-same-financial-page-with-your-spouse

 

What are you waiting for?

Last week, my mother, sister and I went to New York City to celebrate my sister’s birthday.  It had been 8 years since we did anything like that.  The three of us painted the town!  We went to a Broadway musical, Wicked (amazing!).  We toured the Apollo Theatre.  We took the ferry to see the Statute of Liberty and caught jaw dropping views of the entire city from the Empire State Building.  We even sat in the audience of talk shows taped in NY and excitedly participated in the Today Show outdoor fan experience.  This was a trip of a lifetime!  We all got along.  We paid our own way.  We even laughed hysterically when things didn’t quite go as planned. This trip made me wonder how many people don’t get to live out their dreams because of debt or other financial obligations.  Is life passing you by because you haven’t gotten control of your finances?  Do you feel like you can’t breathe let alone take your family on a vacation someday?

This also reminded me of when I cut my hair a few months ago.  Yes… it’s short!  For the last few years I thought I’d wait until I was 40 to cut my hair.  As if 40 was some magical year when everything “grown up” should occur.  Then I thought, why does 40 get all the fun?  I’m cutting my hair now!  Then, if I like it I can enjoy the style for longer and or maybe find another one by the time 40 rolls around.

I ask you now.  What are you waiting for? What thoughts, beliefs, patterns of behavior, etc are holding you back from living the life you truly desire to live?  Don’t wait until you retire to take the trip of a lifetime.  Go now while you can enjoy it!  Don’t wait until you lose all the weight you want to go shopping for something new.  Do it now so you don’t look like a bum while you are getting smaller.  Don’t wait for some magical time to live your life.  Live it now!  If your finances present challenges for living out your dreams, then get about moving those mountains out of the way with a good debt-free strategy.  I can help you with that.  Schedule a Debt-Free Strategy Session here.

Now is the time to live.  You’ve heard it said “Life is too short”.  Well no matter how long I have, I purpose to use each moment to its fullest.  Will you join me?

Are you a slacker?

Please tell me I’m not alone…  You have your list of todos or you know what needs to happen during the week on Monday.  Tuesday you have already said I will do it tomorrow 3 times.  By Thursday you are sure it must get done tomorrow or you are out of luck.  On Saturday you wake up and wonder what happened that this task didn’t get accomplished?  I call that slacking off.  Do you do it too? I’ve been there.  I’m there right now.  I love staying in touch with YOU , my newsletter subscribers!  And my goal is to communicate with you every month.  Unfortunately, the above scenario happens all too often and my messaging doesn’t get out regularly.

But, on Friday I held myself accountable to a coaching buddy and everything changed!  I scheduled what needed to happen.  Then I showed up at the scheduled time.  I thought of ideas and formulated what I wanted to say and… poof!  It got done!

Everyone procrastinates at some time or another.  However, chronic procrastination occurs by about 20% of us and results in missed opportunities, frustration, and a sense that we aren’t getting anywhere.

Let me give you some tips for reducing or eliminating procrastination once and for all.

  1. Get some accountability!  When you hold yourself accountable to someone else who will jerk your chain or otherwise make sure the task gets done you have turned procrastination on its head!
  2. Schedule it! Put reminders in your phone or on your calendar that will force you to see what needs to happen.
  3. Take inventory!  Assess what the most important tasks are before you even get started.  If you work on the most impactful items so you see immediate results quickly.
  4. Create a “Done it” list instead of a todo list.  We always focus on what we need to do and rarely look at what we already accomplished.  Why not end your day on a high note by recording what really happened?  That could be just the motivation you need to complete even more tomorrow.
  5. Get help!  Most of the time we can’t do it all on our own.  We need someone to give us insight, direction, and inspiration.  There is nothing wrong with that.  But you must admit it and seek the help you need.
  6. Let go of perfectionism!  Sometimes we stop ourselves from beginning a task because we are afraid of messing up.  Well you will mess up!  We all do!  But should that rob you of the results you want to achieve?  Finish your task even if it isn’t perfect.  Moving forward imperfectly is better than standing perfectly still.
  7. Outsource!  Can you take something off your plate and give it to someone else to do?  We can overload ourselves with tasks that maybe others do better.  Giving up the task affords you the time for more important work.

Don't be a slacker!  Don’t allow procrastination to stunt your growth, rob your future or keep you from being absolutely amazing!  Pick one of the above strategies and take charge of the tasks that have been weighing you down.

If there are financial tasks like budgeting, getting out of debt, or planning for your future that you have been putting off now is the time to get it done.  From now until the end of the year I will hold 30 minute 2014 Financial Strategy Sessions for anyone who is interested.  During these 30 minutes we will discuss what exactly has been holding you back from succeeding financially, what you can do about it, and we will uncover the one thing you can do right now to make a lasting impact in 2014.  Just click here to end your procrastination today!

Are you open?

Have you ever read the best-selling book “Who Moved My Cheese?” I re-read it on Sunday and loved it all over again!“Who Moved My Cheese?” is about 2 mice and two little people who run through a maze to find cheese. Once they found the cheese they enjoyed it, but it didn’t last long. One day the cheese was not in its usual corner of the maze. The book describes the thought process and eventual journey these mice and little people go through to get more cheese. It would seem timely that I read this book now because my family and I moved across the country just 14 months ago. However, I didn’t think it would reveal so much about what I’m going through right now.

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tumblr_static_cheese_205_1362800142

What I took away from the book this time is to be open to all new possibilities. When my cheese (my home, my business, and my way of life) moved I tried to find a recipe and cook up my own cheese in my same comfortable place. I wanted much of my life to stay the same. I wanted to do business the way I’ve always done it. Over the past year God has brought new and different opportunities my way but I didn’t see he was getting me used to change. I needed to see that different can be good. When your journey takes a on a new direction, move with it. Don’t complain because things have changed. Embrace change so you and those around you can grow. Be open to the idea that life can be better after your life has shifted. Be open to new ways of doing things because you just might like it! Often my clients are afraid of change. They don’t understand why they must get out and seek new cheese (job, way of managing their money, etc). They want life to remain the same but available debt has run out, the kids are growing older, and retirement looming is around the corner. Some clients are reluctant to get help. Some are uneasy about divulging information. And still others are afraid of what they will find if they do seek out a new financial path. It seems easier to just sit still, mope, and blame someone else for where you are right now. Here’s the deal. If you don’t get up and do something about your situation right now, your cheese will smell. It will rot and no one will want to be around that not even you!

So I ask the question… Are you open to new ideas in your finances? Is it possible that a budget and debt reduction plan will show you exactly what needs to change so you can finally get free? Is it possible that a coach will help you avoid the pitfalls of creating these plans and keep you moving forward faster than you would have on your own? Can you imagine life without financial worries and stress? Are you open to the many ways that it can happen?

I have a challenge for you… If you haven’t read the book, you absolutely must! For every person who reads the book and schedules a Debt-Free Strategy Session with me I will discount my coaching services by 20%! It is time for change and you must be open to it. Are you jumping in with me?

 

There are things you must know...

Have you ever heard the saying "You don't know what you don't know?"  I'm sure you have and you understand what it means.  There are blind spots that keep us from seeing exactly what needs to get done or happen next.  Usually someone else can see your blind spot much more clearly because they've either been down this road before or have been trained to see things differently. Most of us have financial blind spots.  We go through life thinking everything is ok and really we are only doing what we know to do.  In our business and personal lives that simply isn't good enough!  Here's why.  If no one ever told you that 60% of the people over the age of 50 don't feel like they have enough saved for retirement you would see how important it is to begin now.  If no one ever told you that 68% of small businesses perform no cash flow analysis you wouldn't understand why so many don't last longer than 5 years.  Now that you know these things, you can shift what you are doing to avoid that statistic for yourself.

There are some numbers that you just NEED to know.  If you focus on these numbers you can make better decisions around your finances.  Track the following for the next 3 months and pay attention to what changes in your confidence, planning, and outcomes.

As a small business owner and household financial manager you must know...

  • Total household income
  • Total monthly expenses
  • Household bank balance
  • Business bank balance
  • Total receivables
  • Total payables
  • Revenue forecast
  • Total business expenses
  • Emergency fund balances
  • Total debt owed
  • Total net worth
  • Credit score

These are your critical pieces of information that you need to track on a regular basis (quarterly).  Over time you will know exactly what items you need to work on.  Keep it simple but make sure it happens.  Your future, goals, and financial health depend on it.

 

 

From Scarcity to Abundance!

Let me open a window in my life right now.  8 Years ago my husband and I got out of nearly $100,000 in debt.  I have worked with over 200 people to do similar feats.  I have spoken to numerous audiences about money, finances, and debt-reduction.  But here is my dark little secret… Get ready because this is hard for me to say… I don’t have it all together!  I’m still a work in progress!  I have my own money issues just like you do.  How? Why? You ask… Well I have had a scarcity mentality.  Or, I have been happy to live in the land of just enough.  Playing small so I don’t have to stand out from the crowd was safe space.  Feeling guilty if I had “too much” was a regular occurrence.  I never wanted to show off or make others feel bad when I could make financial moves they could not.  I learned to make any amount of money work for both my family and others.  When there wasn’t “enough” we cut back.  When there is more than enough we use wisdom about what to do with the extra.  My husband has taught me how to have fun with money because that didn’t come naturally to me.  But I am just finding out that I’ve been holding myself back by not striving for more.

God desires you to “have life and that more abundantly”.  But, for some reason I am just now coming to the conclusion that it directly applies to me.  God wants me to play a bigger game so that I can have abundance, give abundantly, and help others do the same.

The scarcity mentality holds you back and therefore will hold others back because of your playing small.  The abundance mentality reveals that there is always more than enough for everyone and your participating spreads the wealth around.

My question to you is where on this spectrum do you live?  Are you playing small by not fully utilizing your gifts?  Are you settling for what you have right now and not striving to go the next level?  Can you dream beyond getting out of debt or making ends meet?

I challenge you to step back and evaluate where you are on the abundance spectrum.

Poverty                Scarcity                 Just Enough            More Than Enough          Abundance

Think about this in terms of your thought life and your reality.  Can you envision yourself moving through these phases to your own next level?  If not, what is stopping you?  The answers to these questions will help you get free! It did for me! Set up a 30 minute Abundant and FREE Session today if you want your answers now!

You Have Options!

You have options! Are you stuck in a financial rut and feel like there is no way out? Do you wonder how everyone else is making it? Here’s the deal. I know you make good money. You work hard. You have what you need and most of what you want but you are not getting ahead financially. What is the problem here?

For many people, seeing no way out holds them back from ever getting where they want to be. When I sit down and talk with my potential clients for the 1st time during our Debt-Free Breakthrough Session “I see OPTIONS!” And many times you have more options than you think. Here are a few for you to ponder…

1. Increasing your income with a side business or a part-time job. Yes I know this is uncomfortable and a time commitment but in the end it helps you get where you need to be faster. 2. Selling something. We all have more stuff than we need. Someone always needs something we have and now is the time to make that connection. Use craigslist.com, ebay.com, or just have a garage sale! More money in your pocket leads to more peace. 3. Does someone owe you money? The government is included in this question. If someone owes you money can you change the terms and increase their payments? Can you adjust your withholdings so you get more in your paycheck if you always get a refund? Why give the government a loan when you need the money right now? 4. Do you have a car payment? I know you are grumbling about this right now but car payments suck our futures away. When you are looking for ways to increase you income and decrease your outgo this is the perfect place. Sell your car and get one that you can pay cash for or have a payment for less than 1 year. This is a short-term sacrifice for a long-term gain. 5. Can you barter services to get things you need without paying financially? This concept is huge because you can get exactly what you want and need without it affecting your budget.

These are just a few of the options that I see regularly. You may not want to do any of them because they are painful, but I never said they were attractive. I just said they were options. Options prove that there is more than one way to get to your end goal. Now you must choose which one you will commit to and get to work. If you aren’t willing to CHOOSE then I would question… “How bad do you want it?”

If you would like me to consider your personal options book your complimentary Debt-Free Breakthrough Session NOW!

Training Requires Repetition

Ok so I’m going to tell on my family today. :) A few years ago, I confided in a friend of mine that my daughter was not obeying me immediately when I asked her to do something. Time and time again, I’d tell her something and she’d not take it seriously or conveniently “forget.” For those of you who know my girls don’t try to figure out which one it was because they have both behaved like this at some point. The point is that we all have. I truly believe that the bible is the divinely inspired word of God and it says “train up a child in the way that he should go and when he is old he will not depart from it.” So when my friend told me that training requires you to repeat the process over and over again I sank in frustration. I mean who really wants to repeat themselves 5,000 times before a kid gets the point?! I just wanted to tell my daughters what to do and then have them actually do it right then. What is so hard about that? Nothing really if you’ve been trained! Here’s the definition of train: to develop or form the habits, thoughts, or behavior of (a child or other person) by discipline and instruction

My daughters are in the middle of being trained to do what we ask, learn personal responsibility, and eventually initiate good behaviors on their own. So to expect them to get it right on the 1st try is unrealistic. Training takes time, repetition and discipline. Here’s the thing. We all need training in an area or two. My clients come to me because they need training in tracking their spending, creating and living by a budget, as well as learning how to get out of debt. It takes repetition to make anything a habit you do without thinking. Budgeting is no different. If managing your money has been hard for you until now here’s what I want you to do. Breathe… and try again. Maybe you need a coach on your team to help you avoid pitfalls and hold you accountable. Maybe you need to take a class that will give you the instruction you need to finally be successful. Or maybe you simply need to decide that 2013 is the year you will commit to being consistent.

If this has resonated with you and you are ready to make some things happen in 2013. I want to hear from you! Email me today. I also want you to take action.

Next Thursday January 31st, 2013 at 7pm EST I am having an Encore call for "The 10 Reasons You “Don’t Have Enough” and the Key Ingredients to “Having More Than Enough.”

I received such a great response that I am doing it again! I will also be offering a special gift for those on the call… so register today. If you registered for it already I have you on my list and you will receive the call-in info. “See” you on the call!

Stay in the driver's seat

As Dave Ramsey would say, “Debt is dumb and cash is king!” And… we’ve all done dumb! 13 years ago my husband and I woke up. We found ourselves in lots of debt and no plan. Dumb! Creating a plan for your money and being an advocate for your freedom is what I call “Staying in the driver’s seat”. We used our budget and debt reduction plan to get free. However, sometimes you need to steer multiple cars in order to win. Here’s what I mean. As I’ve been working with clients lately, I’m noticing that creditors are becoming more aggressive. Many are using unfair and low ball tactics to get their money. They are unpredictable, but you must stay 3 steps ahead of them to keep control of your vehicle.

If you have old or unpaid debt hanging out there, here are some suggestions: 1. Create a budget and know how much money you have to work with on a regular basis. 2. Do your best to get and stay in touch with creditors. Lack of communication can lead to misunderstandings and garnishment. One of my clients paid nothing for years and then tried to settle the debt repeatedly when she had the cash. Because no agreement was made quickly the collector garnished wages. 3. Pay your creditors something. But, when you do ensure this is an agreement they accept. One of my clients faithfully paid what she could afford and the company still seized her assets because they had not agreed to the amount she was paying. It is important to get any agreements in writing. 4. Keep some cash at home. You want to always have money that no one can touch. In the event of an emergency you have something to catch your fall. 5. Do your best to keep any debts from going to an attorney. Work out payment arrangements prior to it going that far. At least that way no attorney fees are involved.

There are no guarantees in outcomes when dealing with creditors and old debts because each company handles these issues differently. But with a plan you are at least ahead of the game. When you stay in the driver’s seat you are rational enough to make good decisions and follow through. If you need help getting your plan together and sticking to it give me a call.

Plan ahead

Usually around October, November, or December companies give their employees the opportunity to change their benefits elections. Some of you may be in the middle of doing that right now like I am. I encourage you to take a closer look this year. Some things have changed across the board. Yes the cost of healthcare may be increasing for you like it does for many of us but look at what the needs of your family are as you make your elections. Next year my family will have lots of dental work. Yes we brush our teeth  but things do happen! So, now is the time to increase our dental plan so it covers a higher percentage of the work. In addition, we need to increase the amount we put into our flexible spending account. By the way, all flexible spending accounts will now have a limit of $2500. That account is funded tax free. So we don’t have to work as hard to spend that money.

Also, review your life insurance needs. Maybe your income has increased or your family dynamic has changed. It is always a good rule of thumb to have 8 to 10 times your income in life insurance if someone else depends on your income. Purchasing life insurance through your employer is always the least expensive avenue to take. It literally costs pennies to go from 1X to 2X your income in most cases.

Finally, take an overall assessment of your household’s medical needs. You may want to calculate the amount of prescriptions, doctor visits, and preventive care your family needs next year and plan for it. Use a flexible spending account that avoids taxes or set up a health savings account if your company provides it. Otherwise, set up your own account for medical expenses so you always have a way to take care of your health. You can do the same for any dependent care spending. Your company may provide a tax free dependent care account up to $5000 so take advantage of that savings as well.

Your health is vital so you must take health care seriously. No matter what happens in the White House, I encourage you to do what is in your control to stay in your best health possible. Ultimately, remaining healthy affects your budget for life…

I’m Moving!!!

Yes I said it!  We are headed back to the Midwest next month.  My husband, Chris has always been in sales and now God has blessed him with an opportunity to manage and lead people as a District Sales Manager at Mylan Specialty.  This new opportunity takes us to Indianapolis!  We are excited about this journey and our next chapter!  We will be driving distance to many relatives which is something we’ve desired for a long time.
Chris and I have been in Arizona since August 19th 1998.  We packed up immediately after our August 8th wedding and honeymoon to begin our new marriage in Phoenix.  And it has been amazing!!  I worked for Motorola for 7 years and began my financial coaching business in 2005 after my husband and I were free from our debt.
I’m so grateful for being able to do this business and help so many people through coaching, this newsletter, workshops, etc. And yes I will continue these efforts in our new location. Tailor-Made Budgets is only changing location.
Truly, I’m not going anywhere!
What does this mean for you?  Of course, this is bittersweet (I'm leaving many friends and family behind in Arizona), but it definitely is not the end.  It is just a new beginning for me and my family!  Of course, I will continue my online newsletter and will continue to support you, as always.  Know that all of you, my faithful newsletter readers, have helped me to become who I am today.  I am thankful for your role in my life and pray that God will continue to bless you as he has done with me and my family.
To your financial success!
Ericka

Refund or Not?

It’s tax season! You have 1 week to complete your taxes if you haven’t done so already.  Some people love tax season because they know a refund is in their future.  Others are dreading it because they always owe.  The best way to successfully maneuver through tax time is to have a plan.  Here are some suggestions whether you face either scenario. Let’s talk worst case scenario first.  If you owe the government here are some things you can do to recover well…

  • If you don’t have all of the money right now, the government does take payments.  So don’t be afraid to file if that is the case.  Just be honest about what your budget says you can afford and do your best to pay it off by April of 2013.  We don’t want this to linger very long.
  • Estimate your withholdings with the “withholding calculator” at www.irs.gov. Then go to your payroll department and change your exemptions so enough money is getting taken out of each check.  It is best to plan ahead than find out you will owe again!
  • Review your budget.  Make adjustments to your budget because now you need to live on less.  Find out what is unnecessary and reduce it or cut it out entirely.  Be sure your budget balances with the change in exemptions and/or your monthly payment to Uncle Sam.

If you always get a refund here are some suggestions to make the most of your money…

  • Put some money in savings!  If you don’t have $1,000 in savings then you need to make that 1st on your list of to dos.
  • Pay off some debt!  List your debts smallest balance to largest balance and see how many you can pay off within your refund amount.
  • Set aside money for any upcoming expenses (car repairs, non-monthly bills, etc).
  • Have some fun!  Yes I said it!  Go out to dinner, take your kids to the museum, or buy something pretty for your home.  Of course, I don’t want you to spend all of the refund on fun but a little fun makes you feel like you got something extra.
  • The best way to handle a refund though is to actually get it in your paycheck throughout the year.  If you received $2,400 from the government, I think it is better to get $200 more each month instead.  Go to www.irs.gov and estimate your withholdings with the “withholding calculator”. Then change your exemptions with your payroll department so you just break even.  Imagine having more money each month to pay down debt, save, or simply have fun!

Whether you have a refund or not I hope these tips will help you to be a better steward over your taxes this season.  Making smart decisions with your taxes can have a positive impact on your future.

Is it worth it?

Paying off debt is exhilarating!  Getting free of the bondage of debt gets me excited!  How you go about doing that may not be quite as exciting though if taxes get involved.  Read on if you settled debt in 2011.  Tax Day is coming April 16th and you need to be sure you are ready. Typically if you have old debt that hasn’t been paid on for more than 6 months I recommend you settle them.  But you must know that there can be consequences to doing that.  I believe the freedom of being debt-free is worth it though.  Let me explain…

Let’s say you have a $1000 debt that hasn’t been paid on for a year.  When you have the cash on hand you could settle that debt for $200 which means the creditor took a loss and you only paid $200.  You never have to deal with them again!  However, you may be responsible for reporting the $800 savings on your taxes as debt forgiven.  Which means your income for that year just went up by $800 and you now have to pay taxes on it.  If your tax bracket is 25% then you now owe the government $200 additional.  Therefore, in total for that debt you have paid $400.

It sounds unfair and some may wonder if the process is worth it.  I believe it is still worth it to pay off the debt.  You must protect your online reputation, pay the debts you owe, and make good on your commitments.  This is just a different way of going about it. The finish line is still there.  You just took a different route.  Knowing how the process works helps you develop your strategy for getting free.  Don’t allow the tax implication to stop you from your freedom.  Now go pay off that debt!

Are our Finances Healing? Experts Give Advice...

We are finally beginning to see a turn in our unemployment rates and some experts think we’ve bottomed out in the housing market. So maybe, just maybe, we are heading in the direction of a recovery. But if our nation is finally healing… are your finances healing too? It would be nice to think that all will be well in the world if everyone who wanted a job got one and could get “back to normal”. But what is normal? And do we really want that? For years, Americans have overspent therefore, creating obscene amounts of personal debt. For the last several years we have had no choice but to tighten belts and spend less. Now that many people are back to work and/or getting raises, have we learned our lessons? Now is the time to get out and stay out of debt! Now is the time to save money for your future. Now is also the time to lay a solid foundation for your finances. You can do it if you keep that belt tightened just a little longer… Read more in a recent AZ Republic article Ericka Young was featured in…

To Your Success!

Way to Save!

Last month I received a terrific question from a subscriber.  Since the answer can help everyone I’ve decided to make it the main topic of this month’s newsletter. “There are so many different kinds of savings accounts and so many different institutions to choose from.  What kind of institution would you recommend and which type of savings account is best and will pay the most interest?”

First of all, you must understand that there are several reasons for saving money:

  • Emergencies
  • Large purchases
  • Future goals (children’s college, retirement, etc)

I’ll explain the last one first.  Long-term savings is for goals that are at least 5 years away.  You could be planning for retirement, kids college education, a child’s wedding, etc.  No matter what the long-term savings is for, the general rule should be that you save it in mutual funds, stocks, etc only if you know you won’t need the money for at least 5 years.  The reason behind this is volatility in the stock market.  Over long periods of time the stock market is a great way to save for future endeavors.  You could see 10%, 12% or more in returns.  But if you need your money in a relatively short period of time you don’t want to pull funds out of the market during a potential down period.  Historically speaking, the stock market is a great way to invest for your future but you will have ups and downs so be prepared.  Understanding your risk tolerance and time horizon is critical to your long-term investment strategy.

A large purchase is something that will take less than 5 years to save for.  That means you are saving in a more stable type of account because you don’t want to run the risk of volatility in the market with money you will use soon.  Large purchases include: cars, household furniture, major car repairs, vacations, planned medical expenses, appliances, home down payment, etc.  I recommend saving for these items in a money market account.  Money market accounts typically earn more interest than the average savings account.  Basically if you don’t need it right away and the total amount you must spend won’t fit into your monthly budget then you must begin a regular savings for it until the amount you need is available IN CASH!

Saving for an emergency is vital and the critical first step in everyone’s financial plan.  You must keep $1,000 in the bank before beginning your debt reduction plan.  Once you have the $1,000 saved you move on to getting rid of all your debt except your mortgage.  Next you increase your $1,000 emergency fund to 3-6 months of expenses.  Here again I recommend using a money market account to save.  You earn higher interest, retain your principle deposits, can withdraw at any time, etc.  Some banks offer check writing privileges for minimum amounts.  You may need to keep a minimum balance, but this is savings right?  You want a minimum saved!  There usually are limitations on how many times you use the account, but the idea here is that you aren’t treating this account like a checking account.  There shouldn’t be an emergency or large purchase several times each month.

There are tons of banks to choose from when opening an account.  Online banking is making it much easier to sock away cash without leaving the comfort of your home.  Check out www.bankrate.com for rate comparisons between accounts. Make it a priority to save and your money will begin working for you!  Then later you don’t have to work so hard for your money!

What are you doing with your extra day?

2012 is Leap Year!  We are always looking for more time, more hours in our day, or just one day to “catch up” on something.  Well now you have it!  What are you going to do with it? My recommendation is for you to set aside some time for an activity that you normally never seem to have time for.  Think about your goals for 2012.  Did you commit to paying off some debt?  Well February 29th is a good day to add up how much debt you have and determine how much extra you will put towards paying it off.  Is 2012 the year you decided to really commit to a budget?  Why don’t you make February 29th the day you wrote out your March budget?

Personally, I have scheduled an appointment to get my business marketing back on track.  I am also spending some time watching an educational and inspiring movie with my daughters to celebrate black history month.

I know you may have to work.  I know the kids still need to go to school.  Yes I know that life must go on even though we have an extra day.  But this is 24 extra hours in our year!  What you do with it may change the course of your year dramatically!  Let’s use it wisely!

ABC 15 News Segment

Helping a valley family get back on their feet and sharing financial advice is what I do best and that is what landed me on ABC 15 News along with advice being shared by Suze Orman. Kim's family is over $20,000 in debt. She reached out to ABC15 after ABC 15 News put a post on their Facebook page looking for families struggling to make ends meet. My advice to Kim, "You've had an income decrease of about 50 percent," Ericka Young explained. She's a certified financial coach of Tailor Made Budgets and is helping Kim and her family get back on their feet. "Make sure that you're tracking your spending for all of your categories that you have on your budget," Young urged Kim. "So we'll be working on that as well."

I look forward to working with Kim and her family. You can read the full story here and watch the video of the news segment.