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…

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.

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!

Change is Good!

Let’s face it.  We are reluctant to change.   We see change as intrusive, bothersome, and annoying.  We want to continue doing what we have always done because it is comfortable, easy, and well-known by us.  Change involves movement, which in turn requires effort.  But… everything was created to move.  Don’t believe me?  Trees move with the wind.  Rivers, streams, and ponds are active.  Think about it.  To breathe is to move.  Your chest expands because your lungs are taking in oxygen.  The rest of your body is dependent on that simple movement.  Anything that is stagnant becomes stale.  Water when stagnant produces scum, mold, and a foul smell.  People when stagnant lose their ability to move their limbs.  Life when stagnant simply dies.  Change, therefore, is GOOD. The benefits of change are numerous.  Let me tell you why...

  • It proves you are alive.
  • Nothing stays the same or gets boring.
  • You are improving, growing, and learning.
  • Others benefit when you change.
  • Change reminds us that anything is possible.

2012 can be full of great opportunities if you will embrace change.  Many times we set goals, make New Year’s resolutions, or create ultimatums for ourselves when the New Year arrives.  Being so drastic can be disastrous.  What I’d like to propose is that you simply embrace change because only then will you actually achieve your goals or resolutions.  Open yourself up to new possibilities and be willing to create them for yourself.  Where it concerns your finances think about (and write down!) the transformation your budget will undertake when you are totally free of debt!  Then make the necessary changes to your budget now to get there.

See change can be good!  Think about what it will feel like to pay cash for a car!  If you have never done that before then it requires a change in behavior.  The New Year brings hope, excitement, and fresh look at what is possible.  This year commit to changing your outlook and you will in turn change your LIFE!

Merry Christmas!

I am so grateful to God for sending Jesus. He was the ultimate gift. His example is what we need to follow after every day. This picture is of my family hiking the Great Wall in Beijing on our summer vacation to China. Yes, we went to China and paid CASH! It was an experience I won’t soon forget. I am so thankful to God that we had such a wonderful opportunity. We had some wonderful Christian neighbors we stayed with and took us around the major tourist attractions. It truly was the trip of a lifetime! I wanted to share some of the things I learned while I was there. The things made me appreciate our country and the God that we serve.

  • Freedom of religion is not to be taken lightly. I can praise my Heavenly Father anytime I want! Many times I will be in company when I do it too because more than 75% of Americans proclaim Christ. In China however, that number is less than 30% and finding a church is even more challenging.
  • I learned that privacy is relative. In China, you never know who is watching your comings and goings. The government is highly involved in your life. In America, most of the time we can feel secure when we close our door at night. That isn’t the case everywhere.
  • We are definitely a wealthy country. No matter what the dollar is worth, how the stocks perform, or what the unemployment rate is; we make a lot of money overall. Did you know that the average annual income in Beijing was $2715 in 2005? That is less than unemployment benefits in Arizona! No wonder they have shared living spaces, one child per family, and eat simply!

This holiday season I purpose to be thankful for God’s many blessings and look for ways to share that with others. Our trip to China was outstanding but also a fantastic reminder of how blessed we are. Not only is Jesus the reason for the season but frankly He must be the reason for everything. This Christmas make sure that everything you do has Christ at the center and helps others to acknowledge Him as well.

Merry Christmas!

Ericka

Get Real and Get Ready!

Get Real and Get Ready! Merry Christmas!  Happy New Year!!!  The holidays are upon us.  Are you ready?  Typically we gauge our preparedness for the holidays by our timeliness of the following things: getting the tree trimmed, buying gifts, sending out Christmas cards, etc.  I’d like to adjust the way you view your holiday planning.  Until you’ve written down a detailed list of what these holidays will cost you aren’t completely prepared.  As of this writing I see some areas that I myself have missed and need to prepare more accurately for.  Yes it may sound like overkill, but come January 1, 2012 you don’t want to be experiencing a 2011 Holiday Hangover because you didn’t accurately assess what your wonderful holidays would cost.  That is a good way to overspend and the holidays sure aren’t as festive when there’s debt at the end of it.  Create a detailed list of the following items with dollar amounts and come to grips with your holiday spending.

Your holiday worksheet should have the following categories:

  1. Gifts and gift wrap (family members, co-worker, friends, neighbors, secret santas, teachers, coaches, hostesses, pastors, care-givers, mail carriers, hairstylists, babysitters, maid service, etc).
  2. Decorations (tree/wreath, lights, etc)
  3. Food and beverages
  4. Greeting cards, film processing, family portraits
  5. Postage, shipping and boxes
  6. Holiday events and parties
  7. Holiday attire

If you’ve already begun your holiday spending simply back track and see how much you’ve spent so far and what needs to happen in the next 27 days.  There is still time to get on track and stay on track.  You need to know what you typically spend each year.  A great goal for starting off the 2012 New Year is to save all your funds for the holidays before they even begin.  Just divide your total holiday expenses by 12 and save that amount each month.  Why wait until 2012 to begin setting goals?  Start now and Get Real!

Keep the holidays in perspective while you shop and complete your list.  The true reason for the season is the birth of our Lord and Savior Jesus Christ.  He is the greatest gift you can ever give to those you love and care about.

Are You Ready for the Holidays?

Well they are coming even if you aren’t ready! Now is the time to prepare for the next few weeks. The nature of shopping is changing. You must know how to navigate so you get the best deal and keep more money in your pocket. Here are some tips that will help get you through this holiday season with no regrets and happy gift recipients.

  1. Check online 1st. www.blackfriday2011.com already has the latest ads that have been leaked so do your shopping now before you leave your house on Friday. Also, check out www.cybermonday2011.com.
  2. Buy online and get the same deals you would in store.  Many times you don't have to fight the crowds because the stores have the same sale prices online.
  3. Search your favorite stores for coupons again before you leave your house. Signing up for email lists usually ensures you will get the latest information quickly.
  4. Be a fan! Like your favorite stores on facebook and check their updates regularly. Typically, companies run specials, coupons, and giveaways for fans only.
  5. Follow them! Twitter can be a great way to ask specific questions about hours, specials, and upcoming events. If your stores have a twitter page be sure to follow them.
  6. Subscribe to the many deal sites like www.groupon.com, www.livingsocial.com, or www.dealchicken.com. Be careful that you only buy what you will use though.
  7. Make a list! Too many people leave their shopping to guesswork. Lack of planning leads to overspending. This list needs to include all the people you’d like to buy for and how much you intend to spend on them. You may also want to include gift ideas. Then, make sure you total it up and take it shopping with you.
  8. Shop with cash. There is nothing worse than a holiday hangover on credit. Who wants Christmas shopping to follow them forever?
  9. Don’t forget the small stuff! Make sure you decide on Christmas cards and postage, family photos, meal planning, teacher gifts, decorations, party attendance, etc. Nowadays, very little is free but planning can keep your personal costs to a minimum.

Don’t allow the holidays to wipe you out. You can and should be prepared for Thanksgiving, Christmas, and the New Year. I hope these tips help you to enjoy a Happy Thanksgiving, a very Merry Christmas, and a financially prosperous New Year!

Are you staying or leaving… your bank?

I’d really like to know! With all of the potential changes coming are you staying or leaving your bank? This past Saturday was National Transfer Day when people already chose to leave their large bank in favor of smaller options like credit unions or online and local banks. Were you one of them? When Bank of America announced last month that they were going to begin charging monthly fees for the use of debit cards on accounts, consumers were outraged! Other large banks thought it was good idea too and toyed with jumping on the same band wagon. But, on November 1st Bank of America decided to halt charging customers those fees because of the major backlash. Of course, my hope is that other banks will do the same. For once, the banks listened to the consumers and changed their mind!

Be forewarned though, there are many other changes that the banks are still considering and may slide under the radar unnoticed. Be sure to check with the new bank you decide to use and/or the one you have now for the following potential fees.

1. $5 Minimum balance fee 2. $3 ATM fee even if you use your own bank’s ATM 3. $5 Notary charge 4. $2 Direct deposit charge 5. $3 Teller usage fee 6. $3 Coin tally service fee

If you add up just one of each of these charges for one month you have paid $21 in fees! Well I’m not taking it! And I hope you don’t either! Continue to speak up and let your bank know you won’t stand for all of these fees. You can also speak up by moving to a smaller bank, online bank, or credit union that aligns with the values you have. Check out creditunion.coop, bankrate.com, or banktruth.org to comparison shop your choices. I want to hear from you! Let me know your thoughts and what you are deciding to do. We must all come together and speak up!

Do You Keep Track of Your Budget?

Now, more than ever it is extremely important to keep track of your budget. Additionally a check register is a must. Yes I said CHECK REGISTER! What do you think is the best/easiest computer software for creating and keeping track of your budget/check register? I use a few tools that work for different purposes.

Excel - For budgeting it is easy and you can save them all for future reference if you want. Anyone can use it and it is on virtually everyone's computer.

Quicken/YNAB/or Mint - For tracking your spending and keeping a check register these tools do the trick simply and easily. You can download your bank transactions and keep the records for years if you want to. You can also monitor your spending for certain categories like groceries, dining out, clothing etc, and you can keep tabs on multiple accounts.

I don't like the budgeting tools for any of these software packages because they assumes your budget is the same every single month. You are not allowed to keep last month's budget. Also, when I budget I make sure to break down my spending by pay period. These programs do not allow that flexibility. Therefore I use it only as a check register and spending history.

If you aren’t savvy with the computer then use a simple check register from your bank to easily keep track of your daily bank balance. We know this might be a bit old-fashioned these days, but keep it with you at all times and immediately record any transactions into your check register, so you are always up to date of how much money is left in your account. When relying on online banking, some transaction post later and if you are not aware of them, your account is easily overdrawn resulting in additional fees.

For more tips, please feel free to sign up for my newsletter. When I say, I love what I do, I mean it! Helping you make good budgeting decisions, makes my day. :)

It's That Time Again

Every year between October and November companies begin to notify employees about benefit renewal. During this time you can modify your benefit elections for the upcoming year. Although medical benefits are one of the main elections that many people are concerned about, don’t forget to take advantage of some other benefits your company may offer. Dependent care accounts (DCAs) allow families who pay for child care to save before tax dollars up to $5,000 per year for dependent care expenses. You can access the account for reimbursements with your receipts and/or pertinent documentation for child care, nursery school, or at-home care for dependents. If you put $5,000 for the year 2012 or $416.67/month into this account it will come out of your paycheck prior to taxes. Therefore, your taxable income is reduced by $5,000 for the year. Not only is it an automatic savings account, but it is advantageous on your tax returns. Be sure to only designate the exact amount you will need because the funds do not roll over to the next year.

Also, check into term life insurance. Group plans are by far the least expensive way to pay for life insurance. You need 8-10 times your income so that the ones you love are financially taken care of when you are gone.

Most importantly, you need to evaluate your medical care. Look back over 2011 and see how much you spent on medical needs. Review the choices available so you spend the least amount of money but get the most benefit for you and your family. I love HSAs because they are savings accounts that grow tax-deferred but you can use the funds on medical expenses. You can keep this account until you turn 65 at which point you can use the money for anything you desire after you pay the taxes!

Take action today! Know your options and make sound decisions concerning your benefit choices. It will pay off in the long run!

What is procrastination costing YOU?

Procrastination is an evil that can cost you dearly. Sometimes we don’t realize the power it has over our lives until we literally add it up.

  • Have you ever checked out a book at the library and forgot to get it back on time having fees assessed daily?
  • Have you rented a DVD and ended up paying double for a lousy movie because you missed the 9pm deadline?
  • Have you walked in a store the day after a sale ended?
  • Have you failed to call a potential client when you said you would and lost business because of it?
  • I really hate is missing out on financial opportunities that truly could have been mine. I love a good deal, saving money, and getting the most for the least amount of money. I detest it when I could have saved money or ended up paying too much for something.

    Just last month I missed a sale at Dillard’s by one day and for the 2 dresses I bought could have saved an additional $47!! I forgot to go to the library and pick up a book that was on hold so a fine of $1 was assessed. I also paid an extra $50 for plane tickets just because I didn’t purchase them when they were on sale! All of this happened because I wasn’t paying attention to the details and taking action when I knew that I could. This may not sound like a lot of money today but if I continued to do this in various areas of my life for a year I might have squandered over $2000! Ridiculous!

    Maybe you procrastinate in other ways. We also procrastinate when we think we have more time. Here’s the definition:

    the act or habit of putting off or delaying, especially something requiring immediate attention

    Do you put off or delay financial matters that require immediate attention? Are you constantly backtracking because you failed to do something in a reasonable time period? Have you waited to start a budget or debt reduction plan? Now is the time to regroup. Think about the financial priorities you have in life. Think about what it would feel like to accomplish them. Then take action to make sure that no time is wasted.

    I purpose to slow down, do my research, and pay attention. We can get so busy that we miss out on financial opportunities and goals. I am not missing out on anything that saves me money from now on. I won’t wait to do something I can do right now. I encourage you to do the same. Don’t wait to start a budget or understand your debt position. If you have more time you can accomplish your goals sooner. Don’t allow procrastination to rob you of saving money or getting truly free.

    Never, Never, Never Give Up!

    A close girlfriend of mine used to have a message on her voice mail that said “Success is achieved through perseverance so never, never, never give up!” Every time I called her I knew that if we talked she would encourage me in some way and if she isn’t available at the time I’ll still be encouraged with her message. What a wonderful way to greet all who desire to speak with you. Today I encourage you with the same words.

    “And let us not be weary in well doing: for in due season we shall reap, if we faint not.” - Galatians 6:9

    We are entering the last quarter of 2011 soon. Have you made plans to stay on a budget, save a certain amount of money, or purchase a large item? How are you doing on your financial goals for 2011? It is easy to set our goals, but what do we do once they are written? Let’s not hide them in the office drawer. Pull them out and read them at least weekly. Make sure you are showing progress regularly. Show them to someone who really cares about you. It takes at least a few weeks of repetition before the new behavior becomes a habit. If you haven’t achieved your goals for 2011 yet, there still is time. Don’t give up before what you are striving for really becomes a part of who you are. Whatever it is that you are destined to accomplish this year is worth the effort required. And… you are more than worth the rewards that achievement will bring. Never, never, never give up!

    Budget Control Act

    If you’ve never thought a budget was for you then I am here to tell you that you absolutely must have one now! You could have avoided it before. You may have had some excuses in the past. But, now you have no choice. It is time to BUDGET! Why you ask? Because you may be getting a pay cut. I do not enjoy being the bearer of bad news but the government may be holding on to more of your hard-earned dollars. Yes, the government is at it again. The Budget Control Act was passed a few weeks ago and it may affect YOU. Here are the details that you need to know.

    Our nation’s debt is increasing by $1.2 trillion by the end of 2011 even with necessary spending cuts. There are no tax increases yet to balance the budget however many familiar deductions may reduce or go away. The following deductions are subject to change: 1. Mortgage interest 2. Medical expenses 3. Charitable giving 4. State and local tax 5. Itemized deductions The good news however is that Interest rates are still at historic lows so now is a good time buy or refinance a home. But please make sure it is within your budget!

    These tax deduction changes affect how much money you have to work with at home. What would you do if 5% of your income was taken away today? If you have a budget then it makes your personal changes easier to identify. You can see it all on paper.

    The only way to mitigate the risk of governmental decisions is to take control of your own finances. Pay down your own debt, get on a budget, and by all means show the government that real change begins at home.

    If you need help with your own budget give me a call. You can also sign up for my upcoming classes. Click here to learn more.

    6 Tips for Back To School!

    Yes it is that time of year again… Back to School! Have you adequately prepared? Most of the time, we haven’t. Somehow we just have too much fun relaxing, vacationing, and in general enjoying the break from the usual routine. Well I have news for you… School starts at about the same time each year so why not plan accordingly? Christmas is always on December 25th but we don’t seem to realize that until Thanksgiving dinner is before us. How about we make preparations for what is ahead by starting now? Since my kids started school this week, I have no choice but to plan for the next year. Our school shopping is done! Here are some tips to consider when the summer is coming to an end:

    1. Before you spend any money. Look at what you already have. Make your kids clean their rooms, open the drawers, and take inventory. This goes for clothes and school supplies. Now that you know where the gaps are all you need to do is purchase those missing items. 2. Create a storage tub with all unused school supplies. Stock up at Staples and Office Max when certain supplies are 1 penny and then dump them in the tub so you know where to look when you need it. 3. Buy clothes in larger sizes throughout the year when they are on clearance. This way you don’t need to budget a large amount for clothing on the heels of your vacation. 4. Get an idea for what activities, electives, and sports your kids want to partake in early. Next, determine what makes sense for your schedule and budget. Finally, inform your kids what they can participate in before the sign up date. Then they know their boundaries ahead of time. 5. Summer is expensive with vacations, camps, activities, etc. We have to keep everyone busy right? Well, why not save for these events throughout the year? Sign up for your dependent care account at work so you get a tax break. Only put in the amount of money for child care, camps, etc that you know you will spend because the money is gone at the end of the year. Also, open a vacation savings account. Add up what you spent this summer and set aside the monthly amount automatically. 6. Shopping is easy when you have to buy school uniforms since it is all the same. However, it can be costly. Scout out families with kids either older or younger than yours and consider a clothing exchange. And definitely save the older siblings clothes for your younger ones.

    Budgeting is the key to success with money. It helps you plan for what is ahead and gives you a basis for change when the unexpected happens. Preparing to send your kids to school is no different. Budgeting will relieve the stress and in turn put the power back in your hands. Here’s to a great school year!