#1 Stressor is Money
Do you know what fear is? It is not knowing or understanding the thing. Fear that something is dangerous, painful, or threatening. What if you understood money, and conquered the fear? What if you were in control of your money, and told it what to do, and got rid of those money fear monsters? Instead of spending and deflating your bank balance, you chose how to use your money and made it a tool?
The first step to conquer the fear is to look at all of your bank statements and invoices. Starting with the bank statement, balance it to your checkbook. If you are basically using the online balance, make sure you are reviewing ALL of the transactions on your statement. It can be eye-opening to see several ATM withdrawals with bank fees or take-out food purchases that may not be good for your health either.
Are you still using a credit card and not paying off the balance in full each month? What is the minimum payment. Divide the total owed by the minimum payment. How many months would it take to pay in full if there were no interest? A lot longer than expected; and probably not worth having a new golf club, pair of shoes, or dinner out with friends. Add in the interest, and it will take even longer. See how much it will cost you with the information they provide in your billing disclosure. Eye-opening, for sure. Interest on negligible purchases is a very scary monster, and can be killed by paying off the credit card in full and not using it again.
Start attacking those money beasts, and get rid of the fear and stress. You may be making enough to afford your purchases, so prove it by paying in cash or with a debit card. Demonstrate your command over earnings by turning some into savings. Being able to pay your bills easily each month is a recipe for sound sleep. Try it for the next six months and see how it feels. You’ll be stronger and richer for the practice.
I find that awareness of our money habits is key to making a positive change. If you’re ready to increase your money awareness, contact me for a Complimentary one hour Strategic Session to review your finances and write some goals for 2017.
Here it is 2017 America Saves Week (ASW), and Money Wise Advisors has teamed up with the American Savings Education Council to motivate, encourage, and support low-to moderate-income households to save money, reduce debt, and build wealth. The 2016 annual ASW survey assessing national household savings revealed:
Just two out of every five U.S. households report good or excellent progress in meeting their savings needs.
– 52 percent are saving enough for a retirement with a desirable standard of living.
– Only 43 percent have automatic savings outside of work.
– More men (74 percent) report saving progress than woman (67 percent).
-Those with a savings plan with specific goals (55 %) are making much more savings progress than those without a plan (23 %).
The research clearly demonstrates that those with a plan are nearly two times as likely to spend less than they earn and save the difference. America Saves Week is the perfect opportunity for my readers to set a savings goal, make a savings plan, and save automatically.
In 2016, I coached several clients to create a savings plan. Similar to the results above, those who believed they could, wrote down a goal, and signed up for an automatic savings plan achieved their goal. The easiest way to accomplish your savings goal is to sign up at your bank or credit union.
As we continue on our awareness journey, how much more secure would you feel if you had a $1,000 emergency fund in a savings account right now? Would there be less fear of getting a flat tire, a fence falling down, or a roof leak? Could you stop using the credit cards, and start working on paying down debt and savings toward future goals and retirement? Write down your plan, and take action this week.
So far this year we have you reading your bank statements, bills, and investments, and committing to an automatic savings plan. In March we will be looking at creating a basic retirement strategy. If you’re ready to increase your money awareness, contact me for a Complimentary one hour Strategic Session to review your finances and write some goals for 2017.
One of the reasons I like working with numbers is because I enjoy solving problems. Word problems, mysteries, puzzles, they all interest me. Like a good detective, I pulled these “Five Steps to Solving a Murder” from the show Unusual Suspects. It’s the same when we are looking for where all your money is going. It can be a complicated process, and the answer isn’t always the most obvious.
Document everything in the Murder (or Money) Book
Have a computer and/or file folder for all your financial records. Especially in January, take the time to read ALL your statements. Bank Statements, IRA from previous employer, credit card bills, car payment invoice, gym membership, phone, electricity and entertainment.
Record Every Step: Make a list of your monthly bills that are always the same. Next, list bills that may change each month, such as electricity and credit cards. Lastly, start tracking those bills you only pay occasionally, such as car registration, holiday gifts, birthdays, subscription renewals. Those will take a while to track as the year goes by.
Nail Down the Timeline: Total all the monthly bills to see how much you owe per month. Note the credit cards, car payment, student loans, the % interest, the minimum payment, and the date it would be paid in full.
Follow Every Lead: Read those statements carefully, are you being billed correctly? Are your payments being applied correctly? Are there any additional fees you don’t understand? Look at your credit report – are there any outstanding items you didn’t know about? Do you need help to negotiate the amount due?
Treat Everything as Evidence: Look at your year-end W-2 or 1099. How much did you make in 2016? How much was withheld in taxes? How much did you have available to spend? With the information from previous steps, can you figure where most of your money went? Do you see some holes? Were you surprised by how much you spent on groceries and eating out? Instead of trying to resolve last year, start on a better track in 2017.
Perseverance: Set some measurable goals. Negotiate some bills, follow-up to ensure the rate is reduced. Pay off a couple of small bills to get them out of the way. When do you want to increase your 401K contributions? Can you get your taxes done early, and use the refund to pay off some bills?
It is frustrating when you lose money and can’t solve the mystery of where it went. If you’re having difficulty with these steps, contact me for a Complimentary one hour Strategic Session to review your finances and figure out how we can solve your mystery.