fabulous finances

Reflecting on my financial wins and losses in 2008

2008-11-22T07:01:00.000-08:00

As we head into the last month of 2008, I am spending more time thinking about my financial intentions for the year to come. This past year, I experienced some ups and downs with regards to my financial situation. Midway through the year, I started a new job with a hefty pay increase yet when I take a look at where I stand financially today, I find myself in a tighter situation then a year ago. What happened?

For one, I experienced that bug that most get when they experience an increase in pay-an increase in lifestyle. I honestly could say that I I felt like I had the complete right to spend every additional cent that came in simply because I had it. When I reviewed my Emigrant account a few weeks back, I was amazed at how the balance had not moved. But how would it have moved, I wasn't putting any money into it.

So now as we endure through this uncertain economy, I have come to a solemn realization about my financial situation. I now realize that even though I earn what some would consider a decent salary, I have been living the typical paycheck-to-paycheck diet of the typical American.

The good news is that knowing is half the battle. Now that I find myself in a position of having the knowledge, I have no choice but to take action. I also know that action without forethought is of little value so I begin with identifying my goals and the possible barriers to my goals. One goal that I seem to be always chasing is to amass a full six months of living expenses. Because I receive the majority of my income in the form of a paycheck, I know how important this emergency fund will be in the event that I find myself without a stable income.

Diminishing my debt is another goal of mine. This month I've been able to pay off a $950.00 credit card balance with a 0% interest rate. The no interest rate offer was set to expire in a few weeks and, rather than transferring to another card, I opted to get rid of the debt once and for all. Debt is not a good thing to have in times like these. The more of your income you can hold on to, the better. With that large chunk of debt paid off, I'm left with even larger chunks of debt in the form of my student loan and two mortgages. I'm not letting the size of these obligations get to me. I still intend to remove them from my life like the debt that came before them.

Removing debt and saving is not an easy feat. One has to operate with a razor like focus with both objectives. It can be done. Achieving this goal is much easier if you have an ample amount of discretionary income. If you are convinced that you have not extra money. Think again. Gas prices are such now that you practically are experiencing abundance every time you fill up. Even if you decide to wait an extra day to fill up, you will save money.

So there is the overview of what my two main objectives are financially for 2009. I'll elaborate more on which methods I'll use to accomplish these goals in my upcoming post.

Does the thought of having money scare the heck out of you?

2008-09-28T04:27:00.000-07:00

Everyone wants to have more money, right? "The reason why I can't move ahead in life is because I need more money!" "If only I were making a little more, things would be going much better for me."

If you find yourself agreeing with these statements, you probably think of yourself as a rich person with a poor man's bank account. If you were to receive a huge promotion, things would change for you drastically, right?
Or would they?

I've heard it said before that in order to truly get on the path to wealth, you must create a wealthy mindset. A wealthy mindset means that you feel comfortable handling and managing increasingly larger sums of money. What I mean by comfortable is that you don't feel the need to sabotage your ability to become wealthy.

For example, let's say that you were to receive a bonus check or a large tax return, how long would it before the money was long gone? Would the money be used to increase your net worth or would you buy "nice things" with the money. As your income increased over the years with promotions and better job opportunities, have you consistently increased your level of spending? What about your bank account...if you find yourself with a decent amount just before payday, do you "reward" yourself with a nice dinner or some fancy digs?

A person who quickly spends any increase or surplus is in essence relaying a subconscious message that money is too much for her to handle or deal with. This person feels much more comfortable managing and operating with smaller amounts of money.

If I were to give you a couple of kittens,for example, and you quickly put an add in the paper giving away free kittens, I could tell by your actions that the kittens were not of value to you. On the other hand, if you kept the kittens, allowed them to breed as adults, sell their kittens, and repeated the cycle, I would know that you saw the value of keeping and maintaining those kittens.

In the same fashion, you must respect the money you receive and view it as a valuable tool. You can not raise your level of abundance without first respecting the money you receive. This means not being scared of having money and using money to generate more abundance for you. Every time you spend in excess until there is little or nothing left, you are sending out a very strong message about how you feel about wealth.

If you are currently earning $35,000 a year, and you'd like to earn more, take on actions that will help you become mentally aligned with more. Set up a 401K, pay down your debt, move your savings account to one earning a higher interest rate. Do something completely different that doesn't perpetuate the same results you are now experiencing.

If the thought of money does not scare the heck out of you, then prove it! Begin taking on wealth building habits one by one. You can start by just reading motivational financial books and move on from there. Keep going in that direction until the thought of wealth creation no longer scares but inspires you to take positive actions.

Why do the rich get richer and the poor get poorer?

2008-09-16T13:59:00.000-07:00

I heard someone say the other day that money tends to go where it is respected. The statement dind't quite sink in right away but after thinking about it for a few moments, I completely understood the truth of those wise words.

How many of us know someone who struggles to make it financially. Sometimes we think to ourselves, "If this person would just get a large sum of money, they could get themselves back together and get back on track." A short while later that person gets a large tax return, or a settlement fund, and months later, he or she is right back to where they started. What happened?

Chances are, this person did not respect the money. One of the definitions of the word respect from the Oxford Dictionary is "to treat with regard." Regard is defined as placing attention or caring for something. If the person who received the funds handled the money with attention or with care, he or would probably facing a different level of reality. Because the money was not respected, that person quickly found themselves right back to where they started financially.

So how does one show respect for money? One way is to focus on the attributes of money so you can work with (not against) it. Money likes to be multiplied. You know this to be true because of the power of compounding interest. A few dollars invested over time can multiply itself a thousand times over. Rich individuals understand and respect this aspect of money. Those who aren't wealthy view the money as a means to obtain tangible goods. This way of thinking is inherently flawed because the individual is essentially killing goose to get the golden egg.

The rich clearly understands the need to have geese producing golding eggs. In fact, a wealthy person will check on the goose frequently to make sure the goose remains healthy, steadily producing eggs. If a goose is not producing to standard, one who respects money will quickly seek out an alternate way of replacing the stream of eggs. If a wealthy person traded all of his geese for bigger barnes, or faster machines, how long would it be before that person was no longer wealthy?
Hence, even if you do not consider yourself rich, you can begin to respect your goose by placing it in an investment vehicle where it can produce eggs for years to come.

You can show your respect for the wealth you receive by placing a percentage of the money into your company's 401(k) or an online savings account. Once you begin to experience the wonderful feeling of collecting golden eggs, you can begin to seek our larger geese who will lay larger eggs. Continue in this behavior and you will inevitably become wealthy. Building wealth is not about having a priviliged childhood or lucky breaks. Creating wealth is about taking specific actions that encourage the flow of abundance. So think about your actions and consider whether you are killing your geese or if you are tending and caring for them. Even if your goose is just a tiny little one who is not yet capable of producing eggs, the way you care for it today, will determine how many eggs it can lay for you tomorrow.

Are your financial goals merely financial wishes?

2008-08-07T03:12:00.000-07:00

If I were to ask you to share with me a list of your financial goals, you would probably be able to rattle of a quick list of things you'd like to have or accomplish. Your list may include phrases such as "I want to be financially independent." "I want to be able to buy a home in the next few years." "I want to be debt free" and so on.
Once you've completed your list I would probably congratulate you on your ambitions and ask you what you are doing to reach your goals.

If you can easily describe specific and consistent actions you are taking to reach your intentions, then you can be confident that you are headed towards your financial goals. If, on the other hand, you are at a loss for words when attempting to detail specific actions you've taken to manifest your financial intentions, then you are fooling yourself into believing that your wishes are goals.

Wishing is defined as yearning for, desiring, or hoping for something to take place. By saying that you would like to have more money in the bank, you are aspiring for money. There is nothing wrong with aspiring for more and better. In fact, without our aspirations, we would be complacent and stagnant with our growth. Vocalizing our desires is quite noble and must take place if we are ever to better our financial situation.

It is when you stop at the yearning stage that things begin to go downhill. When you desire something and do nothing to support your desire, you are wishing for it to happen. You hope that somehow, someway, you will wake up one day and suddenly be free of debt. We both know that the chances of that actually happening is slim to none. Unlike wishes, however, your goal is the object of your ambition and effort. Your financial goals must be the object of your steady efforts.

So if I were to ask you about your financial goals, you should have the ability to detail the actions you are taking to reach them just as easily as you can describe the goals themselves. Your actions should be consistent otherwise your are teetering on the wish category. Inconsistency will have little impact on your financial outcomes. If you only save money once in a while, how much will that impact your financial standings? That's like eating fruit only once in a while and expecting to lose 20 lbs.

Take a quick second to mentally review your financial goals. If your actions are consistently aligned with what you want then your desires can truly be classified as goals. Wishing, to me, is almost as bad as lying to yourself. You say you want it, but you show no true evidence of wanting to make it happen. If you are lying to yourself you need to stop it!
Today you should spend some time thinking about specific actions, even if they are small steps, that you'll take consistently, to turn your wishes in reality.

Who wants to be a millionaire and why?

2008-07-17T17:53:00.000-07:00

How many people want to become millionaires? If this question were asked in a seminar, the majority of attendees would raise their hands. Millionaire status has now become the American Dream equivalent of the white picket fence in the U.S. While millionaire status is an admirable goal to strive for, many of us have not really asked ourselves why we truly want to become millionaires.

Sure we all want to be able to pay off our bills and have a little money set aside for emergencies, but getting to that point can easily be achieved with a bit of discipline in your money management. Do you really want to have a million dollars sitting in the bank? Is it the money you want or the lifestyle that comes with the money. Most of us would agree that if we could achieve a similar lifestyle without the exchange of currency, we immediately say yes to the change in lifestyle. If everything we free, would you even want a bunch of green paper with numbers on it?

With that said, we can avoid the dreaded feeling of lack by creating the closest thing to a millionaire lifestyle (in your opinion) as possible. So ask yourself, how would you create your version of the millionair lifestyle?

The first thing you want to do is verbalize your definition of the millionaire lifestyle. As you do, keep in mind that a million dollars ain't what it used to be. Millionaires can not honestly go around spending unlimited amounts of money on frivolities without eventually ending up in an undesirable situation (think lottery winners). How many times have we heard the stories of wealthy celebrities ending up in financial dire straits. The reason for the financial demise is because he or she did not live a realistic lifestyle in accordance with their amount of wealth, even if that person was worth a million dollars.

If you were to become a millionaire, you probably would spend most likely pay off your debt, save for the future, fully enjoy the time you have, give to the less fortunate, take on more leisure activities, and build stronger relationships. Feel free to add to this list according to your desires but I believe that this short list would be a part of everyone's agenda once they came into a ton of money.

So how can you live like a millionaire on your current budget? First of all you should let go of limiting beliefs that keep your mind closed to the possibility of living the life you've always wanted. Start by asking yourself, how can I feel more wealthy right now? One answer to that question would be to take control of your finances. Controlling what you do with your money gives you power over your finances. Watching the money grow from your actions will make you feel wealthier. The first step in creating a millionaire mentality is to start controlling your money, otherwise known as allocating your paycheck. Set up an automatic way of allocating your money properly so you can free up more time to focus on more important actions. When allocating, you should make sure to pay off debt and save for rainy days. Millionaires have money to pay for unexpected circumstances. Once you automate the allocation of your funds, you too will have money to pay for unexpected circumstances.

Another luxuary of the wealthy is the ability to better control your time. Wouldn't you want to have more time to do what you want to do? Well you do, you just aren't taking advantage of the time you have. You probably are saying to me, "I have to work forty hours a week, I don't have time do to what I'd like to do." Well I have news for you my friend, millionaires, on average, work around 70 hours a week. If you worked 70 hours, would you be able to watch the evening television shows you now are able to induldge in?

You should realize that you have been given the same number of hours in each day as someone who is worth millions of dollars. The major differences lie in how each person chooses to make use of the time given. Perhaps you don't want to spend your extra time creating or building a business, that is completely up to you. What you should do instead is figure out is how you want to spend your extra time. Yes that's right, I said extra time. Watching television can be relaxing but if you chose to watch television every single night and weekend, you are not living like a millionaire. Worse yet, you are spending your extra time on non-fulfilling activities. How many people would say that if they had a million dollars, they would spend every evening in front of the television?

If you had lots of money, you probably would involve yourself in more extracirricular activities. You may take up tennis lessons or some other past time. Why not take on your new hobby now? Tennis lessons may be expensive but if you enroll in classes from a community college or a local recreation center, you can experience a millionaire intention with your current cash flow. What else would you do if you were a millionaire? If you were purposeful with your actions, could you be able to experience some of those desires right now?

If you are living paycheck to paycheck and can not afford to spend on anything but your bills? You too can experience a life as a millionaire. To do so, you must effectively incorporate the habit of creative visualization. Yes, I know that visualization may not seem like an acceptable substitute for the real experience, but if used consistently and effectively, visualization will help you obtain the "millionaire lifestyle" in two ways:

1. You can actually see yourself as a wealthy person, and a such, over time you will begin to subconsciously take on the qualities of one who immersed in abundance.

2. You will generate the feelings associated with living in abundance. You will see your time as valuable, your relationships as valuable, and yourself as having great values. One major barrier you now have to living the millionaire lifestyle is not having the feeling of living in abundance. When you see yourself clearly enjoying the millionaire lifestyle, living in abundance will seem like second nature to you.

Stop focusing on the dollar amount you have (or don't have) and begin to pour your attention on the intangible qualities of becoming a millionaire. If you commit to doing so, you no longer will feel helpless because of the amount of money you possess. Instead you will begin to feel overwhelmed because of the amount of wealth in your life.

The right way to shop for quality without going broke

2008-07-09T14:07:00.000-07:00

As a self-proclaimed cheap person I often feel a sense of pride when I tell myself, and others, that I refuse to spend over a certain amount on basic items such as shoes, clothes and other necessities. Sales and clearance items always caught my eye. I relished every opportunity to brag on how little I spent on my personal items. The less I paid for an item, the more I believed that I had made a great buying decision. Lately, however, I have begun to undergo a mental shift in how I perceive my buying decisions. I started to cross over to the dark side and spend a bit more money on some of my purchases.

Whenever I do spend a little more for an item that I use frequently, I usually can immediately tell the difference between the quality of the item compared to its less expensive counterpart. After experiencing this scenario on several occasions, I finally had to make the decision to allow myself to purchase "higher end" items with a few ground rules:

Purchase high quality items at lower end retailers
There's no need to overpay for quality items when you can purchase the same quality for half the price. Stores such as Marshall's, Ross, Burlington, and TJ Maxx often have a great selection of name brand items at huge savings. Why pay a few hundred dollars for a high end bag when you can buy the same brand name product for pennies on the dollar elsewhere.

Spend a little more only on high quality items I use on a regular basis
I can not tell you how many times I suffered the consequences of buying a $10.00 pair shoes at a discount store. Because shoes suffer a lot of wear and tear, I found myself on more than one occasion with broken straps and severed heels, while out in public, as a result taking the cheap route with my shoe purchases. By spending a little more on better quality shoes, I avoid additional trips to the store and end up buying fewer pairs of shoes in the long run.

Never pay too much for high quality items
There comes a point where paying more for better quality goes too far. Paying a few dollars more for an item could mean that you are paying for additional quality but paying 200% or 300% more than the median cost for an item is an extreme. When you pay that much more for an item, you go well beyond the point of paying for the additional quality and you go into dangerous territory of paying more for the name on the product. That is not what you want to do. Avoid that situation by creating an expense threshold that you make sure not to cross.

Take better care of your stuff
Before deciding to spend a bit more money on some of my purchases, I wouldn't put much effort into the preservation of the item. Another $10-$20 dollars would not be a big a deal for me to spend to replace my broken or torn product. Now that I spend a little more for some items, I find myself taking better care of my belongs as a wonderful consequence. The more care I put into preserving my belongings, the more money I keep in my pocket by not having to replace that item.

Don't get me wrong, I still browse discount store and clearance racks for sale opportunities of a lifetime. The difference now is that I ask myself if the super-discounted price is worth the possible trouble and headache of having to replace that product in a short period of time. Spending a few dollars more for the quality may be a bit painful in the beginning, but in the overall scheme of things, I feel that I am holding fast to my "cheap" nature by not having to spend more money to buy that same item again in the near future.

Earn a higer interest on your money with tax lien certificates

2008-05-27T03:09:00.000-07:00

Ever since I read about tax lien certificates in Robert Allen's book Multiple Streams of Income, I have been fascinated at the idea of being able to earn such high rates of interest on an investment with very little risk. The basic premise of purchasing tax liens is that you are paying some one's overdue property taxes from the city government. You then wait out the redemption period, the amount of time a person has to pay back their past due taxes, and collect all of the interest and penalties accrued during that time. The rates of interest can get pretty high. In fact, in states like Florida, the interest rate is 18%. Other states can have even higher rates of interest. The best part of the process is that you do not have to live in the state that you chose to purchase your tax liens.

With my online savings accounts earning a measly 2.5% on my savings, I figured that now is a good time to get started in this type of investment. The first thing I did was read up on everything available on tax liens. Most of the information online duplicated itself but with each site I visited, I was able to learn just a little bit more about the process. I then found out when my local government would release the list of properties up for auction. After reading the information on my local city's website, I learned that I would have to register online to bid electronically. That meant that I did not actually have to participate in a physical auction at the government office. That would save me from getting into an emotional bidding war with the person across the room from me just because I want to beat him. This online process would allow me to keep my cool and bid in the privacy of my own home.

Once I was able to obtain the list online, I sorted the tax lien certificate amounts by cost. I only budgeted a certain amount for this year's investment, but if all goes well, I hope to have more to invest with next year. In the my county, tax liens ranged from $695,000 to under $100. That lets you know that you don't need a tom of money to get started in this great type of investment. Please note, however, that if you buy a tax lien for $100, the property owner has a greater chance of paying it off more quickly which means less interest on your money.

Then I researched all the properties in my price range by viewing the county's record. I looked at the address to asses the neighborhood. The reason why this step is so important is because if the person behind on their taxes is unable to pay the amount, you as the holder of the tax lien may be able to obtain the property free and clear (regardless of whether the individual has a mortgage on the home).
I have no interest at the moment of having to do a rehab on a distressed property so I visit is home to make sure that the properties I am bidding on appear to be move in ready.

The auction is coming up this Saturday so the next blog entry will detail the bidding process as I observed it. Be sure to come back.

In the mean time, here are some resources on tax lien certificates:

What you should know about investing in tax lien certificates
Tax Lien Investing Blog
Tax Lien Investing Tips

The actions I took that created my financial peak

2008-05-06T03:30:00.001-07:00

As of late I have been a bit disorganized with my finances. I can't tell you off the top of my head exactly how much I have in my 401(k). I'm not quite sure if I my net worth has gone up or down since the beginning of the year. It seem that I have backslidden from my life of financial responsibility. What caused me to get where I am and how am I going to get back on track?

In 2007 I was in my financial prime. I created excel spreadsheets to track my income, savings, and my net worth. Every pay cycle I would update how much I was able to save and how much debt I was able to pay down. Just that simple action once or twice a month would bring my financial situation to my consciousness. I consistently thought about how I could increase my net worth and improve my financial standing. Because of that, I was able to increase both the amount of money I saved and the amount of debt I paid off dramatically.

So far this year I can't say that I am heading in the same direction. This year I am technically making even more money than last year because of an annual pay increase. My spouse is even doing a little better financially and can provide some help on the expenses. Yet still, I am almost positive that I was doing much better this time last year than I am right now. This year, my personal finances are not at the forefront of my thoughts. As a result, my decisions are not fully driven by my financial goals. Instead I am making decisions based on if I could afford to purchase. Just because I can afford to do it, doesn't mean that I should do it. Short term, I am not making a major impact on my finances, but by the end of the year, I'll be way behind where I need to be.

So now that I have confessed, I am ready to repent. My first course of action will be to update the spreadsheet that lists my assets and my debts. This will give me a clearer picture of my overall financial status. Once I have those numbers, I will create very short term goals for myself. Goals such as "I will save this much money by the end of the month." Then my goal will be to save a certain amount by the end of the year and to have paid off the rest of my credit card. The card is at a 0% interest rate so I have not been in a rush to pay it off. Even though I am not paying any interest to those people. Just the very fact that I am indebted to them should be motivation enough to wipe it out.

My hopes are to save 6 months worth of living expenses so I can allocate any "extra" income to my student loans. The economy is not getting any better to now is the time to buckle down. I am excited to get back on track with my finances. Last year I was so impressed with how much progress I made just by being consistent with my tracking. The system I created was so effective that I did not have to budget my income. I just merely allocated it. I didn't feel deprived yet I was able to increase my net worth dramatically. Take a look at your overall financial picture. Where do you stand? Do you have some short-term financial goals that you'd like to accomplish?

Where will you be financially at the end of the year if you were better allocating your income today?

Learn why allocating your paycheck is the key to becoming wealthy

2008-03-29T03:25:00.000-07:00

If you were to ask me what the most important step the average person needs to take in order to get a handle on their finances, I answer with this phrase, “don’t spend your money, allocate it!”
What’s the difference between these two phrases? Is there really a significant difference between spending money and allocating it? If so, what?

The difference between spending and allocating is as evident as the differences between enjoying a relaxing massage or having your entire body waxed. Both activities involved receiving contact over your entire body but one is pleasurable and decadent while the other is excruciatingly painful. With that said, your best bet to repairing your financial burdens is to develop the habit of allocating your money. Allocating is pretty much the same as budgeting but it has a more powerful ring to it. Budgeting carries a stigma, which is why most of us avoid it like the plague. Budgeting is the financial equivalent of a diet and most of us equate overspending with the mischievous act of having too many desserts.

Perception plays a huge role in how you handle your money. If you think of your money as a reward given to you for your 40 hours of work, you will spend it. If you see your money as an asset which can be used to generate more assets, you will allocate it wisely. When you spend your money you run the risk of allowing it to dwindle away. A person who spends their money usually has to take some time to account for it after the money is gone. The act of spending money is not a conscious action, the spending happens to your money, not the other way around.

Allocating your money, on the other hand, is completely different. A person who allocates their money is has a purpose for every dollar she receives. Someone who allocates their money realizes the value in their income and the benefits of using that money wisely. Some of the money is set aside for expenses, some for giving, some of the money is saved for emergencies, and another portion is dedicating specifically to creating wealth. The person who allocates wealth does not usually find themselves in a predicament where he or she broke with several days until the next paycheck.

So how do you begin to allocate your income?

 Start with a plan. Your allocating should begin even before the money gets to your hand. Once you have the money, you simply proceed as planned. Follow the steps that you outlined beforehand and you have less to worry about when the money comes.
 Create long term goals to keep you motivated. If you have a goal to get out of debt or buy a large ticket item, chances are you will have a hard time reaching that goal unless you become skilled in the art of allocating your income. Think of how good life will be to have reached that financial goal of yours.
 Review your progress often. Writing down a plan is not good enough. You need to go back and see how you are doing. If you spend less than anticipated in one area, you need to adjust accordingly before you end up spending the surplus frivolously. If you spend more than you allocated in a certain area, you will have to make adjustments to your spending in other areas so you do not fall into the trap of the person who spends unknowingly.

Commit today to become a person who no longer spends without purpose. Your very next allotment of income should be allocated towards your purpose and goals. Make this process as easy as possible for you so you can stick to it. Focus on the long term benefits of this practice and use your goals as your motivation to remain consistent. Before you know it, allocating your money will be like second nature and you won’t have to worry about what to do when your paycheck mysteriously disappears long before the next one comes.

Powered by ManhattanService

Always broke? Here are five reasons why you struggle financially

2008-02-13T04:24:00.000-08:00

Many of us struggle to put our financial lives in order. Our money situation only seems to get worse with each passing day. The financial strain is unbearable and you finally decide that you are no longer desire to accept your circumstance as reality. Understanding the root causes of the problem is the first step towards improving your financial standing. Here are the main reasons why your financial situation is not where it should be.

You have no idea where your money is going
The main reason why your paycheck has a lifespan of a fruit fly is not because of the amount of money you earn. A person can earn $10,000 a month but if they spend $10,100 a month, that person will be broke. This is the why we often hear the accounts of lottery winners losing all of their money in a relatively short amount of time. If you can not account for every dollar spent from your last paycheck, you are at risk of losing your hard earned cash on frivolous spending without even knowing how it happened. When you track what you spend, you are making sure that you have money left over by cutting expenses in certain non-essential areas like eating out or shopping.

You do not put your money to work
Your money can work harder for you than you can work for your money. Unless you understand the way money works, you will continue to wonder why you can not accumulate wealth. Saving is a good thing, but investing your money is better. You can even start with an interest bearing online savings account. These accounts require little to no minimum balance and pay you every month for the money you save. Once you start seeing the monthly interest deposits into your account, you will wonder why you had not done this sooner. The absolute best thing you can do for your financial health is think your money as employees and make them work as hard as possible to bring more income for you.

You buy things you can not afford
When you make purchases with your credit card and fail to pay off the balance when it becomes due, you bought beyond what you could afford. The math is simple. One minus two equals to negative one. Financially sound people seek to obtain a positive net worth. The goal of obtaining wealth is to actually have more money than you owe. Your long term goal should be to reach a positive net worth by owning more assets than liabilities. As long as you continue to spend in a way that maintains your negative worth, you will struggle in your personal finances.

You do not plan for the future
Part of the reason we use credit cards is because we did not save for a rainy day or expected emergencies. Looking ahead is an important aspect of your financial health. A portion of the income you receive today should be allocated towards your future. Planning for your future will ensure that you do not have to struggle during your retirement. Planning for your future will ensure that you will even be able to retire when the time comes. Start focusing on your future today and make decisions that will secure your financial situation long-term.

Job hunting? Five things you need to do to find your next job

2008-01-29T03:07:00.000-08:00

When we find ourselves without a job, we have a deep sense of uncertainty by not knowing when the next job opportunity will find us. As an active job seeker, you must differentiate yourself from countless others who are vying for the same opportunities. The key to getting your desired job is to create the perfect strategy from start to finish. Here are some tips on how to obtain the job you want.

1. Create a game plan-Finding a new career is a large undertaking. You must not take it lightly. By starting with a plan, you can determine which direction to take your job hunt. Are you starting in a new career? Do you want more money or are you looking for more stability? How will the experience gained from your last place of employment benefit your new employer? These are some of the critical questions which will help you make good decisions about your job search and save you much needed time in the process. By figuring out your main objectives ahead of time, you will better focus your search and increase the likelihood of getting the job you desire.

2. Work hard-Even though you are not actually working, you should think of your job search as a full time job. For each job opening there are countless resumes with similar qualifications and skills. You are hindering your chances of getting the right job if you are only submitting a only few resumes a week. You should also spend time researching the companies with available openings to make sure you chose an organization that offers what you value most in a workplace. If you are not investing quality time in your job search, you may find yourself being offered a position that is far below your potential.

3. Find out what the company wants-When a company has a job opening, they have a specific idea of what they need. If you do take the time to review the job description carefully, you may end up submitting a resume that does not fit their idea of a qualified candidate. Your resume should look very similar, in experience, to the the skills listed in the posting. But what if you have never done the job that you are applying for? Ask yourself this very important question "what have I done in my previous jobs that are similar to the skills they are looking for?" For example, suppose you are applying for a position in a call center. They are looking for experience but you have never actually worked in a call center. When you ask yourself the important question, you determine that you were constantly resolving customer complaints at your last job. This is a skill that is valuable to that company. Highlight the skill by elaborating the details of that job function on your resume and cover letter. Finding out what the company wants is not easy at first, but if you take the time to read the job description, you can better present yourself in a manner that fits the company's needs.

4. Follow up-The technology driven world we live in hinders job seekers from making the all important human contact that can influence their ability to get a job. For job positions that you especially want, do not be content with simply submitting a resume. Perhaps you can place a follow up phone call to the Human Resources department ensuring that they received your resume and inquiring about the interviewing process. Or you may even be able to visit a physical location to complete a paper application. When you are there, you can strike up casual conversation with someone there about the details of the company and learn more about the job. You can ask what specifically what type of candidate they are looking for. If you do these things, you are already gaining an edge over those who simply submitted a resume and took no further action.

5. Network-The best thing you can do when looking for a job is to let others know that you are on the market. Do not simply say that you are looking for work. Say that you are looking to broaden your knowledge and use your experience to take your new organization to the next level. Provide some specific examples of your potential, that you prepared when you created your game plan, and how you are eager to use your talent. Join one of the countless professional organizations that meet regularly. Call your friends and let them know that you are ready for the next step in your career. Talk about your career change in the most positive, confident way you can and do it often.

When you look for a job you can think of it as a dreadful experience or you can think of it as an exciting opportunity to challenge yourself and to meet new people. You should be just as professional in your job hunt as your will be in your new job. If you put in the necessary effort, you will be rewarded accordingly.

Powered by ManhattanService

How to curb impulse buying

2008-01-27T06:06:00.000-08:00

I strongly believe that our spending falls into two major categories, functional and emotional. The functional type of spending occurs when we pay for our normal, basic necessities. When we first put our budget on paper, everything looks pretty good. The household expenses are accounted for, money is set aside for gas and groceries, and there may even be a bit left over to save. Then the end of the month comes and you realize that you, once again, spent more than budgeted. You promise to do better next time. Here are some steps you can take to avoid emotional impulse buying in the future.

Hide the money
Once upon a time I would allow the money left over after my bills were paid to linger in my checking account. That was a disaster waiting to happen. I realized that if the money sat in my account, it was basically left over money that should be spent on frivolous purchases. Instead of continuing to leave money in my checking account, I implemented a strategy of transferring the bulk of my discretionary income into my online bank account. Because this online bank does not offer check cards, I had no easy access to my money. Any transfers to my local bank took 2-4 business days. The money was there if I really needed it in emergency situations, but I did not have the luxury of simply swiping away my money because I saw something I instantly wanted in the store. This technique does require that you adequately plan for all of your expected spending so you do not find yourself with a bill due and your money "hidden" in another account for 3 more days. By implementing this technique, I was able to decrease to decrease my urge to spend the money in my checking account without much effort.

Give every dollar a name
Budgeting is crucial when managing your finances. Not only is it important to budget your basic expenses, you must continue to allocate your money into categories until you have nothing left. If you have a hard time finding additional categories, start to think about goals you want to accomplish and how that money could help you. This way you will have to forgo something in order to purchase your whimsical item. If you decide to go ahead and buy your must have item, you are giving up the possibility of saving up for a down payment on a new home or becoming debt free.

Just say no
Too often we find ourselves in a position of spending too much money because we simply did not tell ourselves, or others, no. We said yes to meeting a friend for lunch even though it was not part of the budget. We said yes to buying those fancy shoes, even though we knew we would have to pay for them on credit. I know that coming out and saying no can be a difficult thing to do. So think of alternatives instead. Tell you friend that you have exceeded your eating out budget and invite him/her to walk in the park or watch a movie at your place instead. Another alternative to buying an item on impulse, is to tell yourself that you will see if you can incorporate the item in your next budget. Chances are, you may not even still want the shoes by then. The more you are able to think of alternative options to simply spending more money than you have, the more you will develop the habit of sticking to your budget.

If you implement all three steps into your budgeting and spending routines, your emotionally charged spending habits will be one less thing financially,that you have to worry about.

How to get a raise at your current job

2008-01-20T04:41:00.000-08:00

In our quest for creating wealth, our focus should be primarily on investing in vehicles which will provide us a decent return on our money. But the money we will use for our investments come primarily from the income we receive from our place of employment. Therefore receiving a pay increase should be a goal of yours. No, I am not talking about the standard 3% increase given to you because it seems like the right thing to do. I am talking about substantial increases above and beyond the normal annual pay raises most employers normally give.

Exceed expectations
Every position comes with a set of expectations of what is required for you to do your job, do your job well, or do more than is expected for someone in your position. Your goal is gain more responsibility than your current position requires. The key is to do your work faster and better than anyone else at your place of employment. You may think that you have too much work as it is, but the truth is that our work days are normally filled with interruptions, unimportant conversations and other time wasters. Think about how much work you can complete if you analyzed your work day and redesigned it to make it as effective as possible. The more effective you become, the more time you free up to ask for more responsibility. Once you have it, work diligently to exceed those expectations as you did with your normal work assignments.

Work to impact the bottom line
As you methodically plan the most efficient ways to complete your job, you should also ask yourself what you can do to directly impact the bottom line. Impacting the bottom line means both making and saving money. The answer will not come easy at first but the more you simmer with that notion, the more you will begin to see the answer(s) revealed to you. Ask questions about the processes and systems currently in place in the organization and make informed suggestions. Make sure you have done some research and have any numbers necessary to support your ideas. Even if your suggestion is not implemented, you will begin to create the reputation as the person who has input on how to manage the organization's processes. If you are in a position where your job impacts the bottom line, like sales, you are in a very fortunate position to change your personal income. Fine tune your skill, find the highest producer in your company and ask them about their techniques over lunch. Read sales books and attend seminars. Do whatever you can to increase your skill level.

Ask for a raise
Sometimes, your employer may not be willing to simply give you a 15, 20, or 50% raise on their own. Sometimes your boss may require a little nudging. Before you ask, take inventory of everything you have accomplished over the past year. Speak in terms of how your actions have impacted the business directly. Your boss may not care how well you did completing your tasks unless your actions had a more organization wide impact. Clearly demonstrate how invaluable you are to the organization by detailing your progress, and your personal goals for the upcoming year. Do some research online for other companies who can use your talent for a higher salary. Tell your supervisor that you do not wish to leave the organization but if your talent will be better received by a competitor, then you have no other choice. You will be surprised how much of an increase you receive if you simply ask for one.

Get a promotion
If there is a limit to how much you can make in your current position, it may be time to look up the ladder for other opportunities. Generally a promotion means an instant salary increase without having to wait for annual review time. Set your sights on what position you would like to interview for and prepare now. As in internal candidate your past performance will be critical when management makes their decision. This is why you must perform in your current role as if you are completely over qualified for what you do today. Focus on the position you want and ask for special tasks or projects that will prepare you for the role. Do not be afraid to let management know of your interest in the position and their recommendations of any areas of opportunities you should develop before you officially apply.

These are just a few of the actions you can start to implement at you workplace to get you a larger paycheck. Once you receive your much deserved raise, you have to be careful not to "blow" it by creating a higher standard of living for your self. Clear any outstanding debts with your extra income, then begin to create wealth with it.

Powered by ManhattanService

Saving like the wealthy

2008-01-20T04:33:00.000-08:00

Saving money is one of the pillars of creating a wealthy lifestyle. But not all savings methods are created equal. As a general rule, you should use your savings accounts for money that may be needed in the near future for purchases such as a home, car, or as an emergency fund. The key to saving smart is to earn the highest rate of return possible on your money.

Traditional banks offer little or no interest on the money you place in your personal accounts. What you may not know is that the money you put away is earning a high interest rate on loans the bank provides their consumers. Your money is making the bank money. Why not get a bigger piece of the action by placing your money in an online bank account. Online banks do not have the high overhead of physical banks. They are able to offer much higher interest rates to their customers and often require no minimum amount to get started. Another benefit of an online bank is that your money is much more accessible than other savings methods such as certificates of deposit (CD’s). If the bank is FDIC insured, you have a government backed guarantee that your money is protected up to $100,000.

Wealthy people leverage other people’s money when making wise investments. You can leverage other people’s money when you enroll in your company’s 401(K) program. Most organizations are offering a match to your contribution amount. That match is sometimes as high as $100% of your contributions. Where else can you find a guarantee of 100% on your money? If you are not currently enrolled in your company’s 401(k) plan, do so today!

Another key to saving like the wealthy is to take the money you save from smart purchases and put it to work. You get no benefit from finding the best deal on groceries, if you turn around and spend your savings on something else. The key to saving wisely is to take the money saved from lifestyle changes and placing it somewhere that it can grow for you long-term. Remember that your money can work harder for you than you can work for your money so make a commitment today to begin saving like the wealthy.