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budget

Living a Financially Balanced Life

By | 2020, Money Matters, Newsletter | No Comments

Applying a balanced perspective has an impact in many areas of our lives, from eating to working to playing. Finances, today and in the future, should receive the same balanced approach.

When thinking of our financial plans, we tend to look to the future, but what about today? It is important to establish financial goals and work towards them, but it is also essential to live your current life with joy.

We work hard and save wherever possible with a goal to enjoy life in retirement. This is commendable and vital if we want to maintain our lifestyle into retirement. However, it is too often that people plan for future adventures and then are not able to enjoy them because of health issues or even death.

Keep in mind the little things.
To stay balanced within your budget, or spending plan, be sure to give yourself some mad money. I am not proposing that you throw caution to the wind, but within your monthly budget, permit yourself to spend a predetermined amount on something that brings you joy even if that means getting an ice cream cone or pedicure. Nothing can take the wind out of your sails or blow up your spending plan quicker than eliminating all of the little things that make you happy.

Enjoy adventure along the way.
Rather than thinking you will take a huge trip when you retire, include adventure and fun in your life now. When you look back on your life, the memories you have with your family and friends will be what you remember. I can honestly say I have not had a client reminisce about days they spent in the office or attending business meetings, or cleaning the house. They talk about time spent with family, traveling, charity work, or doing something they love.

One of our motivations is to help our clients create Life Centered Plans. This is different from a typical financial plan because it focuses not only on saving for future goals but also helping clients use the money they currently have to do things that bring them joy now.

We all have a limited time left to live our lives. I challenge you to spend that time living a financially balanced life!

If you would like more information on Life Centered Planning, contact us at 801-355-8888.

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Get in the Right Lane

By | 2019, Money Matters, Newsletter | No Comments

Missing a freeway exit can be extremely aggravating. Once missed, you are required to drive farther away from your destination. It can happen for many reasons; being in the wrong lane, missing an exit sign, or heavy traffic preventing you from getting over. Once you realize you have missed the exit, you immediately begin making corrections so you can exit at the next opportunity.

Financial success can be like the freeway. You may be headed in the right direction, but are you making the right decisions? Here are some behaviors that may keep you from reaching your financial destination:

  1. Spending more than your planned budget. One of the greatest concerns of retirees is running out of money. The goal of a financial plan is to make sure your money lasts as long as you do, even if you live to 100. If you are depleting your nest egg too quickly, you should change lanes. 

  2. Giving money to kids. When adult children are having financial troubles, giving them money may seem like the right thing to do. That is not the case. In most situations, it just prolongs the problem. If you are bailing out your adult children, you should change lanes.

  3. Paying for things you don’t use. This could be a gym membership, a storage unit to hold more stuff, or the RV and toys that rarely get used. Letting go of these things has financial and psychological benefits. You no longer worry that these items are going unused. You can rent an RV for a vacation if you want, and most of the stuff you are storing is of higher value to you than it may be to your kids. Ask them what they would like to have and get rid of the rest. It’s refreshing! If you are paying for things you don’t need, you should change lanes.

Look at your financial goals. Are you on target to reach your financial destination? If not, I challenge you to make a lane change – make the needed corrections and continue to move forward. Don’t let anything keep you from reaching your financial destination. Having a plan can keep you headed in the right direction and the right lane.

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Where does all the money go?

By | 2018, Money Matters | No Comments

Why does the word budget feel like a personal judgment? Maybe it’s because creating a budget may uncover the spending we know is happening, but don’t want to address. It brings out some feelings of guilt.

Let’s ditch the word budget and call it a spending plan.  Now we are in control. The truth is following a spending plan provides some freedom. Regardless of our age, we need to have a plan. When starting out, a spending plan allows us to have what we need for today while also planning for future needs. It gives us the green light to spend a predetermined amount on things we want and enjoy. Without a plan, we spend first, then save what’s left over. This is a recipe for financial disaster. Too often there is nothing left over at the end of the month. The result, nothing gets saved for the future.

Later in life, we have some financial flexibility and incorrectly believe we no longer need to worry about a spending plan. This is also a recipe for financial disaster.  At retirement are income sources become limited. Making sure our nest egg is available to provide income for the lifestyle we want, throughout our retirement years, becomes paramount. After all, who wants to reduce their standard of living at the time we should be enjoying the fruits of our labor?

Creating a spending plan will take some thought and time but it doesn’t have to be overwhelming. Here are some tips:

  1. Look over your expenses for the past year to determine where your money is going. If you haven’t been tracking your spending, begin doing so.
  2. Categorize your expenditures by non-discretionary and discretionary.
    a. Non-discretionary includes things you must have; groceries, mortgage, rent, utilities.
    b. Discretionary includes things you like to have; cable, eating out, entertainment.
  3. Determine your goals – saving for retirement, down payment on a home, travel.
  4. Decide how much you need to put aside to reach your goals. Then break it down to a monthly amount.
  5. Review your discretionary spending to determine where you could cut back in if needed.
  6. Follow your spending plan. In the beginning, it will be hard and may require a few tweaks.
  7. Use an app or excel spreadsheet to help track your spending.
  8. Review and adjust regularly.

Now congratulate yourself. You have taken the first step to financial freedom!

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Back to School College Planning: Real Advice from a College Student

By | 2016, Money Moxie, Newsletter | No Comments

College. When being described by those with a diploma hanging on the wall, it is a golden age of lasting friendships and high-stakes pranks. When imagined by youngsters that haven’t flown the nest, it is an escape from the demanding thumb of the parents. True, college is a great place to meet new people and discover independence; it is also a challenging time of learning to balance life with money.

The average college student graduates with $24,000 in debt, according to the Project on Student Debt.

college_debt

College doesn’t have to be four years of ramen noodles and Friday nights at home—with the right money management, any college student can have the same outlook (even if it is forty years in retrospect) as those that have moved their tassel.

Tip #1: Look at the Long Run
For as many times as the incoming freshman has been told: “College opens up so many doors, do whatever you want to do,” just remember that you cannot do everything that you want to do. Doing everything you want, satisfying every craving, or buying each impulse item will wipe out a bank account before the end of first semester.

Think about what will matter in a few years, rather than the latest craze or obsession. Will Jerusalem Cruisers last? Probably not. But having enough money to pay for next semester’s rent will matter. Save money for the long run, rather than spend it on something temporary.

Tip #2: Be Budget Friendly
The best way to manage money is to have a set budget and stick with it. Download one of the hundreds of budget-making apps (Mint is recommended), and decide how much you are going to spend and save each month.
Don’t just budget for bills and tuition; also budget for food, dates, books, and socializing. Being budget friendly goes beyond just having a reminder of how much you are supposed to spend though—you have to obey your own rules.
Find ways to cut back, whether it’s buying used textbooks online, having a suburban mom’s coupon book on hand, or trying your hand at a homemade meal. Many college campuses have fun free activities you can participate in. Having a budget will help you save money while still having enough for the essentials.

Tip #3: Shop Savvy
Taking a trip to the store is a dangerous activity; financially, that is. There are hundreds of options and sales, not to mention the pushy salespeople. To stay safe, shop savvy. Know exactly what you need to buy before you even enter the store, and how much you can spend.

Paying with cash is a great way to keep from going over-budget. Swiping a credit card is easy—sometimes too easy. It is easier to spend less when shopping with tangible money.

Be careful about the 5-buck-or-less temptations; those little buys add up quicker than you think. Finally, avoid impulse buys by making a 30-day waitlist. Put random finds and wants on the list. If in a month you still want something, chances are it will really add to your life.

Tip #4: Invest Early
Saving throughout college is the smart thing to do; automate your savings whenever possible. Leaving it in a bank or taped to the back of the toilet, however, isn’t always the best choice. If you’re not swimming in student debt or fishing coins from public fountains, it’s a good idea to start investing.

Before you jump in and make rash decisions, read up. Use the library and find out what will work best for you.

Whatever path you choose, start small. Diversify your investments, and plan on a regular schedule. By investing early, you garner one of the greatest advantages: time. Even if your investments are small, they will grow with time.

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Summer Fun!

By | 2015, Money Moxie, Newsletter | No Comments

Everyone should have a “bucket list.” On mine, you will find “swim with dolphins in a tropical paradise.” Last summer, I visited a luxurious resort right on a Mexican beach and I swam with dolphins! Below are tips I used for my magical vacation:

1. Create a vacation fund
Every month put some money into your vacation fund. Consider an automatic transfer and when you come across extra money (tax return, bonus, or inheritance), add it to your vacation fund.

2. Create a trip budget

  • Transportation – airfare, rental car, parking, gas, taxis
  • Lodging – room rate and hotel taxes
  • Food – groceries, meals, drinks, and snacks
  • Entertainment – tickets and fees for national parks, amusement parks, museums, excursions, and other events
  • Gifts and souvenirs
  • Currency conversion (if traveling internationally)

3. Travel discounts
Spend time looking for deals on hotels, airfare, excursions, etc. Don’t be afraid to ask for additional discounts before booking. Tell them you are shopping for the best deal and let them compete for your business.

4. Expect the unexpected
Flights get delayed, weather changes, credit cards get lost. Be aware and set aside 10 to 15 percent of your travel budget for emergencies or surprises.

You don’t want to spend the next twelve months paying for last year’s vacation, long after the fun has faded.

If you can’t afford a dream vacation this year, you can still enjoy summer! You can cut costs by taking advantage of attractions closer to home. Spending time with those you love without spending a lot of money may sometimes bring bigger rewards than an expensive splurge. With a little extra planning you can make your summer one to remember and make memories that will last a lifetime.

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