Financial Health
Weekly Roundup – Loose Change Edition
We have moved and settled into our home – well, at least we’ve moved! It will be a while before we unpack the last box, especially since I went back to work today and left a house full of boxed up stuff for the family. Pretty sad when you go back to work to rest up!
Over the weekend, while packing, I came across a handful of change. With my coin jar already packed, and time running out to move, I felt like tossing the change in the trash bag and moving on. But that would have really hurt me! After all, the $1.30 I collected under sofa cushions represented about a year’s worth of interest on a $100!
Can you believe some people actually throw money away? Don’t believe it? Check out the fifth article below.
The Frugal Roundup
7 Critical Ways You Need to Take Your Life Off Autopilot. Here is a great list of things that you should really focus on. (@ My Super-Charged Life)
Redbox Testing $2 Per Night Rentals. Redbox has started testing $2 per night rentals. Will you still rent from them with that type of increase? (@Your Money Relationship)
A Little Food Planning Goes a Long Way. It’s always a good idea to plan your meals ahead. You can save a ton of money and always have what you need. (@Million Dollar Journey)
Master Your Money with a Financial Health Day. When you have your financial health day, make sure you involve you spouse in the decision. (@ Get Rich Slowly)
Why Throw Money Away? Yeah, this person really throws money in the trash. Seriously. (@The Suns Financial Diary)
How to Become a Successful Secret Shopper and Supplement Your Income. Need some extra cash to beef up your budget? Become a secret shopper! (@Generation X Finance)
Best of the Rest
- The Productive Art of Positive Thinking
- How to Find More Time During the Day
- The Bucket List
- Why Lottery Winners Go Broke: Prospect Theory at Work
- My Grandfather In-Law: A True Veteran Hero
- House Hunting Tips For Busy Parents
- Frugal Ways to Celebrate the Holidays
- Have You Ever Taken Risks to Try and Improve Your Career?
- What’s Luck Got to Do With It?
- 31 Days of Organizing for a Better 2010
- Interview Your Interviewer
Post by Frugal Dad
Stop Feeling Sorry For Me – I’m Frugal, Not Broke
The other day I had problems with the old van I drive to and from work. A friend saw me struggling to get it started in my employer’s parking lot, and the next day said, “Man, I felt bad watching try to get the old van running. When do you think you’ll be able to buy a nicer car?”
That afternoon, while standing outside waiting on a ride home, and feeling a tad bit sorry for myself, it occurred to me that living frugal often gives people the wrong perception of your financial health. When others see you making frugal choices, they automatically assume you are doing it because you have to, not because you want to. Sure, I could go out and sign the next five years away with a new car loan, but I choose not to.
Over the last year or two there has been a growing trend towards frugality, and many people in the media are anxious to see if it lasts. Unfortunately, I don’t think it will, for one main reason.
Most Americans, myself included for far too much of my life, are overly concerned with what other people think of them. I mentioned the ability to ignore what others think of us briefly earlier this week, as part of my seven steps to financial independence, and Neal mentioned comparing ourselves to others in yesterday’s guest post. Living a frugal lifestyle means living within our means – our means, not within a fairytale lifestyle depicted in the media as the norm.
As we go through our day making little sacrifices here and there, voluntarily passing on opportunities to spend a lot of money, people not living a frugal lifestyle will naturally assume we can’t afford to keep up with them. That’s fine; you can’t control their thoughts and assumptions.
The fact is, most frugal people are in much better financial positions than those feeling sorry for them. The classic example is Sam Walton, who right up until his death drove an old pickup truck around Bentonville, Arkansas. Those who didn’t recognize him probably thought he was just an average guy not able to afford a “nicer car.” We now he could have easily carved $60,000 out of his billions for a shiny new Mercedes, but he didn’t need one. His old truck suited him just fine.
Unfortunately, most of us don’t think that way. So the thought of living frugal frightens many egos out there into thinking they may not appear as successful, or wealthy, if they shop at thrift stores, drive old cars, cut their own hair, clip coupons, and make their own homemade laundry detergent.
Just remember my take on a line from Dave Ramsey: If people are laughing at you, or feeling sorry for you, you are probably doing something right when it comes to your financial plan.
Post by Frugal Dad
From the Boardroom to the Kitchen Table: Managing your Household like a Business
People often can be successful in the business world but clueless when it comes to managing their own finances. A business-minded strategy is a great way to manage and organize your household finances.
“Business advice can translate into wise decisions for your personal finances,” said Heath Tudor, consumer liaison for Resqdebt, a financial health management company in Allen, Texas. “Using simple business practices, you can easily make your house more profitable and efficient.”
Tudor suggests these steps for managing your household finances:
Create a Plan- All businesses begin with some sort of a plan, both short term and long term. Plans help guide decisions and direct you where you want to be in a certain amount of time. Build a plan around your goals. Budget for everyday expenses, emergencies and long term plans.
Track Spending- Businesses often use spreadsheets to track income and expenses. This lets them know the state of the company’s finances at anytime. Tracking your finances will help you visualize your situation and make better decisions. However, you don’t need an expensive or complicated bookkeeping program to track your finances. Check out free online bookkeeping tools or create your own spreadsheet. Record everything that you bring in, spend and owe.
What comes in must be more than what goes out- In business you want to bring in more than what you are spending; the same should apply at home. As you track your finances, look at your income and your spending habits. If you are coming up short every month or using your credit cards to cover purchases, you need to adjust your income-to-spending ratio.
Cut Down on Expenses- Businesses want to keep expenses low so that overhead does not cut into their profits. You can’t always change how much money you bring in but, you can change what you pay out. Examine your bills and find places where you can cut down on monthly expenses.
Conduct Reviews- Review your plan weekly, monthly and yearly. Make adjustments and track your goals.
Overall, the most important thing for your household finances is to stay organized. Know what you are spending and always remember the bottom line. These steps will help you become more profitable and the CEO of your house.
Post by Frugal Dad
My Summer Fitness Plan: Lifting Weights & Pumping Fiscal Goals
Summer is a great time for physical fitness, and I am lifting weights twice a week. But beyond the beach-ready body, we should also think about boosting our fiscal fitness.
To beef up my finances, I purchased a July 2009 - December 2010 calendar last week. The calendar — 20 percent off — is designated for tracking my financial goals, which include saving money for my kids college education, retirement and the all-important emergency fund. The new calendar, even has a built-in pocket for receipts and other papers.
Goal-setting is just one of several fiscal fitness tips recommended by the folks at Women & Co. Here is one fitness plan:
“Assess Your Health: Gather all important financial statements and review what you own, your assets, and what you owe, your liabilities. Look carefully at how you’re putting your hard-earned cash to work – what you’re earning, spending and saving. Then set aside some time every few months to file important papers and keep them organized.
Know Your Numbers: Your credit score is a key indicator of your financial health. It’s a primary criteria used by lenders to determine your likelihood of defaulting on a loan and that may impact your ability to get many types of loans, including a mortgage. Request your free annual credit report from each of the 3 major credit bureaus at www.annualcreditreport.com.
Set Your Goals: Once you know where you stand today, set goals. Short-term goals are those you’d like to accomplish within one year (e.g., pay off credit cards); mid-term goals, within 5 years (e.g., make down payment on a new home); and long-term goals, 5 years or more (e.g., save for retirement). Write these down, using the worksheet from Women & Co. to help you clarify and prioritize your financial goals.
Protect Yourself: Maintain appropriate insurance coverage; keep your beneficiary forms for your 401(k), IRA and insurance up-to-date; and put your wishes in writing by executing a will, living will, power of attorney and health care proxy.
Conduct Annual Check-ups: Review your finances at least once a year with your financial advisor. Keep in mind that life transitions such as having a child, getting married or divorced, or moving to another state, often bring with them financial, tax and legal implications.”
–quoted material from Source: Women & Co.
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Sharon is the author of the Frugal Duchess: How to Live Well and Save Money – a coming of age memoir about money — and a contributing writer in Wise Bread’s 10,0001 Ways to Live Large on a Small Budget.
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