Important Money Saving Tip

Posted on July 11, 2012 by

I read an article recently titled “The Most Important Money Saving Tip.” The tip provided in the article was to “cut monthly expenses by thinking long-term.” After sharing this article with others, I was contacted and asked to provide another important money-saving tip.

I immediately knew another important, but related, money-saving tip: You must have a GOAL! As Zig Ziglar said , “If you aim at nothing, you will hit it every time.”

Each day we are faced with many immediate goals. These come in many forms including hunger, tiredness, money, and health.

  • To satisfy the goal of not being hungry, you eat.
  • To satisfy the goal of not being tired, you get sleep
  • To satisfy the goal of getting paid, you go to work.
  • To satisfy the goal of being healthy, you eat healthy and exercise.

Most of these goals are decided for you without you taking any action. However, the further we are removed from survival, the more goals we must develop on our own. 

What vs. Why

When it comes to finances, too often we know what to do, when what is really needed is a motivating reason for why to do it. Knowing what to do is not enough – you need a goal. A goal will be there to remind you why you are choosing to spend less than you earn. Your goal may be to retire, buy a car, buy a home, or to increase your S.A.F.E.  Regardless of what your goal is, you must have a goal so you have a reason not to buy the iWhatever, the cruise “everyone” is going on, or that “trip of a lifetime.”

Your Decision

You will either choose to make a goal or not. If you choose a goal, you will either reach it or not. Life is full of choices that will result in either a desired goal or an undesired goal – either way your choices will determine if you reach your goal. Yes, there will be obstacles in your path, but how you respond to those obstacles will determine whether you reach you goal or not.

Remember, “… we will also be truly effective only when we begin with the end in mind.” ~Stephen R. Covey

What is your decision? What is you financial goal?

 

Photo by Flickr User: jaycoxfilm
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Top 3 Personal Finance Articles

Posted on July 6, 2012 by

Here are the top 3 personal finance articles from the past week, as selected by your clicks on these articles.

  1. $234,900 To Raise A Child?  by Trey (me) at One Solution For Me
    • As the father of a 10 month old daughter & with baby #2 expected to arrive this February, a recent article headline about the cost to raise a child caught my attention.
  2. The Single Most Important Money Saving Tip  by PT Money
    • Yet for all the great tips and tricks I discover, there is still a single personal finance strategy that I apply to nearly every decision that I make: …
  3. Survival Techniques for the Barely Insured  by Fox Business
    • If you’re anything like me, you’re barely insured. I don’t work for a company that offers benefits and so I’ve had to shop for individual insurance. Setting aside what a headache that was, I’ve ended up with catastrophic insurance.

Is there an article you liked this week that didn’t make the list? Add your favorite below.

Have a great weekend!

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$234,900 To Raise A Child?

Posted on July 4, 2012 by

As the father of a 10 month old daughter & with baby #2 expected to arrive this February, a recent article headline about the cost to raise a child caught my attention.

The article was a summary of a report by the U.S. Department of Agriculture, Center for Nutrition Policy and Promotion, Expenditures on Children by Families – 2011. The report stated that a middle-income family ($59K – $103K) raising a child through age 17 would spend $234,900!

WHAT? Over a quarter of a million dollars  before college!

Having a child (soon to be children), numerous nieces and nephews, and friends with children – I wanted to know the details behind this amount. Being a details type of person, I went to the actual 30+ page report to see the assumptions.

What I learned reading over the report is that the report was divided into six categories. The categories, percent of total, and dollar amounts are:

  • Housing – 30% = $70,560
  • Food – 16% = $37,620
  • Transportation – 14% = $33,900
  • Clothing – 6% = 13,500
  • Healthcare – 8% = $18,990
  • Childcare & Education – 18% = $41,100
  • Miscellaneous – 8% = $19,230

Details

In the details of the report it clarifies that the following costs are specifically excluded from the above amounts: any college costs, any contributions by people outside the household, and any government assistance.  I’m glad they clarified that because I was sure those had to be in there.

My Take

Since I am a new parent, I don’t have any real evidence to disagree with the report – but I still disagree in some areas. I will give you my perspective on the six areas.

Housing – Disagree. When my wife and I were single, we each were renting a three bedroom apartment. When we got married, we moved into a three bedroom house. For us, our housing has not changed and was not influenced by children and it will not be until we have more than four or five children. So for my calculations I will not associate the $70,560 with raising a child.

Food – Undecided. By dividing the total, $37,260 by 18 years and again by 12 months – I get approximately $174 per month as the average cost to feed my daughter. I do know that since my daughter has been almost exclusively breast-fed for her first year that we have saved about $2,100 alone in her first year of food expenses. I don’t expect that we will come close to food costs of $174 per month for her for quite a few years.

Transportation - Disagree. Using the method previously described the report calculated the monthly transportation cost of $157. Since my wife came into the marriage with a paid for car and would have a vehicle regardless of if we had a child or not – there is no cost to associate with raising a child. Additionally I traded-down out of my large SUV into a used vehicle before we were married and did so before a child came along – nothing to add here.

Clothing - Agree. This comes out to an average of $63 per month or $750 per year. I think this is a little high but I can see how this may average out over time, especially as she grows rapidly.

Healthcare - Disagree. This comes out to about $88 a month or $1,055 per year. My healthcare is a family plan regardless of how many dependents I have and since I had my wife on my health insurance plan – there is no additional monthly cost. There are annual check-ups, physicals, etc… but those will likely add up to much less than $1,055 annually.

Childcare & Education - Disagree. This comes out to an average of $190 per month or $2,283 per year. In this case my wife has decided to stay at home so the childcare has been minimal the first year. We also plan to home school – so as time goes by our cost of school curriculum may drive this cost up closer to the average but I still think it will be lower than the reported amount.

Miscellaneous - Agree. This comes out to $89 per month or $1,068 per year. Since this category includes personal care, entertainment, and reading materials this category may actually be too low.

I plan to track as much of this as possible over the next few years and will provide updates periodically on our actual costs to raise a child.

What is your take on the report? Do the numbers accurately reflect your family’s costs?

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Top 3 Finance Articles This Week

Posted on June 29, 2012 by

Here are the top 3 personal finance articles from the past week, as selected by your clicks on these articles.

  1. Four Ways To Put Out A Financial Fire  by Trey (me) at One Solution For Me
    • When I was a firefighter, I experienced both real fires and financial fires. As a firefighter I learned how to use different aspects of a real fire to put it out. Through my experience , I found a way to apply the four parts of a real fire to put out your financial fire.
  2. MasterCard PayPass Credit Card Users Spend $600 More Per Month  by CardRatings.com
    • This article shows that consumers spent 30 percent more using contactless credit cards than with their traditional, magnetic stripe credit cards in a study commissioned by MasterCard Advisors. While I LOVE technology – don’t let the technology run your budget.
  3. The Case For Spending A Little More Sometimes  by N.Y. Times
    • Carl Richards is a certified financial planner in Park City, Utah, and is the director of investor education at BAM Advisor Services. His book, “The Behavior Gap,” was published this year. His sketches are archived here on the Bucks blog. A number of years ago, it was time to buy a new road bike. | I agree. I am still riding the same off-road bicycle I purchased 13 years ago!

Is there an article you liked this week that didn’t make the list? Add your favorite below.

Have a great weekend!

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Four Ways To Put Out A Financial Fire

Posted on June 27, 2012 by

When I was a firefighter , I experienced both real fires and financial fires. As a firefighter I learned how to use different aspects of a real fire to put it out. Through my experience , I found a way to apply the four parts of a real fire to put out your financial fire.

Parts of a Fire

For a fire to ignite, there are four primary parts that must be present. All fires need heat, fuel, oxygen, and a chain reaction for the fire to start and continue burning. If you remove any of these requirements – the fire will go out. Your finances are very similar. If you’re experiencing a financial fire there are four areas you need to focus on to put it out – income, spending, budget, and paying attention.

 Heat

The typical way to remove heat from a fire is to cool it with water. The size of the fire determines the amount of water needed to provide sufficient cooling. The amount of water is controlled by the size of the fire hose and the nozzle. I have fought fires that only needed a garden hose and I have also fought fires that required multiple large hoses. Similarly, the size of your financial fire may require you to increase your income. The increased income may come from a garage sale, a part-time job, a new job, or numerous other ways.

Fuel

The fuel of a fire is what is being consumed by the fire. The fuel for a fire is typically wood, cloth, paper, gasoline, oil, etc… The fuel for your financial fire is spending your money on furniture, clothing, books, eating out, etc … In order to bring your financial fire under control, you will need to limit spending and in some areas – completely stop spending  in order to remove the fuel from the fire.

Oxygen

When a fire is small enough you can often cover it up and let the fire consume all of the oxygen. An example would be putting the lid on a burning candle or covering a trash can fire with the lid. However, if the fire is bigger or more intense, more drastic measures may be used like using dynamite to use up all of the available oxygen to snuff out the fire. Since oxygen is everywhere and touches everything, this is where your budget can take control of your financial fire. Creating and using a budget will allow you to put out both the small and large fires. The most effective way to prevent a financial fire is to have a budget.

Chain Reaction

Even when all three parts of a fire are present – heat, fuel, and oxygen – a chain reaction must occur between these three components for a fire to ignite. Conversely, when you are paying attention to your income, spending, and budget – you have interrupted the main part of a financial fire – not paying attention. The most important part to implement is paying attention and it is required in order to identify the size and extent of your financial fire.

Just to be clear – if you have a real fire – call a professional firefighter.

If you have a financial fire – call a financial firefighter. Not sure if you have a financial fire? Call in a financial firefighter to assist you in your assessment at (850) 320-8739 for a free, 30 minute financial fire assessment, and we’ll figure out which part of the financial fire to target.

I would like to hear from you. Have you ever experienced a real fire or a financial fire?

 

Photo courtesy of Flickr user: purpleslog
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Top 3 Articles This Week

Posted on June 23, 2012 by

Here are the top 3 personal finance articles from the past week, as selected by your clicks on these articles.

  1. Will Your Fancy Degree Help You Solve This? by Dan at 48 Days
    • Roland S. Barth, lecturer of education at the Harvard College School of Education, noted recently, “It’s been estimated that fifty years ago high school students graduated knowing perhaps 75 percent of what they needed to know in the workplace. Today, the estimate is that graduates of our schools leave knowing perhaps 2 percent of what [...]
  2. 3 Signs You Are Burning Moneyby Trey (me) at One Solution For Me
    • During my time as an US Navy firefighter I learned different techniques to determine if there was a fire present before entering the room. Since most rooms on a ship are airtight and windowless, there was no easy way to see smoke or the fire.
  3. 14 Things You Should Always Buy Usedby Money Talks News
    • We recently shared a list of 20 things you should never buy used. Because it’s often true: You get what you pay for. When it comes to safety, hygiene, and warranties, there’s no substitute for buying some things new. But for the most part, you can save a lot of money without sacrificing quality by purchasing many things used.

Is there an article you liked this week that didn’t make the list? Add your favorite below.

Have a great weekend!

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3 Signs You Are Burning Money

Posted on June 20, 2012 by

During my time as an US Navy firefighter I learned different techniques to determine if there was a fire present before entering the room.

Since most rooms on a ship are airtight and windowless, there was no easy way to see smoke or the fire. So, I relied on indicators like bubbling paint on the wall or checking the door and walls for extreme heat. But, an even better way to detect a fire is by using a hand-held tool called the Navy Infrared Thermal Imager (NIFTI) that would show the temperature differences indicating a hot spot and likely a fire. Based on this additional information we would develop our plan to cool the hot spot or extinguish the fire.

With personal finances I have found there are three main ways to recognize if you are experiencing a financial fire. Since I am not able to check your finances with a financial NIFTI, I want to give you these three indicators so you can determine if you are experiencing a financial fire.

Smoke: Smoke is an indicator typically seen just before a fire starts. There is no sign of a fire yet, but everything is perfect for that first flame to ignite. - Do you have more month left at the end of your money? This is important because in order to survive the financial fire that WILL come, you need to have room in your finances to handle them. If you are spending all or more than you earn – you are on the road to having a financial fire.

Extreme Heat: Extreme heat that is felt on a door or wall is an indicator that the conditions are favorable for a fire. - Do you have any money in savings? If you have no savings, the money is likely being burned up somewhere. It sounds easy to say, “I’ll save when …”, but what actually happens is that you never end up saving because there is ALWAYS something else going on. It could be a birthday, Christmas, a car repair, a vacation, a sale, etc… The list can go on and on but what you must do is save. Your savings is what you will use for any emergencies and for planning large purchases like a vehicle of house.

Hot Spots: Focused pockets of heat can continue to grow until they become hot enough to ignite. - Do you know where every dollar you earn is going? Since the most powerful financial tool you have is your income, don’t let a financial hot spot destroy your finances. If you’re not monitoring where the income is going, you’re not using the most effective financial tool available - a budget. Use your financial NIFTI to look for smoke, extreme heat, and hot spots in your budget and extinguish them before they are out of control.

Every once in a while we stumble upon a situation that could have been prevented if only it had been recognized. Some problems can be prevented while others can only be managed. Take a look at your financial situation and determine if you neet to put out a hot spot or if you have a raging fire.

Not sure if you have some financial hot spots? Call in a financial firefighter to assist you in your assessment at (850) 320-8739 for a free, 30-minute financial fire assessment, and we’ll figure out what tools you need to extinguish your financial fires.

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Top 4 Articles This Week

Posted on June 15, 2012 by

Here are the top 4 personal finance articles from the past week, as selected by your clicks on these articles.

  1. The Best Time to Book Flights by Yahoo! Shine
    • Follow these general and seasonal rules to get the best deals on your family’s airfare. How to Get Deals Airline ticket prices continue to rise, but there are still deals out there. Knowing when to buy your tickets for spring break and the holiday season can help you save big.
  2. How Couples Sabotage Their Finances by Fox Business
    • With a wedding coming up, you’d think Jay Buerck would be obsessing about the usual details: Writing vows, choosing appetizers, or figuring out seating charts to accommodate challenging relatives. But what worries the 29-year-old St. Louis marketing professional isn’t any of those things: It’s money.
  3. 3 Ways To Get A Better Hotel Deal by CNN Money
    • The price of a hotel stay, up 5% in 2011, is forecast to rise at an even higher rate this year. To get the best hotel value, use one of these strategies.
  4. Steps To Shrink Your Grocery Bill by Personal Financial Success
    • After paying rent/mortgage, and a car note, grocery costs are likely the third largest expense for a family. Many families try to save on food costs by limiting their amount of eating out. While this is a good strategy, it is only a starting point.

Is there an article you liked this week that didn’t make the list? Add your favorite below.

Have a great weekend!

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Who's Your Firefighter

Posted on June 6, 2012 by

Sometimes I take for granted the benefits of living in a society where everyone has the potential to specialize their skills. For instance, I’m able to spend my time crunching numbers for people all day long because someone else spends their time crushing wheat to make my bread, growing and harvesting cotton to make my clothes, and manufacturing the supplies that other people built my home with. The diversity of specialization is part of what makes personal progress so attainable in the Western world.

But oftentimes, we fail to go to the experts when help is needed. Instead, we try focusing our attention on areas where we’re not as skilled as others, thereby robbing our true strengths of the attention they deserve. When we do this, not only do we become stressed and mentally exhausted, but we fail to thrive and succeed in our endeavors because we’re spread too thin.

During my time in the Navy, my primary role was that of a firefighter on a ship with a crew of 280 people. In the event of a fire, everyone knew that they would have some role in helping keep people safe and extinguishing the fire. However, less than 20 of the crew members were formally trained in using the proper tools to help everyone accomplish this. Does that sound scary? Actually, it’s the safest and most efficient way to run a ship. The other 260 crew members had their own special jobs and roles that made the ship’s operations flow smoothly. Because they knew that their job was not to specialize in firefighting, they would immediately look to and heed the advice of the firefighters in the event of an emergency, and be far more likely to avert disaster than if every crew member had tried to learn every job on the ship.

Far too often, I meet people who have amazing strengths and abilities in some unique areas, but are not as effective as they could be because they spend their most valuable time and energy trying to manage the areas they’re not good at. When it comes to personal finances, people who are not formally trained in putting out financial fires frequently make their problems worse, because they don’t know which financial resources and tools to use for the type of problem they have. Even a small issue that is just starting to give off a few sparks can become a huge conflagration if the wrong solution is applied.

But that doesn’t have to be your story. You have access to a wealth of professionals to help you excel in life by advising you in their areas of expertise, so that you can become the best at what you love to do. Don’t be fooled into believing you should be able to handle every issue of your personal finances alone. Far too many people make this mistake, and spend all their energy fighting fires when they should be building their future. Personal finances is what I do; it’s what I’m passionate about. If it’s not what you do, then give me a call. Together, we’ll make sure you can spend more of your life doing what you’re passionate about, instead of putting out the inevitable financial fires that life brings our way.

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Weekly Summary: Top 4 Finance Articles This Week

Posted on June 1, 2012 by

Here are the top 4 personal finance articles from the past week, as selected by your clicks on these articles.

  1. How to Host a Yard Sale by Get Rich Slowly
  2. How I’m Saving Over $20 a Week on Food by Trey @ One Solution For Me
  3. Outdated and Bad Financial Advice by PT Money
  4. Buying Cars The Millionaire Next Door Way! by Thomas J. Stanley

Is there an article you liked this week that didn’t make the list? Click more next week od add your favorite below.

Have a great weekend!

 

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