Conscious Cash

Are You Cash Conscious?

Money is essential. What is often overlooked in the world of finance is money consciousness.

Money consciousness is primary in having sound money sense. Which leads to more cents of course! (I could not resist.)

A cornerstone of financial health is understanding money – where yours goes, how much money you make and what the basic rules are around money. With today’s focus on the digital economy, we lose focus on where our cash goes. There was an “old school” mentality that was born out of the depression where households put money into envelopes marking each spending category for the upcoming week or month. Touching the money and organizing it in this way gave individuals the value of cash consciousness. They had to understand where each dollar went.

Reverting to the ways of almost a century ago is unnecessary. But also bypassing the process by giving over your financial control to someone else is problematic. This sounds like the easy way, even the right way if you listen to the advertisements or some “experts.”

1. Are You Giving Your Power Away?

Being consciously aware of what is going on with our money can raise our vibration and increase our funds. Being unconscious has the opposite effect.

When you give your power to a program or an app, you are not necessarily aware of where your money is going in the moment; Rather, you are doing the math and looking at the result of your spending. The number detail may be important but most important is connecting with a deeper understanding of your financial picture and your reasons for spending.

The YouTube commercial I hate is about subscriptions. Rocket money app wants you to sign up and it will tell you how many monthly subscriptions you are paying for. Sure, it is quick and easy once you enter all your bank accounts and credit card numbers. Essentially, you share all your financial data with a large company to reveal your monthly subscriptions. (Can you say a “Security Breach” waiting to happen?)

The greater cost is giving away your consciousness. Without money consciousness, you are without a guidepost for your dreams and money.

2. Create a Long-term Self-Sustaining Plan

Want an easier, free way for long-term success? No big company was involved. Here are the steps:

1. Read your statements.

Sit down for an hour and review your bank and credit card statements. Identify your monthly expenses and subscriptions that you are paying for as separate categories. Some are necessary like utilities. Other are optional like music and streaming video.

2. Manage those subscriptions.

Set another hour aside. Take one subscription at a time. Ask yourself: Do you need it? Do you use it? Does it have an annual option? Then, pay annually. You may save some money. Best of all, you retain some control each time the subscription comes due, whether you chose to renew or not. The email or text message will be a reminder that you have the subscription and a trigger to ask yourself if you still want it and can afford it.

3. Choose one mode of payment for all your subscriptions.

By lumping your monthly subscriptions together onto one credit card or one checking account, you will always know what you are paying monthly or annually for subscriptions. The monthly payments will be clearly noted on that account’s statements. Step it up a level by dedicating a separate checking account and depositing the necessary funds for each month through a payroll automatically. (Most companies allow up to five different accounts to deposit to.)

Taking these steps commits you to real time accounting. You know how much you are spending on monthly subscriptions. Your spending on monthly subscriptions will be obvious at one glance at a statement. Only simple math is needed.

When you want another subscription, your newly designated subscription account is the lone one you will use for those payments. If it is an impulse subscription, you will know pretty quickly if you can afford it as your paycheck will have to be redistributed to fund this added monthly expense. Knowing you will have to take this extra step may even slow you down as commit with your click to another mindless monthly subscription. By creating this system, you will be in a better position to make decisions and handle your money consciously.

Money is meant to be saved, spent, and enjoyed. Without consciousness, none of those actions are truly peaceful; Nor a reliable source of your ability to make sound rational, well positioned financial choices.

Make 2024 the year you reposition yourself.

Be Cash Conscious.

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What are Annuities?

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Question: “I just got an inheritance and a financial person suggested I purchase an annuity with $90,000. We were going to expand our home. I do want to be smart and do something wise for the long term with the money. What is an annuity? Is it a good investment?”

Christine’s Answer:

Good for you for wanting to learn about money.  

First, the annuity answer. An annuity is an insurance contract. There are many types and forms from fixed annuities to variable annuities which have an investment component. They are backed up the insurance company that sells them. If this financial person only suggested an annuity, then they may only sell annuities. Annuity is a product with a large commission for the sellers typically. If an investment person does not offer you more options, they may not be working in your best interests. 

Expanding your home sounds like an option, but do you have a financial plan? Use that inheritance wisely by consulting an objective financial professional first. You can meet with them on an hourly basis and they can evaluate if you have a safety account, how to manage any debt you may have and plan for your future. They can also further explain annuities and other options to best serve you. To contact one that does not sell products reach out to the Garrett Planning Network.

Once you are more educated you can decide your next steps.  

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How Can I Stop Spending Money?

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How Can I Stop Spending Money?

My number one tip is to create a spending plan. Choose ahead of time how you will spend your monthly income or other incoming money. This is a better way to think about your money than a budget, which I find is a limiting mindset. 

Do not shop in person or online or social media binge when feeling emotionally upset. We spend more when we feel bad. We also are less discriminating and more apt to make impulsive purchases thinking they will improve our life. Survey: 48% Of Social Media Users Have Impulsively Purchased A Product Seen On Social Media | Bankrate

If you are shopping: 

When buying on-line, put what you want in the shopping cart, but do not buy it. Or in a store, ask them to hold it for you. Sleep on it. After 24 hours, if you still decide you need it or if it is a want, you can easily afford it, then go ahead, and buy it. If not add it to a shopping tab for future spending when you get that raise, bonus or financial gift.  

Unlink your credit and debit cards to your favorite spending sites. Yes, you can do this. But you may have to delete it from your laptop and phone too. One click is too easy for all of us. (Yes, me too.) 

Do not be seduced by the latest best product on YouTube, Instagram, or any social media. These are advertisements. Realize that the sellers are spending big money to tout their product. They are making their money back by selling something to you. Some of what they sell is image and an improved lifestyle. An improved life is an inside job and taking care of your finances is one way to make a better life for yourself. 

Cash Is A Treat, Don’t Let It Trick You

Money conjures up all sorts of preconceived notions for people. The subject can be emotionally loaded and money is one of the least talked about subjects in our society. Yet, money is simply how we barter and exchange our energy. In our fast moving society, we often move at such speed we make sloppy decisions.  

To make your life easier and be more attentive to your money, I offer seven tips, or “treats”, for you to not get tricked in the coming weeks and months:

1. Emotions should not rule. 

Money is tangible and important to our lives. With that in mind, we need to be sure our emotions are not distracting us from money. Attitudes about money influence behavior and can take the form of avoidance, impulse spending, over saving and more. Check in with your emotions but do not let them rule decisions. 

2. Use planning and understanding for your finances.

People tend to do the same thing they always do, including when it comes to money. If you do not review your spending or get quotes for services, even little amounts add up quickly. When you do, you may be surprised at what you spend. The Seemingly Small Money-Saving Habits That Add Up Over Time

3. Manage your money; Don’t let it manage you.

Study after study demonstrate that wealthy people are organized around their money. They have a plan for savings, investing and spending. Reevaluating their system helps them move forward in their financial life. The time invested up front to create the system pays back dividends over a lifetime. This includes how they manage money the “old-fashioned” way. Paper checks are dead. Cash is dying. Who still uses them? - The Washington Post 

Wealthier people and older people use the majority of paper checks. Are they wealthy because they are tracking their money more carefully? Consider trying it for yourself to find out. Autopay may not be the best answer to paying bills. Autopay Is Making Us Worse at Managing Credit-Card Bills - WSJ

4. Convenience is not always the financially smart approach.

Credit cards are great. Debit cards support our spending while not getting into debt. However, easy, may not be the best solution for all spending.  Discounts are often offered for those who pay cash because business have to pay fees on each and every transaction no matter how small. Want a Discount? Pay in Cash - WSJ These fees add up quickly especially for the Mom & Pop stores who operate on tight margins. Being a good customer may mean more than frequenting a store. Community minded may get you a discount and benefit small business owners. Carry a bit of cash on you. Why many business owners would love it if you stopped using your credit card - NPR

5. Saving for the long-term and short-term are different.

Your retirement accounts need to be considered as long-term money and not to offset bills, debts and inflation now. Instead, build up savings to have when financial distress comes your way. Keep your retirement accounts where they are to avoid extra income taxes, penalties, and a delayed retirement.

Americans are pulling money out of their 401(k) plans at an alarming rate - CNN

6. Create a plan, not a rationalization for your money and expenses. 

This seems like #1 but using your intellect to justify spending is not financial planning. The flaw is that a rationalization is not based on sound financial principles and your overall situation. Your thinking alone does not make a financial decision the sound money approach. If It’s Under $5 It’s Free: The Logic of ‘Girl Math’ and ‘Boy Math’ - WSJ

7. Experience rules. 

No matter our age or profession, personal experience is the greatest teacher. Be gentle with yourself when you make a mistake. That is part of life. Repeating it puts you in the danger zone financially.

I teach about consciousness around money. That will get you the furthest in life and wealth. Conscious behavior often means we must slow down, take our time when making decisions and align our priorities with our values. Then, we can make the best choices for us over the long-term and short-term.

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Economic Concerns for Your Attention

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Why am I concerned about the economy?  This country has a debt problem from government to individuals.  If we do not slow down and pay attention to how and where we spend money, the whole system could fall apart. 

As I always talk about financial self-care, I wanted to reiterate why it matters today. Financial change is happening everywhere, not just with the banks.  You can only control your part of the world but first learn what is happening and why that is more important than ever.

Here is what I am paying attention to with trepidation:

1.  Car loans are rampant with over 30% of people financing a car

People cannot afford transportation costs.  Given some may be buying more car than they can afford, but this is ridiculous to have so much debt out there for a depreciating asset. In addition, a greater number of people are defaulting on their car loans.

2. Credit card balances are high 

On average people have over $5,000 in credit card debt, worse, defaults are on the rise.

3. Savings are depleted

Remember all we were saving during lockdown?  Those accounts are dwindling.

4. Commercial office buildings mortgages delinquencies rise

With work from home movement and other changes, the rate is around 5% this year.

5. Traditional measures  

Employment looks strong, and inflation is stable by many reports; These positive measures are critical to a budding economy.  I believe they cannot stand alone without other financial factors which matter to each of us individually.

6. Rising interest rates  

The interest rate changes are affecting businesses and consumers on the loan side.  Sure, savers gain but see my list, # 3 above. 

7. Debt ceiling compromise was a temporary fix  

This issue will come to the forefront after the next election, or sooner.  Right now, the astronomical amount is easy to understand by calculating per US citizen is close to $7,100 each. 

8. War in Ukraine  

A country I am humbled to admit I couldn’t have found on the world map a decade ago is now in splinters and affecting global stability and peace.

Something is going to give.  Perhaps in the long run all will be well.  In the meantime, being prepared to ride out the fiscal downside is crucial.

I am not chicken little saying “The Sky is Falling” rather …

Instead, I’m encouraging living by the Girl Scout model of “Be Prepared.”

You have heard it before from me many times. This attitude is a product of my Girl Scout years and career. Stay financially sound with these five ways to be prepared for the unforeseen whether flooding, fires or economic downturns:

Five Steps to Maintain Your Prosperity Preparation:

1.     Create a safety savings.

2.     Live on less than you make.

3.     Check and cross check your insurance coverage.

4.     Be Prepared for downsides financially and with an estate plan.

5.     Enjoy the upside by living in the simple pleasures and appreciating what you have today.

 

Whatever you do, do not take money out of your long-term goal, like retirement, to fund your life now.  That will backfire in the long run, leaving you with less to live on in your older years.

Balance is key.

When you have the downside contingencies taken care of, you will be prepared for the worst.  Then, you truly will be comfortable appreciating and savoring the best.

Looking to read more about what the economy is doing? Here are some resources:

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Travelling Close

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Growing up, our house had regular visitors from overseas. My Irish relatives would typically descend in the summer and as a result, I would be on hand to be part of the entertainment. Truly, my parents were planning and executing the day trips. Typically my mother would take the actual trip and do the driving. As the youngest, I was along for each ride for many, many years. From Boston, Plymouth Rock was not far. Bunker Hill Monument and The Constitution were only a few miles away, as was the seashore. So before the age of twelve, I had climbed over “The Rock,” sat on the cannons and climbed the stairs of these historic monuments many times. In junior high, I was shocked at how few of my classmates had even been to one of these local sites I had frequented.

This summer, I decided on rather than one long vacation, a series of Fridays off would give me freedom for long weekends or day trips on a less crowded weekday. So far, this option has created many adventures and opportunities to see novel places and even act as a tourist in Vermont.

Let me be clear – this does not feel like the recent “stay vacation” movement of past years, where a week was spent at home. Or the overall goal was to save money. Rather, I have time for long weekends that are not too far away. Or daytrips where I can be the “visiting” tourist in my own backyard. None of this involves undue planning or plane flights which takes more energy. Long drives leave time for exploration and side roads. No matter that there seems to be construction everywhere in Vermont. None of these excursions are time sensitive.

The result? August is here and I have been to several unfamiliar places and had new experiences. In Vermont, I went to a couple of local festivals from Beer festival to Street festival to a few Vermont state parks. I visited places that had been long remodeled and well touted since I was there a decade ago. I acted like a tourist at the King Arthur Store and Simon Pierce outlet. And I was home in my bed that night. Relaxing and fun.

There was energy to head to the Eastern Townships of Canada – a whole new area I had never experienced. Lakes, scenery and a foreign country all rolled into one. There was a day of photography with friends, a day boating on the lake with a generous friend with a boat and an afternoon ferry ride across the lake to New York to cool off one afternoon.

One weekend, my husband and I went away to Ontario. We had the pleasure of staying with friends a night who introduced us to their main local summer event – The Scottish Highland Games. The music was fabulous! (Thanks Louise and Jamie!) Then, we headed to the city of Ottawa for a night. We caught a street festival of performers and an amazing light show on the Parliament Building. Each night we had fireworks too. A bonus: These unique city events were all free! We came home refreshed after a total change of scenery for a weekend.

Attitude is what has made these days fabulous. And of course, the weather has helped. But the perspective of doing something different and having a day or two of open time meant each trip was rejuvenating.

We all get so caught up in doing activities that we have enjoyed for years that even vacations happen on autopilot. A bit of variety from our way of doing things may just be the ticket we want and need to finish off this summer and move into the cooler months of the fall.

I suggest you try an experience that is different this month. Worried about the cost? Remember the event does not have to be expensive. Festivals are often free. Renting a kayak or bicycle for an hour or two costs less than a dinner out.

And best of all, according to research, experiences mean more to us than buying things. So skip the new purse and take yourself and the crew on a beach day!

No time for more, as we are off to the Addison County Fair!

Enjoy Summer!

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Making the Grade on Your Financial Life

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Congratulations you are on your way to graduating!

Senior Spring- Finishing up Final Exams. Writing your final paper. Planning graduation and the parties… An exciting time filled with fun and promise.

You may be pondering what is next? First, I have the perfect, albeit practical graduation gift for you. My gift to you is some pointers for getting you off on the right foot financially. Like your study habits that got you through college – better to start with good money habits with your first paycheck.

Fun Fact: Did you know that John Rockefeller started giving to charity with his first paycheck?

You can set up a system to last a lifetime. Apply your willingness to learn and try new experiences with the information below.

Listen, I know that in college you bought Ramen noodles by the case load and traveled in packs to places that offered discounts. You are excited about the option of fine dining and doing some traveling. However, do not lose sight of those thrifty skills you acquired in college. More than one recent graduate has been led astray thinking they were making the big bucks and forgetting about the financial basics before making that financial splurge. Start with a monthly overview of what you need to spend and where, rather than just collect a paycheck and spending without thinking.

First, think of your financial life in three parts: present, past, and future. All are important components of your new life. Each has several pieces that need to be addressed to adequately address your financial life.

Think Present

Safety Account

While in college, money came in and went out. All that you really needed was a checking account. You may have had a savings account attached to your checking account where you stored money you did not need immediately. Now, you also want a safety savings account for building a cash reserve. This account will grow slowly as you make contributions regularly either through direct deposit of your paycheck or a deposit in person or on-line. Think of this account as the money you fall back on when the unexpected happens and you need cash to maintain your life: a car accident or loss of job.

Not having enough cash to go out with the gang on Friday night is not cause for touching a safety account.

  • Have a local checking and attached savings account.

  • Open and fund a second savings account without ATM access for emergencies.

Renter’s Insurance

You get home after a long day at work; your laptop is not where you put it. For that matter, your new digital camera is gone. You call the police. Will you ever get your electronics back? Questionable. Who will pay for your new ones? You, unless you have renter’s insurance.

Renter’s insurance pays for your possessions if they are stolen or destroyed by fire. The policy costs just over a hundred dollars a year. You have a flash drive and a portable hard drive; they are one type of insurance, why would you not have renter’s insurance?

If you rent an apartment:

  • Purchase renter’s insurance – available through your local insurance agent who sells car insurance. Or ask your landlord the insurance professional they recommend.

  • After you pay a deductible of $250, the insurance company will reimburse you for anything stolen or damaged due to theft or fire above that amount.

  • The policy is available for pennies a day. Get it!

Health Insurance

You finish college and it is time to explore health insurance. Many young adults have coverage until they turn 26, others do not. If you are not covered by their health insurance. What do you do?

  • Learn the lingo about on the health insurance front: deductibles, pre-exsisting conditions, and premiums.

  • Consider a job with health benefits.

  • Check out your state’s health plan. Many states have coverage for the under or unemployed at discounted rates.

  • Consider Catastrophe Medical Insurance for in-between coverage:

    • Designed to cover a major accident or illness.

    • Temporary –usually up to three years of coverage available

    • Policies are inexpensive- often as low as $60 a month.

    • Deductibles are high- $25,000.

    • Minimum health insurance you need while in transition.

Think Past

Student Loans

Unless you are walking off the stage and accepting a huge signing bonus that covers your student loans, then you need to start looking at what you will be paying, what you owe, and how to make it happen. If you have no student loans, you can read on to the next section.

Your federal student loan payments may not require monthly payments until six months after graduation. If you are employed, do not wait six months to start looking at that bill. Start right away by writing a check for that amount. For the first six months, put the check in your safety account. This will help build up the safety account. Most importantly, you will not rise to a level of spending and lifestyle only to have to change it six months down the road.

Make the list of important student loan information and keep your debt information organized.


Other Loans

Line up all your paperwork on your loans. If some are in your parents’ name and you are required to pay, get that information too. Write a list of each loan, the full amount you owe, the interest rate, monthly payment and the term or time you will be paying. Having this on one page or one spreadsheet will help guide you to an understanding of your financial responsibilities. (See above)

If you are traveling, planning on graduate school or still unclear on your plans, talk to the loan company, or find out the details on the web to determine if you can defer payments, how to do it, and how long it can last. Federal loans tend to allow you to defer. Private loans often do not, so you may need to find a temporary job right away to pay the monthly loan.

Credit Cards

Be careful - there is only one entity that is getting a deal on these cards. That is the credit card company. Used wisely, these are a nice tool to have. However, no one needs more than two credit cards. And consider in our society of immediate gratification, credit cards are overused and often lead to abuse.

Get credit savvy:

  • Know what interest rate you are paying on your credit cards. You can find this in your statement.

  • Protect yourself by writing a check immediately after using the card. Taking the money out of your checkbook creates no surprises when the bill comes.

  • If you are already swimming in credit card debt, stop using your card. Use the steps from the student loan section above to lay out what you owe and when.

  • Create a plan to pay off the credit card debt you now have.

Credit Score

On a college campus, you often cannot get away with anything. There are always people around. Professors know each other and you have more dorm mates than close friends. You know news travels fast. Your credit score works the same way, someone is always watching.

Good financial actions get reported to credit reporting agencies:

  • Timely payments of student loans, credit card debt and car loans

  • Your credit history for all loans paid in the past are recorded.

Financial actions get reported and negatively affect your credit score:

  • Not paying the overdraft fees on your checking account

  • Late payments to your credit card, student loans or car loans

Financial mismanagement can work against you and gets documented on your credit report. Keep your credit score solid by being attentive to your financial life. A credit score will affect your ability to buy a house, get capital to start a business and even some offers of employment. Often, landlords use credit reports when considering you as a tenant.

You need never pay for your credit information. Your credit score is based on your credit reports. So, you need only look at your credit reports – I recommend annually. They are free for you to see and confirm they are correct. Learn more at: www.annualcreditreport.com.

Think Future:

Job Choice

Deciding on a job is a critical time. Do not forget to ask what employee benefits are provided as part of the job. The better benefit package a company offers may not make their salary look competitive. When comparing opportunities, review all aspects of what the company is offering you.

Then when you start, sign up for the benefits and take advantage of them. The benefits an employer may offer you include:

  • Health Insurance

  • Disability Insurance

  • Life Insurance

  • Retirement Investment Options

Disability Insurance

This pays you if you are off the job due to injury or illness. Some companies provide it as part of their benefit package. Some require you to pay a minimum each month to get coverage. This insurance pays you a part of your monthly salary if you are out of work due to disability.

Although this type of insurance does not seem to fit a healthy twenty-year-old, the majority of disability claims are from 25–36-year-olds. Think last time you were mountain biking, skiing through the trees, or diving. If those close calls had happened, then being out of work would cost you in more ways than one. Younger people tend to be more active, so need disability insurance too.

Life Insurance

This insurance pays an amount to someone you designate upon your death. Think about who you would benefit most from this added cash. Your best friend may come to mind. However, review your student loans. Federal student loan requirements typically stop at your death. If your parents co-signed any of them, they will be responsible for paying for the loans even after you die. Choose your beneficiary wisely.

Retirement Plan

Start funding your retirement right away. Even though you are young, this one good habit can pay off for a lifetime.

  • Saves income taxes.

  • Builds investments for your future.

  • Provides hands-on learning about investments.

  • Some companies provide a match in dollars if you contribute.

Roommates

One young client of mine could not afford a studio in Boston and still pay student loans and have discretionary money. I discussed the possibilities of roommates so she could keep her financial commitments. Sharing expenses stretches your paycheck and makes financial sense. Instead, she took a second job on weekends so she could live alone. Remember:

  • You always have financial options.

  • Take the one that works for you.

On Graduation Day, enjoy knowing you are prepared to take on your financial world. The cash that makes its way into your graduation cards can be used in multiple ways to jump start your financial life. You can start your safety account, fund your apartment’s security deposit, or pay off some debt, along with having some extra fun.

You are moving into a new world filled with fun, challenges, and opportunities. This does not carry a grade. There will be no final exams or papers. The outcome does affect your life. The financial decisions you make as you enter the post college world can make your road easier in the years ahead or trip you up a bit. Keep these financial tips handy to get started and keep your financial stash growing.

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Financial TLC

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Financial TLC

February is the month we associate with love, caring and cuddling, because of Valentine’s Day. Yet, Love is always in fashion. Love of yourself, your partner, your family and your friends reign throughout the year. 

This month I want you to give yourself some Tender Loving Care. Whether you are coupled, single or searching, taking care of yourself is critical. I want to encourage Financial TLC. In the midst of the life, we often forget to take care of the details. True TLC is the key to a solid financial life.

What is financial TLC?

Transparency

Be honest about money: with yourself, with each other, and with loved ones. Write down and review where your financial life stands: income, debt, investments, bills. Looking at the list in black and white often gives you a reality check that no other system can. This is critical to share with yourself first and foremost. You need to know where you stand and what your commitments are.

Your partner needs to know as relationships are tied together. In marriage, you are bound legally. Even if you are not married you may have shared commitments like rent, pets, and family. Knowing about the other commitments your partner has makes assessing your situation a lot clearer.

Link the Details Together

Know what the accounts are and where to find them for each other. And be sure the bills are in both names.

If you are single, you may feel you are only responsible to yourself so there is nothing else for you to do. Your details will matter to your loved one if you were critically ill or die suddenly. They would have to pull the pieces together. So have a file with the details that they would have to know to handle your financial life. Tuck away the details. You do not have to share everything but let someone who loves you know where they are.

Conversation - Caring Conversation.  

There is embarrassment, there is past money flaws, there are emotions involved around money. We all have them. The secret is not to let them rule your life. The best way to do this is to share them in a way that works for you. This may be journaling, therapy or a good heart to heart with a friend. If you are part of a couple, talking to your partner is not optional, it is a necessity. Financial intimacy is as critical as any other part of your relationship. 

The bottom line is love relationships are impacted by money. TLC is investing some time in your money relationship. TLC and honesty with yourself and others will demonstrate love on many levels.

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The Benefits of Simplifying

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Simplify, Simplify, Simplify but Not too Much

Tis the gift to be simple, 'tis the gift to be free,
Tis the gift to come down where I ought to be;
And when we find ourselves in the place just right.
— Shaker Folk song by Joseph Brackett

Money is good for so many aspects of our lives. Yet, the management of our financial lives can distract us from happiness. When we are overwhelmed with statements, options and misinformation, we may make impulse decisions or ignore our money all together. Both can land us in more turmoil.

Focus, time, attention and energy are required to manage money whether you have very little or are gifted with large accounts. You need an overall strategy to prevent your constantly thinking of your financial concerns and the market.

Your cash and investments accounts tell a story; the story of you how you treat your money. Create a cash management plan that matches your expenses to income and demonstrates your self-care. No matter how much or how little money you have coming in, taking steps to gain clarity around your money is critical. Money is only as valuable as what we spend it on. We chose what to spend it on, but we first need to know what we have.

As with anything you organize, the initial set-up demands time and a plan to establish. After the system is in place, there is less time and energy involved to maintain it.

First, start with a cash management plan. 

This is a tool to understand where your money is being spent. This will also help you determine how many money accounts to actually have. There are three accounts everyone needs: a savings, checking and separate safety savings account. Beyond that, the more moving pieces in your life, the more bank accounts you will need.

A homeowner may want an account to save for real estate taxes, capital improvements and maintenance. A couple with young children may want a separate childcare account so they always have the cash to make a daycare payment. Keeping your funds separate this way prevents confusion and ensures the money is there when you need it. Plus, though at first glance more accounts sound complicated, there is less need for calculations as each financial need has a place.

Consolidate Some of Your Investments

As far as investments, diversity is a great approach to investing. However, if you have several investment advisors or retirement accounts from previous employers, you could be working against yourself. Variety does not lead to diversity. Rather, the complexity may lead to a lack of your comprehension of what you are investing in, what your options are and how many accounts you do have.

Create a better grasp on your investments by gathering up your investment statements and decide if you need to merge all your 40lks, 403bs and/or IRAs. Then, take the steps to make that happen. This month. Such an administrative step is easy to put off, so give yourself a deadline and envision the fewer emails and paper you will collect with fewer accounts. Most of all, with less to manage, you will be sure to have time to understand and choose your investments wisely in 2023.

If you have different investment advisors, understand what they do for you and how they work. Find out what they charge, specialize in and how they can help you even more. Do some research and perhaps merge these accounts as well. First, learn more about your Investment Advisor.

Finally, Take Time to Relax

After making progress, you will have more time. Spend time on your passion. Enjoy your family. Go for a walk in the woods. Or treat yourself to some music. Here is an instrumental version of Tis a Gift to Be Simple. (The words are provided if you choose to sing along.)

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The Weave of Life

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Candle

Attitudes and experiences around money impact mental, physical and spiritual life. Money is a part of living, yet money is not often integrated into our lives, and not talked about in a holistic way, if at all.

Financial stress accounts for missed work and other ailments. For example, we all know folks that throw out their backs when worried about money. Or people who are so preoccupied by money it becomes the focus of their career and life to the detriment of their whole being. Or the other extreme, individuals so dependent and present in the spiritual world that they do not take care of themselves in their human capacity. All in some way forget that money is a tool that must be used properly in the process of finding a fulfilling balanced life.

There are those who flow through life happy and fulfilled but money is neither the issue nor the problem. Like Annette, a woman who runs her own gardening business and makes a modest living. She is always grounded and happy. When asked the secret of her content, she says, "I love where I live and do the work in this world that comes easiest and brings me joy."

This holiday season weave some solid changes into your life by starting a new system for your holistic health. If you want a better financial life:

First, is making the decision to improve your finances.

Second, have gratitude for where you are at and what you learned so far.

Three, enact a plan to improve one way of handling your finances.

Initially, the above will take time. Consider it investing your time for a better long-term financial picture. When your finances are sick they need extra time devoted to them. Once they get healthier, they need less time devoted to them. A consistent plan makes finances healthier.

Think of it as your health. If you are sick, it takes days in bed to recover. Once you are better there is still a slow upward curve as you struggle to full-fledged wellness (or back to normal.) This struggle and the timeline are in direct relation to how sick you are. There may even be a relapse.

The wellness part applies as well. If you do not take regular care of your health with the basics: sleeping, eating healthy food and exercising. Then, of course, you are not going to stay healthy. For the most part you maintain the semblance of order in your health life with the proper food, vitamins, stress relief and exercise. In order to maintain your financial health, you must pay your bills, have an income, review your expenses and maintain your checkbook with a regular routine.

The law of physics applies in finances: For every action there is a reaction.

Your past actions made your financial life what it is today. If you do not like it, you can change it with action.

Take one of the steps below today to move toward a healthier life:

  • Check your credit report.

  • List all your debt with the monthly payments and interest rates.

  • List all your assets from cash, to home, to investments

  • Start a daily gratitude list

Once you get in the habit of reviewing your finances, you will find a system for you. Then, like a client said of her handwritten monthly list of the assets and debts and debts, “It is so satisfying and simple.”

Personal finance does not have to be complex. See the list above and my blog for ideas. Try a new approach and gain some health in the process.

With gratitude for your reading each month. I am off to pay a bill. What about you?

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Feeling the Cash Flow Pinch at the Pump?

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The price of gas is unforgettable. Here on the East Coast it is $4.99 and on the West Coast even higher. Inflation is ripping through every grocery aisle. Not to mention almost everything else we need has increased in cost and hit our wallets with a crash. What is one to do?

Though it is not officially mid-year, at the end of the month it will be. This is the time to revisit your spending goals and plans for the year with the rising costs of basics in mind. For example, if you are saving for the holidays monthly, you may want to save a few dollars less each month to cover the increasing costs you did not anticipate in January. If you are planning a vacation, save some money by staying fewer nights at the resort or combining time closer to home with some road trips.

While you are looking over your spending plan for the year, remember that the incidentals add up. Those expenses that come annually or even periodically that seem hard to predict but are ever present in everyone’s life. Consider setting some money aside for the inevitable now so that you won’t be surprised by:

• Annual Furnace Cleaning

• New/Used Sporting Equipment purchases

• Medical Bills and deductibles

• Repairs to lawn mowers, appliances and vehicles.

Festive events seem to come all at once, straining the best of financial plans. Start looking at the year ahead so that friends and family special occasions will not be a surprise. These days even $50 a month on a special dinner or gift can through a wrench in your spending. Don’t let a lack of cash flow dampen the fun in your life.

Previous to 2020, inflation had not been over 3% since 2007. Easy for us to get complacent and forget that the decade of the Seventies had the longest period of sustained inflation. US Inflation Rate by Year: 1929-2023 (thebalance.com)

If nothing else, this six month change in 2022 has taught us to always leave a bit of wiggle room in a spending plan for future years. Inflation does happen. Lest us not forget to start to plan for it as a fact of our financial life.

Thrift & Ben Franklin

As a gift, I was given a 1960 copy of Poor Richard’s Almanac sayings. (Thanks Trish!) You may recall that Ben Franklin as the publisher of Poor Richards Almanack.  He was brilliant and his words still apply today.In his chapter titled, “How to Get Riches” is one of my favorite lines:

“The Art of getting Riches consists very much in Thrift.” (p.19)

This I find so much to be true.  From my experience of working with high-end clients over the past few decades, each and every one of them has created their priorities.  They do not spend frivolously or randomly.  They may have a lovely home.  From there they chose a few areas that are important to them.  So, whether it be travel, clothes, education, where their money goes, they are content rather than looking to spend more. 

Spending just for the sake of spending is not in their repertoire.  They are thoughtful when making decisions about their money.  I find that these conscious souls know how to share with others while taking care of themselves.  Self-care never means going “overboard” as some people insist with their money.

In contrast, some of the folks striving to get ahead do not prioritize in the same way. Here is what I hear from the “average” person:

·       I just got a raise; I might as well splurge on dinner.

·       As I am going on the trip anyway, I might as well spend the money.

·       Another hundred dollars won’t matter.

These sentiments are not in line with “The Art of Riches consists very much in Thrift.”

Consider where you are thrifty and where you are making conscious spending decisions.  Then, from that point of clarity, build on good decision making for the rest of your financial life.  Ben Franklin would be very proud of you as build riches through Thrift.

To stay on your path to thrift, sign up for the MoneyPeace Monthly newsletter:

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It is happening!

We are emerging from the pandemic lockdown mentality. Though variants and vaccine stragglers abound, there is the socializing side that so many are struggling to get used to again. Then, there is the piece that is gaining some traction but not enough attention.

Emerging financially. Our spending habits changed with covid. First there were none – with eating out dropping majorly and credit card use plummeting. Then, we began to adjust to home and with it the cost of monthly subscriptions to keep us entertained, in shape or stretching personal growth. The next step of the financial pandemic was home improvements over looked or not necessary until we spent so much time at home. Finally, the housing plunge which is still going on. The demand for a home in the suburbs or country were powerful.

The need for more sweats, less makeup and creative recipes changed us and our spending habits. Now, we are changing again. I have events to go to! I need clothes! I get to go somewhere without a mask. There is a global demand for lipstick. Dinner out is an option. A respite from takeout is available. Those recipes may collect dust.

How do we manage this radical change to our spending habits without damaging the savings we have built? A bit of planning always helps. And before that creating your own money philosophy so you do not get washed away in the fun of shopping, traveling and upgrading your home without thought.

How do you do it?

1 - Create your values list.

What three things are important to you? Health, Family, Adventure, Spirituality

Do it with your partner if you have one. But only after you have each done it yourself.

2 - Remind Yourself!

Once you know your priorities it is important to remind yourself. Maybe a sticky note on the back of your credit card. Or on your computer so before you hit that one click purchase option you can realize how important it really is to you. Or is it an impulse purchase.

3 - Look at Your Income!

Then, take the practical piece and look at your income. Do you know where it is going? For example, households on average have 22 subscription services. Your priorities are changing as we reemerge. So maybe all of those are not critical to your well-being. More than a few may not match your values.

When we spend our money to match our values, we feel better – more peaceful about our spending. Knowing what is really not as important, makes managing money so much easier.

So with those major values in mind, consider what you have for disposal money after the basics of living – food as in groceries, not eating out, housing monthly costs, not including decorating, and transportation and medical and insurances.

4 - Decide what spending supports your values.

For example recreation may be that class you take or golf course you belong to or the travel to kayak on a lake. Keep those in your spending plan.

Decide if the you would feel better if you had spending set aside for the each of your values.

I have clients who feel guilty about spending money on vacation. Yet, time with their spouse is a priority. Setting up an account that they save in and then use it exclusively on vacation, prevents them from stopping themselves. There is money set aside for something they enjoy and appreciate. They find it easier to follow through.

After all, what you spend money on is as important as what you do not spend money on.

Enjoy your money, You deserve it!

Just plan a bit differently and come up with your philosophy first.

When is a Bargain, A Bargain? Think Twice

One would think with a stable like a petroleum jelly product, buying in bulk is a great idea. I caution you to think twice and learn from my two-dollar investment.

This jar is large, takes up space and is more than one person really needs. Though its nifty jar offers many ways to use it, I think using it to remove make-up is a mistake. That may be the cause of some eye issues I have had, but that is another story.

Look at the store I bought it from: Caldor. From a business perspective, Caldor is a great story. A family-owned store that grew from the Fifties to employ 22,000 people. Despite their success, the Caldor company is out of business. They closed their last store in 1999.

Now in 2022, I have the just about empty jar. I hate to throw it away especially if it is antique by now. If anyone has a use for this, let me know. Apparently I am attached to it after all these years. I believe I have only furniture and photos that long.

By the way, according to one site, the Malden store closed in the early Nineties. That means I have taken my bargain through at least a half dozen moves. No wonder I am attached!

Lesson from me….Be care when you think buying in bulk is a bargain.

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