Personal Finance Tips from Bernie Sanders Campaign

None of us can avoid the attention the election is commanding on the television, radio or social media.  With the results reported, analyzed and criticized yesterday, I could not help but reflect on the winners and their financial strategies.  So Trump and Sanders won big in the New Hampshire primary.  What can they teach us?  

No matter what political stances you have, I believe they are demonstrating solid financial principles in their campaigns.  Some of their money principles we know.  Some we need reminding.  

Trump has the money to finance his campaign.  The reminder: Money can buy you what you want. Or think you want.  This is no news in our society.

Bernie beat out Hillary Clinton.  His financial strategy?  Build a campaign treasure chest from small donations from individuals. This demonstrates two financial principles immediately. First, he is using the cash mentality.  Have cash, spend cash and reap the benefits.  Second, he is taking the slow but steady approach to make big change.  

This principles are so important to us all.  Whether we want to get out of debt, save for a home or get ready for retirement, Bernie's campaign financing is a good reminder that complicated strategies are not needed.  

Want to learn other lessons from Bernie's Campaign?  There are several more life-long money lessons he is demonstrating.    Stand by here for more or sign up for next week's newsletter to understand more: www.moneypeace.com/email-newsletter-archive

 

 

Unexpected Benefits

With this new behavior of not entering stores, I realized that I use stores to kill time.  I do not call this activity shopping persay.  This is unplanned time in stores because I am early to get somewhere or I need a mental break on my way to a meeting.  More times than not, I do not spend money but there are times I do.  And the real issue is that I find things I did not want before I entered the store.  So I may go back to get them.  Or think I “need” because I saw something new. 

The truth is the less time I spend in the stores, the better off I am – financially and mentally.  There is nothing rolling around in my mind or making it to my shopping list that I think I just have to get. 

There is an additional benefit as well and I discovered last Wednesday.  I was downtown Burlington after a meeting and had an hour before a class I was taking that night.  A short walk around town without going into a store was lovely, but I was not going to push my luck with the temptation around me.  I got in my car and headed up to UVM campus still arriving more than a half hour early.  As I headed to our meeting place, I figured I would have some quiet time to read alone. 

Instead I was met by another student who was arranging the classroom.  As I helped her set-up the chairs, we had a wonderful conversation.  When another student joined us, the conversation even got better.  When the fourth member of our class came in lamenting her need for a new job and struggle with a cover letter, we all offered to help review it for her.  The connection was fun and light and engaging.  Best of all the time flew. 

What I discovered was that that this time was so, so much better than the quiet time of walking aimlessly through a store.  I felt much more recharged and engaged in the world.  And I did not have the feeling that I was missing something or in need of something.  I had found something.  In the time that I had opened up, I had come to realize the personal connection that is very much needed to maintain my balance in the world.

I may just consider arriving early to a few more places in my life.

Getting Easier...Or Did I Forget My Wallet?

Not going in stores is getting easier.  Yesterday I found this commitment easiest to keep.  I had left my pocketbook with my money and credit and debit card at home.  Yes, given I was going to a ski area to ski, not shop.  However, the absence of these tangibles meant that there was no dilly dallying on the way home.  No reason to stop anywhere. 

At the ski lodge, there is a wonderful little ski shop.  I literally stood at the entrance and walked in two steps when I remembered my commitment.  Two steps out and I was back on track.  How does one spend a day without a spending while skiing?  Well, since I was volunteering for Vermont Adaptive - a fabulous program - I did not need to pay for my ski day.    But also keeping snacks and a water bottle in the car makes it manageable.  The water bottle can be refilled in the cafeteria and one really can survive for a day without money, especially if they are doing something fun.

The weather was fabulous, the snow soft and the people wonderful.  I will treasure all week the smile on the lucky young man I got to ski with yesterday.  He loves to go fast, do bumps and enjoys the gates.  He will be ready for the Special Olympics next month.

Money had nothing to do with yesterday.  How would you survive a day without money?

Financial Myths: Your 401k Loan

The financial myth around 401k loans is purely based on emotions and not facts.  Yes, sounds good if you are going to take a loan I hear, "May as well take it from yourself."  Yourself being your 401k.

However, what employees miss is that the money in your 401k is pre-tax money.  When you pay the loan back, you use after tax money.  So you have paid taxes on that money already and will pay taxes again when you withdraw the money in retirement.   

So before you calculate in the potential growth of investments or the downside risk of not being able to pay the loan back, consider simply the tax issue.  A loan is a loan.  But who and where you take it from matters.  

Listen to the numbers not your co-worker.  Even if the new fun car is calling.....

Stopping Shopping...More Time

Okay so it has been three days since I have entered a store.  This plan of mine does not include groceries stores, as our family has to eat.  But I will not cheat and buy things more than the food we need when I am grocery shopping for the next 28 days.

What have I learned just this weekend without shopping?

Time saved: I do not need to read the advertisements in the Sunday paper.  They can go right to recycling.  I am not entering a store because there is a sale.  This includes the flyer I had already put in my car because there was a good deal.  I recycled that flyer and took stopping at that store off my list of things to do.

Key Found: Since I had a bit of time and was in my car without driving to grab and dispose of the dangerous store flyer, I decided to clean it up a bit.  To my surprise, I found a key under the seat that I had been looking for during the past month.  Yes, I had already looked under the seat.  I was about to get another one made.  As it was my business post office box key, I saved $9 because of yesterday's discovery.

Web Browsing:   Yes, Internet shopping is shopping to me.  Without shopping and browsing on the web, I have found several great sites on my other interests.  So fun to read more about genealogy and Irish history - all for free.

Stop Shopping to Save Money

Pondered today what I heard about not going into shops.  This was on the radio by a behavior psychologist.  When we go into shops we see things that we did not know we needed.  Then we increase our wants and desires.  The psychologist suggested we do not go in stores to curb spending. I have done this successful at different times.  Maybe I will try this again now.  I had already slowed down the process by taking both my credit cards out of my wallet – the one for business and for personal.  They sit home in my office.

Why not revisit this idea?  I decided on Friday the 23rd of January to not shop for a month. 

I can do my one month without shopping at stores.  Without going into stores.  I can do that.

Standby for an up date...Or join me in the pledge!

 

Myth: Winning the Lottery Will Solve My Problems

The lottery is a game.  A game to play for fun.  The odds are not great for anyone.  As with the stock market, there are winners, but there are many more losers. Playing and having fun are great for the spirit.  We want to bring more fun into our lives. What we are looking for is truly to have more financial stability in our lives.

Think you will wait until you win the lottery to be financially solvent? You're more likely to die from a bee sting (one in 6.1 million), be struck by lightning (one in 3 million) or have conjoined twins (one in 200,000). And once typical lottery winners have their money, they are more apt to go bankrupt, according to one study of Florida lottery winners. 

Getting rich quick through the stock market, lottery or professional success is not a guarantee of financial stability. According to Sports Illustrated, within five years of retirement, 60 percent of NBA players are broke,  Kim Basinger and Mike Tyson filed for bankruptcy.

Spending Consciously is as Important as Saving...

I am thrilled this month to be mentioned in the professional journal Investment Advisor.  

This article on behavior and money may make you think as you plan for your future.  

 

http://www.thinkadvisor.com/2015/11/02/advisors-give-your-clients-permission-to-spend

 

What If?!??!

With many folks thinking about the stock market ups and downs this past month, I began to wonder...

What If you knew the stock market was going to plunge tomorrow, what would you do?

Many people would want to react and take their investment money out of the stock market. They would feel better if they had money in the bank rather than watch the media report the drop in investment value across the board.  They would want to know their money was safe.

What if you knew the stock market was going to go up tomorrow? Now what would you do?

Many people would want to add more money. They would figure they could make money. Taking on more risk would be okay because after all the returns would be worth it.

The truth of the matter is, no one truly knows when the market will go up or down. If anyone tells you they know, be very surprised and very cautious. The market goes up and down on a regular basis. Yet, when it goes up for years, people get complacent, as we have since the 2008 declines. We have a new round of declines that may last a long time. Or they may not.

What is one to do? The answer is a middle of the road strategy. See the answers above to what you would do if the market was going up: Have some cash in the bank so that no matter what happens, you feel your financial life is safe. 

For those times when the market is going up and you want to be buying investments, continually invest. Contribute monthly to your 401k, IRA or other retirement vehicle. A little bit on a regular basis makes a big difference in the long term. 

There is no get rich quick scheme and no crystal ball. We all have to ride the wave of ups and downs. In the meantime, we can make balanced choices to control what we can. No matter "what if" scenario plays out, you will not be reacting.  

Act in a balanced long-term way and think long-term.

Want to see or listen to more? http://www.moneypeace.com/online-videos

What Makes A Great Day?

Sometimes a great day is when a planned event goes smoothly and well.  Sometimes having no plan creates just what we need. Time to wander.  Follow your intuition.  Or just not be accountable or responsible to the clock.  For others the perfect day is having time alone.  Or even an afternoon alone. 

Yesterday I took my day off in the "Smallest City in the Country.". Vergennes also happens to be a short drive from me.  After a leisurely lunch, I headed slowly for a strong coffee I was craving to write and sit inside from the sun. 

This took awhile as I wandered through every store without a need, care in the world or clock to follow.  When I finally arrived, the coffee shop was closed for an extended vacation.  Disappointed, I headed to the clock shop for an update on our clock being repaired while I thought of it.  After my short but lovely walk there, I found they had also chose to take the day off.  Who was I to comment or be disappointed?  I was doing the same. And after this stop is where my afternoon perked up so to speak. 

There was the chocolate shop.  I had never been in, though I had tried and found the place closed on other days.  Today the sweet smelling and cozy shop was a delight.  With my two pieces of dark chocolate in hand, I sat outside and reveled in the wonderful day writing and savoring the smoothness of my treat.

Sometimes the simple things can feed us if we allow the time.

 

Time for Panic? Or Peaceful Action?

Monday.  China is calling it Black Monday.  What will happen this week in the stock market?

Everyone is watching and wondering.  There is plenty you can read on the market being overvalued.   And you can watch the real time numbers of a falling US stock market.  The conversations are fueled as much by the media as the facts.  You can stand by and watch.  Or you can stand by and panic.  Or you can take another route.

Review where you and your family are at financially today.  Look at your credit card statements. Take a deeper look at where your bank accounts stand.  Do you know what you are investing in for your monthly 401k or IRA investments?  Write it all down and keep it where you can see it.  This is your current reality.  The market will always change moment by moment.  

Cash for your current needs is what is most important.  If you get antsy and feel you must do something, then be sure your income and dividends are not reinvested.  Continue your retirement contributions into something safer.  No need to be adding more to the market when you feel insecure.  

This is a reminder that if you have been rebalancing and reviewing every year, there is no need to react.  If you are investing long-term, there is no reason to panic in the short-term.  Changes need to be made thoughtfully.

Then, turn off the television.  Stop watching on-line.  The market does not control your life.  

Travelling Overseas? Some Tips to Remember:

Three simple tips to make your trip smoother:

Have some Local Currency: Not every place will take credit cards.

Notify Your Credit Card Companies: They can turn down a transaction if it is not in your normal routine.

Be Aware when you use ATM machines.  This is a quote for a US government website on travel :

ATM skimming devices. These devices are attached to legitimate bank ATMs, usually located in tourist areas, and capture the account information stored electronically on the card’s magnetic strip. The devices consist of a card reader installed over the legitimate reader and a pin-hole video camera mounted above the keypad that records the customer’s PIN. ATMs with skimming devices installed may also allow normal transactions to occur. The victim’s information is sold, traded online, or encoded on another card, such as a hotel key card, to access the compromised account. Here are some helpful hints to protect against and identify skimming devices:

·         Use ATMs located in well-lighted public areas or secured inside a bank/business.

·         Cover the keypad with one hand as you enter your PIN.

·         Look for gaps, tampered appearance, or other irregularities between the metal faceplate of the ATM and the card reader.

·         Avoid card readers that are not flush with the face of the ATM.

·         Closely monitor your account statements for unauthorized transactions.

The Best SuperBowl Ad

The Super Bowl has been known for its ads for years.  The cost of the spots as well as their creativity.  The game had special meaning for me this year as a Patriots fan.  I love a good football game and I got it on Sunday.  The bonus was the Patriots winning.

What lingers with me most two days later? One commercial.  The commercial itself was powerful.  The public service announcement advertisement was unique in showing help was out there for domestic violence victims.  The amazing fact that this spot was shown during the Super Bowl did not escape me.  More revealing was knowing that the NFL funded the profound segment.  Something's changing and I appreciated this visual and financial acknowledgement. 

Only when I went looking for this add did I learn the dialogue was from an actual call.  What a fabulous, smart, strong woman! Remember, domestic abuse can happen to anyone.  Let's hope this minute continues to run and the message saves a few more victims. 

If you missed the anti-domestic violence psa, you can watch here: 

Simple New Year's Resolutions

Our intentions are good but sometimes the grandness of the season takes over. We make elaborate promises or set large momentous goals to create change in our lives. 

This year I ask you to consider setting a small and simple money goal for 2015. Here are suggestions to change your behavior and bring some financial order to your life:

·         Create a money folder or basket – both on line and a tangible one at home.  Each piece of mail that arrives related to your money, whether bill or income, drop into the file basket.  Now, even if you have not taken the time to file the information, it will all be in one place when you go looking.

·         Decide to unlink your credit card from your favorite shopping sites.  Yes, that means every time you go to Amazon or QVC or Target, you will have to enter your card information.  This one step will slow down the shopping process and downsize your bill in the process.

·         Balance your checkbook once a month.  Yes, that is right.  People do still balance their checkbooks.  The reason why is clear: People who keep track of their money, actually have more money.

·         Build and enact a giving plan.  Charitable giving tends to be a spontaneous on the fly experience.  Before you can make a decision to give in a heartfelt manner, you have to know how much you can give.  No matter how much you have, you can share some bit with others.  The amount is not important, the sharing is.  Giving from a positive place on a regular basis makes the giving circle complete.  Your choice of charities is personal. 

True change happens one step at a time.  MoneyPeace is a process that allows all of us to feel abundant.  Desire a more peaceful life?  Commit to just one money change listed above or come up with one of your own.  Taking the time to make one change will change you. 

So today you have two simple tasks:

1.       Choose something to change in your money behavior moving forward.

2.       Leave the past behind.  No more excuses, self punishment or negative talk.  We are moving our money into a New Year and a New Place.

Here is to a fresh start in 2015!

Auto Pay or Auto Pilot?

Our money world has changed dramatically over the past two decades.  We can pay electronically, automatically and periodically.  We do not have to even click a button to make a monthly payment.  Like magic, our credit card or utility bill is paid.  Such options are advertised as saving us time and money.  After all, no stamps or envelopes are involved.

Yet, most people do not have a handle on their finances because everything is happening so quickly financially.  No more time to write out a check or count out the cash when in line for groceries!  Instead, we swipe and go. This mentality challenges our record keeping.  Good recordkeeping is key to keeping some money for you. 

So we all like the automatic transaction.  But do you know where your money is going?  Could you tell me today how much money comes out of your checkbook automatically each month?  Most people cannot.  Then, the amount of auto pays from their credit card needs to be understood as well.

Your task for today is:

Find out which auto pays come out of your checkbook.  Then, from your credit card.Looking at a recent credit card and bank statement will give you this information.

Then, total the amount. Make a note and keep the amount handy for later this week.

This is part of your gaining not only an understanding of your spending, but your consciousness around how and what you spend on.  MoneyPeace means knowing where your money goes and having a system.

If you have this simple way of paying bills, consider who benefits in the long run.  I believe it is the company getting paid, not you.  However, there is a way to make this easier to track.  In the future we will talk about how a MoneyPeace system will help you frame your money decisions better. 

Thinking ahead, one thing I always say is “People with money have accounts.”  So if you want some more money in your life, consider a different way of managing it.  For now, you do not have to make any changes, just explore the possibility and any resistance you may have to the change.

Here are some more thoughts on “People with Money Have accounts.”  For less than four minutes of your time, check out this MoneyPeace video: https://www.youtube.com/watch?v=3zuF3Dc0Hns

Cash Consciousness

Creating MoneyPeace is an inside and outside job.  We all think of spending when money comes to mind.  However, there is the first and most essential element of cash flow: Consciousness.  So do you pay attention to your money?

For example, do you know how much you spent yesterday and on what? Yes, that includes spending in the form of cash, check, debit or credit.  This question need not be difficult if you are making proactive rather than reactive transactions.  Also, not difficult if you pay attention during the transaction and realize the dollar value of what you have purchased. For many people this is where spending gets hazy.

So instead of dredging up the details of yesterday, chose to make a difference now.  Each and every time you use money for a purchase today, pay attention to the amount.  You may chose to write it down.  Or just make note mentally when handing over your debit card.  This process is very different than looking at the end of the day.  This is another form of living in the moment.

That is part of the inside of consciousness.  The outside part is “Watch your language!”  No, I am not channeling my Mom.  I just hear people so often use negative language around money.  What is negative language? Here are some examples:

·         I cannot afford that…

·         He or she is lucky, they are rich.

·         I will never be able to retire!

These types of words and expressions drain us and our relationship with money.    They leave no room for a positive relationship with money.  You want a more positive relationship with money.  So just for today:

1.       Pay Attention to How Much You Spend and On What

2.       Be Attuned around Your Language When About Money

Until tomorrow….

Have five more minutes?  Watch some thoughts on spending differently:  http://www.wcax.com/story/25245210/financial-literacy-month?autoStart=true&topVideoCatNo=default&clipId=10052223  (Excuse the first minute of commercial)

Have a few more minutes? Read this email newsletter or earmark to read later today: Let Freedom Ring -http://us5.campaign-archive1.com/?u=4d0598a17c7b535521d1ef2a5&id=4d5aa7a31e

 

 

 

 

 

 

 

 

 

Happiness is An Abundant Reward

Want to Be Happy?  May Be Better to Give than Receive.

Now that feeling of blessing when we give is being measured.  What a 2009 study reveals is that happier people are givers.  And that giving makes people happy.  So this is one vicious circle worth joining.

Giving does not just mean money.  Does not just mean to charity.  Opening a door, assisting a stranger and giving time to make someone else's life easier all help us become happier people.

Here is the short and easy to read study:

http://www.hbs.edu/faculty/Publication%20Files/10-012.pdf

Free Travel? Buyer Beware!

Just because I got a postcard and had some free time, I wanted to go to a presentation on discount travel.  The presentation was for couples only.  I was curious and had a husband who was retired and could go along.  

I called and set up an appointment to attend a ninety minute session which would yield us two free airline trips anywhere in the US and three nights hotel.   I was intrigued because upfront they were clear this is not a timeshare event.  Okay so I am curious…and I called.  After the call I had no more information except I was ready to go with a scheduled time and day and somewhat reluctant spouse.

The session was held at the local Holiday Inn. On the plus side ,the team was efficient and timely in signing us in.  We met with a team member who took us to our seats.  He offered us water. And asked us about our recent vacations. 

Had I not been a financial planner, travel agent would have been my career of choice. So we had lots to talk about.

The presenter was great except for not understanding Vermont culture and his repetitive use of “you guys.”   I learned a little more about the travel industry and how it works.There are three levels of consolidators all getting a share of the vacation travelers dollars. The largest four companies own most of the websites out there.

And that typical Vermonters spend between $4,000 – 6,000 a year on their vacations.  This is valuable information.  Though it excluded how many people go on vacation. As I imagine, not every Vermonter takes a trip each year.

The slides were great.  The dream vacations incredible.  And the opportunity to dream even better. 

Clearly he was using new math or reverse math. I am sure because he wanted us to buy without thinking.  Explaining that over the course of ten years, we were to spend, $4,000 a year on vacation, for a total of $40,000 total.  Then, we bought the package at $10,000 and were to save 50% on vacations going forward and some money eating out with their special discount card and we would be saving $25,000! 

I did want to raise my hand and say that we would be saving less as he did not factor in the $10,000 outlay or the annual fee of $400 or the mandatory registration fee of $600.  Though I kept quiet as much to keep the guise of a willing potential customer as to not embarrass my husband who was already taking a risk to be here with me.

After the formal presentation, the tag team approach to selling took over. The salesmen lost me totally then. We made a small offer just to be nice.   One left to make a phone call to see if “corporate” would approve our low ball offer.  This great car salesman approach has never felt good to me.  Straight talking is where I am at.  The gentleman in training stayed and talked to us.  I said this is not the package for us.  They did not describe the type of vacations we typically take and we sometimes vacation separately.  The fact that my husband hunted was more attractive to him then I often visited relatives in Ireland.

He recommended Larry do some elk hunting and at a certain ranch, where I could stay. Larry said I am not an elk hunter.  What do you hunt?  Points for the first question.  "Whitetail deer" was the answer.

Well how about boar hunting?  There is this great lodge…”No, I say I have tried to get him to do that, it is not his idea of hunting to go boar hunting or stay at a nice lodge. Always a bad sign when a sales person does not listen.

He kept talking….You could go to Northern California and both stay at this resort where you could hang out while he goes trout fishing.  I am sorry to say that I was happy to see the car salesman come back. 

Then, the numbers started to fly.  He sat with the piece of paper facing him and talking fast writing down numbers as he ranted.  Fast and furious he went about what a good deal he was giving us.

I started back from square one and said the numbers do not add up to the thousand, we suggested.  But much more than our offer.  And the 19.00/month is not what we want.  He went through the same numbers again.

By the end he said,  "It cost you $ 1.25 a day and we pay you back on some of your trips.  That means that it is like you getting $ 1.50 from us and if you travel, you get your $2,000 a year back."  I was like whoa….Did he know what we did for a living?

Come to find out others were offered the Trial offer of $1,000.  However, they were also offered the monthly maintenance  fee that rose the price dramatically.

Come the vulnerable, the people pleasing, and the couples who cannot communicate.  Because such events are designed for you.  This one ninety minutes could create financial commitments and problems beyond current problems.

I was frustrated and though I did consider it for a bottom basement price.  This was really not the way we travelled.  So it was not worth it.  And besides, the sales strategy had totally turned me off.  Mid way through it became a game to me to see what they would do next

I can see why people get bamboozled into buying.  You see the persuasiveness and throwing the numbers around and the utter confusion they leave you with, thinking this must be a good deal.  Spinning me around and point me in a direction is what I am thinking it is more like.

My husband an accountant by trade, told me that he was confused by the numbers.  “I could not follow them,” he told as we drove home.  “That is their goal,” I said, “They want you to lose track, so that you believe them.  If you, who are good with numbers lose track, think about the average Joe.” 

Another sale in their mind was dwindling away. Getting out, once we stood up with our coats on was surprisingly easy.  I admit that I saw another couple get up first out of the corner of my eye and that gave me the confidence to do it quicker than I might.

All in all, I will take my risk and skip their "wonderful" deal.  I do not want to spend money on something with an annual fee that we may or may not use.  I do not want to pay a lot of money now, to save money over time, especially on a discretionary spending item so dependent on health, wealth and willingness to travel.