Archive for April, 2009

Create Your Own Stimulus

April 15, 2009

We’ve heard the term stimulus a lot in the last 3 months.  Our President, congressmen, and senators have thrown billions of dollars at the economy trying to jolt it into a recovery.  Whether the funds will accomplish the intended results remains to be seen.  My intent is for you to worry about what you can control.  While the stimulus is putting billions of dollars into this economy, the actual help it provides to your bottom line is probably minimal.  I think you your time is better spent creating your own stimulus plan.  Below are some clear cut measures you can take to create your own stimulus plan. 

1) Have A Written Budget.  Unlike the earmarks and fat of the stimulus, have an exact destination for your money.  Have categories for expenses such as mortgage, groceries, utilities, insurance and the like.  You can’t captain a good ship without knowing the conditions of all the parts.  You need a written plan for your money before the first dollar is spent.

2) Fund and Emergency Fund.  You must prepare for the unexpecteds of your financial life.  Murphy will come visit you.  You need a buffer between you and life.  This is your emergency fund.  Having a mimimum of $1000 will keep you from having to take the bailout money (credit cards).

3) Turn a Hobby Into Part-Time Income.  When you have a shortage of funds, seek out other types of income.  If you have a strong interest or aptitude for woodworking, start a part-time business.  If you’re a computer whiz, folks will pay you for repairs or consulting work.

4) Slash Your Expenses.  There are cheaper ways to finance your life.  Must you have premium cable with all the extras?  Must you have a brand new gadget when the one you have works just fine?  Must you pay full price for groceries?  Couponing can make a difference.  Good deals can be had at garage sales, consignment sales, and flea markets.  Imagine how much better our government would be if they only spent what was in the account.

The only money you have control over is your own.  Don’t wait on Washington to solve your problems.  Get your own plan together and create your own stimulus.

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Personal Wealth Redefined

April 13, 2009

Can wealth only be measured by dollars and cents?  Are there investments you can make that cost nothing materially and still yield great gains.  The answer is yes. 

Good Investments.

1) Time with your children.  I’ve heard it said that children spell love T-I-M-E.  You don’t get a do over when it comes to parenting.  We all get one shot and we best get it right.  There’s a lot at stake if we don’t.  Our children deserve our support, time, and attention.  As I was writing this post my 3 year son asked me to toss ball with him.  I put my pad down and entertained for a few minutes.  Let’s not get too busy and forget the valuable investment of time with our children.

2) Time with spouse.  As the father of two children I can tell you quality time with my spouse is hard to find.  Is it worth the effort? Absolutely.  My decision to marry meant that I should put the needs of my partner above my own.  While I don’t practice this daily, I do try to communicate well with my spouse and work with her as much as I can.  My children will only be around until their early 20’s (hopefully). I plan for my wife to be around for the rest of my life.  I need to invest in our relationship as much as I can.  Don’t neglect the needs of your spouse.  You made a commitment when you said “I do.”  Do your best to honor that.  Your marriage will only improve when you do.

3) Time with God.  I am a Christian.  I place high value on God in my life.  While I don’t spend time daily in prayer, my relationship with God is important. When I chose him as my savior I became a different person.  I try to live a life that shows that change.  My words and actions should reflect that change.  He is the foundation of my life. 

4) Making Memories.  I want my wife and children to share great times with me.  I think I need to focus on having great times with my family.  Family is about traditions and fun.  While I feel the pressure to achieve great things in financial terms, I pray I never lose sight of the opportunities to have great times with those I love the most.  If I become too selfish and let these moments go by I will have become bankrupt.  I will have squandered opportunities that I can never get back.

What about you?  What is your definition of personal wealth?  Does yours only involve dollars and sense?  Look at the people around you.  What are your values?  Spending a moment thinking on these things may give you a different angle on what wealth is all about.  What non-material investments do you place value on?

If you desire more information on this topic let me recommend a great book:  LifeFocus: Achieving A Life of Purpose and Influence by Jerry Foster.

College Rules…Work for Your Fun

April 10, 2009

It’s no secret that the costs of college rise every year.  As your child nears college age it’s important to look at what you can offer your child in the way of assistance.  My premise is that the college experience should be a partnership between parent and child.  While nobody will argue that fun should be a part of their experience, it’s not unfair to ask your child to fund some of their own fun.  It’s important that they be a part of this decision.  Below are some possible solutions to funding your child’s “fun.”

Matching Funds. For every dollar he/she raises you will match it dollar for dollar.  You could also use a ratio (3:1, 2:1).  This matched money goes into an account set aside solely for college fun expenses.  You might consider setting a time limit on this.  Example: Every dollar you give me for the next 3 months I will match it.  You’re not only helping them fund a college expense but instilling responsibility as well.

Match up to a specific dollar amount.  Your budget may not permit you to do a match for every dollar earned.  You may need to set a cap on the amount that you match.  Once your child meets that cap, the rest of the money raised is unmatched.

Summer College Stimulus.  This is an example of the time frame listed above.  Your current/future college student can receive matching funds for any money given to you for the summer.

Set Parameters on What You Supply.  Let your college student know how much fun money you will supply.  You must remain firm on this issue. Remaining firm will teach your young adult child discipline and responsibility.  You will also need to tell him that you’re willing to discuss ’emergency’ events to determine if additional help is needed.

The decision to fund your child’s college fun is an important one.  How much help you provide should be based on your specific financial situation.  You need to understand that your child’s involvement in the solution can promote responsibility.  Involving your child in raising some of these funds just might teach them lessons they won’t get from a book.

6 Ways to Create $50 a Month

April 7, 2009

Maybe your skeptical about coming up with the $50 a month to start funding your retirement?  Times are tough and squeezing an extra $50 can seem daunting for some folks.  Below are 6 straightforward and simple ways to find the $50.00 (or more).

1) Couponing.  My wife has been couponing for nearly three months and saving $50.00 can be found quite easily using a few tried and true methods.  For more information read my post, “Winning with Coupons.”

2)Part-time job. 

3) Invest Your Raise.  Look at this math. $40,000/yr job gets a 2% raise equals 800.00 a year.  After taxes, $600 a year.  600/12 months is $50 a month on the nose. 

4) Downsize something.  Satellite TV package, insurance, car, cell phone package, etc.

5) Sell Something.  Some examples are Ebay, yard sale, consignment sales, or anything else that takes up space in your life.

6) Income Tax Return.  Most returns average well above the $600 you need to fund your extra $50 a month.

What do you say?  Are you up to the task?  Is your future worth a few small changes now?  Go ahead and take action today to start your journey toward a better future for yourself and your family.

Retirement Made Simple..Can You Spare $50?

April 6, 2009

If today’s economy has taught us anything it is the simpler the better.  I don’t think many folks today have a couple extra hundred dollars a month to throw at their retirement.  My question is, “Can you spare $50? a month?”  There is one caveat here: You must have a $1000 emergency fund before doing so. Why? You don’t need to fund retirement before being ready for the financial unexpecteds of life.  Retirement funding before emergency fund is putting the cart before the horse.  If you need help starting an emergency fund, I have previous posts on the topic.  Once you have your emergency fund, begin setting your $50 aside in an automatic savings account.  Example: www.ingdirect.com.  I want you to do this consistently until you reach $1000.00.  At that point you can begin shopping for solid mutual funds to start a ROTH IRA.  For information on Roth IRA benefits, consult my previous post.  You may wonder if it’s worth the effort.  What can $50 a month do for me long term? I’m glad you asked.

A 35 year old invests $50 a month for30 years getting 7% return = $17,872 (after inflation)

A 45 year old invests the samefor 25 years at same return = $11,872 (after inflation)

I think this tells you that a little can become a lot.  If you desired more you could increase your contributions to get more.  Investing in stock mutual funds  (long term) can bring returns higher than 7%.

You have to start somewhere.  The journey of a thousand miles begins with one step.  You have to decide if that time is now or later.  Maybe you can’t come up with $50.00 a month. My next post will give you several suggestions.