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Then What?

When you sit down to plan 2010, before you launch into the details, make sure you spend a good deal of energy focusing on the big picture.

What are you passionate about?  What have you been putting off that you'd like to get done?  Think about what it is you'd truly like to accomplish in 2010, jot it down... then expand on it.

  • Is there a dollar amount you'd like to net? Great, then what?
  • More quality time with your family? Great, then what?
  • Volunteering with an organization you're passionate about? Great, then what?
  • Changing careers? Expanding your business? Writing a book? Going to school?  Getting organized?

THEN WHAT?

The Timer Trick

Do you have things piling up on your desk, emails that are going unread or return calls that just aren't happening? 

Here's a trick for getting them done:  Use a timer.

The Fine Print

Every day we're confronted with fine print.  It's in advertising, credit card agreements, service agreements, not to mention the junk mail and spam offers that we’re overloaded with.

But, have you ever actually read the fine print? 

Legalese, boilerplate and fine print are intended to clarify the terms of the agreement.  But would you actually sign an agreement to "monitor your credit" if you knew that the real cost to you was $360 a year even though you can do it yourself three times per year for no charge?  Would you transfer a balance to a new credit card knowing that you have to pay a 4% fee for the privilege of giving your money to the new company AND that your interest rate skyrockets to 42% after the 2.99% initial rate expires in three months?  Would you sign up for an online offer that requires you to agree that the company can sell your personal information to anyone they choose?  Probably not. 

But know this:  the actual terms of the deal are often spelled out in the fine print.

You Can Afford It

Beware of the way we are sold to. 

Advertising professionals get paid a lot of money to influence our buying habits.  One way they do this is to make purchases appear affordable.

For example, in order to make a $25,000 car loan appear affordable, the advertisers and dealers break it down into monthly payments.  After all, $483 per month is WAY less than $25,000 right now… or is it?

The "BNPL" Plan

"Buy Now, Pay Later" seems to be the mantra these days.  The Government does it, the states do it, we citizens do it, heck even tourists do it!  But does it make sense financially?  Probably not.

Your REAL Hourly Wage

Try this eye opening exercise:  calculate your REAL Hourly Wage.

Here's why you need to know your REAL Hourly Wage.  In order to make intelligent spending decisions you need to be able to determine the real value of the purchase.  In terms of budgeting, if something goes out as an expense, something else needs to come in as income to balance it.

How Will You Use What You Save?

Ok, you've started saving. Great! But now you're running into some bumps and you don't feel like saving. Here are a few things that may help keep you on track:

  1. Keep a crystal clear picture of what you're saving for. It could be replenishing your emergency fund, a down payment, a trip, a car, whatever it is, keep the picture clear in your mind (or even in your calendar) and your actions should follow.
  2. When looking at a purchase, think about what you could do with that money if you didn't spend it. An extra $50 and $100 here and there adds up quickly.
  3. Ask yourself how many extra hours you'll have to work at your REAL Hourly Wage to pay for the purchase.
  4. Finally, ask yourself if the purchase will get you closer to your goals.

These simple questions should help you overcome the obstacles and further solidify your strong financial behaviors.

A Temporary Imbalance

A respected friend of mine told me that her family has found that on the months they make and follow their budget and make sacrifices, they usually have an extra $100-200 when the month ends.  She went on to tell me that on the months when they don't make a budget, they often run out of money before they run out of month.

Manageable Bites

Let's say you've got a big goal.  Maybe it's to acquire a business for $2M.  Maybe it's to pay off $100K debt.  Maybe it's to gross $1M by the end of FY10.  Whatever it is, in order to increase your chances of making it a reality, you need to break that big goal down in to manageable bites.

The Magic Question

There's magic in the question:  "How Can I…?"

Think about it.  When you ask yourself, "How Can I…?" you automatically engage your brain in doing what it's really good at: solving problems.  You start focusing on solutions, you do not waste any time dwelling on problems and obstacles, and you continue forward progress.

Let's look at two scenarios.  Assume you've been working very hard at your business, resolving lots of issues, overcoming a myriad of obstacles and getting aligned with your goals.  Then, you encounter yet another rather large obstacle.