Tag: money

How To Avoid Making Mistakes Managing Money

The way to not make mistakes like this is to have a plan for money coming in and going out, a spending plan.  And then strategies to help you follow the spending plan. 

I do not tell lots of stories on the blog, but I am going to tell a little story today.  And my reason for telling this story is that I believe it can help readers avoid mistakes managing money. 

We All Making Mistakes Managing Money 

Prior clients of mine recently made a huge, several thousand dollars mistake managing their money.  Without giving you lots of details, this husband and wife will be paying for this mistake for a little while.  As I discussed the issue with them, we eventually figured out what happened.  What it boils down to is not managing money well, because they had no clue where they were spending it.  I see this with clients often, where they are spending money and not keeping track of where they are spending it and no plan.   

As a financial coach, I believe knowing where your money is going or where you are spending your money, is critical and helps people manage money better.  That is what I teach my clients and others.  And knowing where your money is going helps you to cut and prioritize your spending when you see fit.   

The clients that I am speaking of will recover, but I tell this story to hopefully, stop others from making similar mistakes with money.   The way to not make mistakes like this is to have a plan for money coming in and going out, a spending plan.  And then strategies to help you follow the spending plan. 

A Spending Plan Will Help You Avoid Making Mistakes Managing Money

Having a spending plan to help you manage your money is of paramount importance.  With all the competing demands for your money, if you do not create a spending plan and then put that plan into practice, the competing demands will spend your money for you. 

And Now What

As I said earlier, I will work with them, and they will regroup and recover.  One thing is for sure, my clients are more convinced and fully persuaded that a spending plan is crucial.  And then following the spending plan is also very important.  What is the point in having this tool, that can start you on your path to financial freedom, and not follow it?

I am a financial coach.  Contact name here.  I can help you create and stick to your spending plan.

Money is Good for Three Things

My point in all of that is to say that it’s okay to spend your money. It’s your money, you earned it, and you should spend it but, you should also spend it with a plan in mind.  My goal is to help you create a spending plan to help you spend your money within some parameters. 

This holiday season as you, are shopping, keep in mind the three things money is good for.  If I were to ask you what three things money was good for what would you say?When I am teaching how to create a winning spending plan, I always ask this question and get a lot of different answers. 

Let me ask it in another way. 

The things you do with money, can be put into three categories, what are they?

When I ask this question, I always get similar answers.  Answers like It’s good for paying bills, buying stuff, saving, investing, and going shopping. 

And then I would say something to the effect of okay, we got spending and saving.  What is the third thing?  I put investing into the saving category. 

It’s interesting because at this point most of my students go blank.  Then
I ask again and say ok money is good for three things, spending, saving,
and…?  What are the three things we all do with money?

Most of the time I get no response and ask the class to think about and move forward with the class.

My point in all of that is to say that it’s okay to spend your money. It’s yours, you earned it, and you should spend it, but you should also spend it with a plan in mind.  My goal is to help you create a spending plan to help you spend within some parameters. 

What Are The Three Things?

Simply put, money is good for three things: spending, saving, and giving.  Interestingly when we are talking money, we forget about giving.  That is a discussion for another day. 

I am a Financial Coach, and I would like to help you navigate your finances and create a winning spending plan for you and your family.  Contact me
here, and we will do an assessment and get started improving your finances one GoldneRule at a time.  Take care.

When Finances Become a Source of Stress

When stress is getting you down, take a moment to reflect on all the things you appreciate in your life, including your positive qualities and gifts. This simple strategy of gratefulness can help you keep things in perspective.

Most of us have financial obligations or expenses that we must take care of.  Some of those include rent or a mortgage, maybe a car payment, credit card payments, and other needs such as clothing, and recreation.  Sometimes these obligations can become stressful and this stress can lead to anxiety, depression, and other physical and behavioral problems.  It’s important to take care of financial stress before it takes a toll on you and your family.

What Causes Financial Stress

Certain situations and circumstances can shake up finances and can lead to a major change in our finances and thus financial stress. 

For example, finances may be affected by a job loss or maybe a bad year of sales if you work on a commission.  Other major changes include a new baby, separation, divorce, or the death of a family member. 

However, financial stress can affect a family at any time and therefore, you must be able to recognize and manage it. 

Learn to Recognize

How do you recognize financial stress?  You have to learn the signs and signals. Your true sources of stress are not always obvious, and it’s all too easy to overlook your stress-inducing thoughts, feelings, and behaviors. 

For example, you may know that you’re constantly worried about being able to pay bills on time.  However, maybe it’s your lack of organization, rather than not having the money to pay the bills when they are due, that leads to stress.  Hence the importance to sit down and work with your money and bills consistently.   

Some signs of financial stress include: 

•Frequent worry or arguments about money

•Spending more than you make and using credit cards to make everyday purchases

•Only making minimum payments or making payments late

•Feeling overwhelmed by debt

If you are experiencing any of these, it could mean that you are experiencing financial stress and it is time to start managing that stress. 

Manage Financial Stress

Managing financial stress begins with identifying the sources of stress in your life. This isn’t as easy as it sounds.  

The ultimate goal is a balanced life, with time for family and work, relationships, relaxation, and fun – plus the resilience to hold up under pressure and meet challenges head-on. 

Talk about the situation and explain to family and children how things may and how they can help turn things around.  Keep up routines and keep life as normal as possible.  So, as a family, eat together and do other things together whenever possible.  Focus on the positive and know that your situation is temporary, and you can make it better. 

When stress is getting you down, take a moment to reflect on all the things you appreciate in your life, including your positive qualities and gifts. This simple strategy of greatfulness can help you keep things in perspective.

 Keep in mind that your children learn how to cope with stress by watching you. 

Create a household spending plan or budget.  This is the first step toward making it better and regaining control of your finances.  Track your expenses and know where every dollar is going.  In tracking expenses, you will begin to see ways to reduce expenses and save money.      

If your financial situation is stressing you out, recognize the causes of stress and begin to manage that stress.  Take charge of your finances and take charge of the stress. 

Managing Money Through Tough Financial Times

You should set aside some money, six to twelve months or so of expenses as a rainy day or contingency fund.  An emergency fund allows you to stick to your spending plan and still take care of that unexpected medical bill or car repair.  It also gives you confidence and peace of mind knowing that an emergency expense won’t derail your plan.         

The past couple of years have been tough financially for many.  Saving for the future and making sound financial decisions can help you endure the next economic downturn.  Below are some tips to help you manage through tough financial times.

Start saving for an emergency fund or rainy-day fund.  Do you remember when your grandmother told you to save something for a rainy day?  Today, this is an old-school recommendation that is made by many financial coaches.  You should set aside some money, six to twelve months or so of expenses as a rainy day or contingency fund.  An emergency fund allows you to stick to your spending plan and still take care of that unexpected medical bill or car repair.  It also gives you confidence and peace of mind knowing that an emergency expense won’t derail your plan.         

Make a plan to spend your money.  Most people do not deliberately plan to spend their money.  Bills come, and bills get paid.  Money comes in, and money goes out.  They go to the store and spend without a clear plan for their spending.  To manage money in tough financial times you should plan to spend your money.  Before you get paid, sit down and write out where you plan to spend your money.  If you can, try and base the spending on the previous month or prior spending history.  For example, if you spent $150 at the grocery store last week, you would probably spend $150, or close to it this week. 

Keep track of where you are spending your money.  Get a piece of paper and pencil and sit down and keep track of every-dime you.  By tracking your spending you accomplish two things.  First, you give yourself a benchmark to plan the next month or period’s spending; the next month’s spending plan.  Second, you begin to see where you can cut back on spending.  By writing down where you spend money you will begin to see patterns of behavior that can be changed to save you money and help you spend smarter. 

Use credit cards with care.  During tough financial times, keep your credit card spending in check and attempt to pay balances in full every month.  If you cannot pay the full monthly bill, at least pay the minimum balance due.  Every dollar over the minimum reduces the amount of interest you will pay. 

Comparison shop and get the best deals for financial products.  Shop deals on things like credit cards, loans, and other investments.  Avoid alternative forms of borrowing including, payday loans, pawnshops, and overdraft protection.  Keep away from these borrowing methods because they are very likely to have higher interest rates and can add up quickly.  This is as crucial as shopping for other big-ticket items like cars or appliances.  Saving even a percentage point on a loan can make a big difference to the bottom line.  And when it comes to your investments, compare fees on mutual funds and other investments       

Using the tips above will help you prepare and go through tough financial times.  As Maya Angelou said, “Hoping for the best, prepared for the worst, and unsurprised by anything in between.”

Tips to help you Reduce Financial Stress

According to Peter Drucker, a management consultant, author, educator, and the described founder of modern management, “Doing the right thing is more important than doing things right.” Doing the right thing is effectiveness; doing things right is efficiency. 

Sometimes stress is caused by expectations not met.  We think things should go one way with our finances and they go the other.  When this happens, when financial reality does not line up with our expectations, we sometimes become disappointed, and stress results.  Use the following tips to help you avoid money stress and lower financial stressors. 

Plan to Spend your Money

Using time to think and plan is using time wisely.  In fact, if you fail to take time for planning, you are, in effect, planning to fail.

As I have written before, managing money is a job, and it takes time, so plan accordingly.

Set Financial Goals

Financial goals should provide direction to your life and determine how you spend your time and money.  When setting goals, decide what you want, where you want to be, and what you want your money to do.  Further, when you set goals, set goals that are SMART (specific, measurable, achievable, realistic, and have a time constraint.)   

The best goals are those that cause you to “stretch” as you do your best to reach them. 

Prioritize

Use the “80-20 Rule” originated by Italian economist Vilfredo Pareto.  The 80-20 rule says that “80 percent of the reward comes from 20 percent of the effort.” The key to prioritizing is to identify the valuable 20 percent. 

Once identified, prioritize your time to work on those items with the greatest reward.  If you value managing money better, prioritize the time it takes to manage it better.   

Be Flexible

According to Peter Drucker, a management consultant, author, educator, and the described founder of modern management, “Doing the right thing is more important than doing things right.” Doing the right thing is effectiveness; doing things right is efficiency. 

Be flexible when working your money, focus first on the urgent, effective task, then concentrate on the important, efficient task.

The tips above can help you eliminate or reduce money stress in your life.  Be careful with stress it can cause mental, emotional, and physical health issues. How do you reduce financial stress?  I would love to hear from you.