Archive for the ‘Money Management’ Category

Many people I talk to become so focused on “fixing” the internal issues they perceive are blocking their prosperity that they forget to do the real-world tasks necessary for financial health.

Perhaps you are one of the people hoping that if you get your thoughts, beliefs, and emotions in perfect alignment, the money you so ardently crave and hope to manifest will somehow magically appear. Although there is a far-out chance that you will win the lottery or suddenly inherit a large sum of money, more often than not some grounded action is necessary to reach your financial goals.

First of all, if a large sum of money comes your way and you have no financial management skills, then like the proverbial lottery winners who spend everything they gain, your fortune is most likely to dissipate. Money doesn’t take care of itself — it requires constant love and attention, just like people. Read the rest of this entry »

I wish you all the best in 2010. And to help insure that you experience a healthy financial year, here’s what I suggest:

• Without delay, set up a system for keeping careful financial records. Use software such as Quicken, Quickbooks for your business, one of the many apps available for the IPhone or ITouch, or one of the online services such as mint.com. If you deal with multiple currencies, try AceMoney
• If you already keep good records, analyse the data. Determine your best source(s) of income, your highest expenses, and how your monthly income in 2009 compared to your monthly income in 2008. Be aware of changes in your sources of income and expenses. Read the rest of this entry »

If you want to thrive in this economic environment and prepare for a prosperous 2010, it’s time to pay attention to your finances and create a strategy for the new year. Even if you already keep good records, you can learn to go even deeper into what you can learn from your own numbers so you can get the most value from your money.

I hope that if you suffer from any level of Financial Vagueness Syndrome, you will decide that this is the time to hunker down and get real about your finances. One thing is for certain: Money doesn’t take care of itself. Without care, it’s like a wild child that needs to be tamed.

I’ll have to admit that I avoid talking about this because I know that people would rather have a magic bullet that fixes something and makes their money fine. But without money management, you limit your own prosperity.

Here’s what I suggest: Read the rest of this entry »

 Let’s assume, as I suggested last week, you’ve set an income goal that includes an amount you’d like to earn and you have set a date by which you’d like to reach your income goal. Now it’s important to make sure that you have a realistic container into which the money can flow.

If you are a business owner or practitioner, what is the designated income stream into which the money can come? A coach, for example, needs to have a website to draw people in or some sort of marketing that makes it clear what that coach has to offer. There also has to be a clear way for potential clients to contact the coach as well as an established payment system.

With products to sell, an entrepreneur needs distribution channels for the products and a manufacturing system that ensures prompt delivery. Without these, maintaining an increasing cash flow is difficult.

For those who have a job, have you upgraded your skills or done what is necessary in order to earn more? If you are on commission, do you have a system in place for increasing your client base or selling more to existing clients? Read the rest of this entry »

I spend a lot of time online and check out a lot of sites just to see what others are doing. I’ll have to admit that I’m getting totally worn out by get-rich-quick overload. Over and over again, I see headlines and sales letters promising that anyone can make six-figures by doing ____. (Fill in the blank). And it will only cost you ______ (Fill in the blank). And it’s guaranteed.

Here’s the  headline that pushed me to write this:
“How to Build a Six Figure Business in 33 Days From Scratch”

 (I predict that you will soon be seeing the seven-figure come on. Six figrues will be so yesterday) Read the rest of this entry »

In my book, Build Your Money Muscles, I talk about Financial Vagueness Syndrome (FVS) as a key stumbling block to financial comfort. If you don’t know what is going on with your money, it’s difficult to plan, strategize, and make rational financial decisions.

If you have been listening to the gloomy financial news, then you probably know that one of the main reasons the system is falling apart is that no one really understood the sophisticated financial instruments such as mortgage back securities and credit default swaps that were being traded in the markets.

Recently we learned that when billions of dollars of TARP funds were distributed, no one kept track of where the money went and what it was used for.

On top of that, no one was watching the store. When the SEC was warned about Bernard Madoff’s Ponzi scheme, for example, the warnings were ignored. No one really wanted to know what was going on.

You could easily conclude that Financial Vagueness Syndrome played a significant role in the global financial crisis. Has it played a role in yours?  Read the rest of this entry »

There was an interview on NPR  with a columnist from The Financial Times who pointed out that during past recessions, most people have held on to their jobs, their homes, and their income. His advice for now, be cautious but don’t panic.

I’ve spoken to a number of people in the last few weeks whose lives have mostly been affected by rising prices and/or dropping value of their investments. For many, this is combined with a general feeling of alienation from the niceties of life and the uncertainty generated by the presidential campaign. It’s difficult to feel grounded and focused.

Generally we’re in a wait and see mode, as we wait to get a glimpse of how the financial chaos is going to shake out. This is a time of caution. It’s not a good time to take great risks in either your business or personal life. Rather, it’s better to carefully consider any purchases or major moves, and if possible, wait. Unless you are faced with an emergency, wait.

It’s also a good time to plan for your future–to ask yourself what you really  what you really want to do with the next segment of your life, and spend time doing the research you need if you want to move in a new direction.

It’s also a great time to start improving your financial literacy and understanding of the financial world so when things do turn around, you’ll be ready. I know people who are poised now to buy things at bargain prices with the knowledge that they will benefit in the future.

Because times are leaner, staying in close touch with your money is a wise move. Now is the time, if you haven’t done it before, to start keeping track of your spending and earning and getting to recognize your own patterns. This is the time to cure your financial vagueness syndrome.

For a basic plan for doing these things, read my book Build Your Money Muscles. For a more advanced “course” in developing practical financial skills and overcoming issues like a not-enough or just-enough financial habit, read about Build Your Money Muscles for Financial Strength & Security.

Recently, I received a balance transfer offer from Bank of America for one of my cards that has a $0 balance. The offer is for 5.9% fixed for the life of the loan.

At first, the balance transfer small print looked like the usual–3% of the balance transfered with a minimum of $10. But it was called a Cash Advance Fee, not a balance transfer fee. Then I noticed some new fine print. Here’s what it says:

"This fee will post to your account as a cash advance fee and receive the Standard cash advance rate. "

I called BofA and asked what that rate is. The answer: 24%. And, of course, payments are applied to the lowest rate part of the loan first.

Let’s assume you transfer $5,000 with this offer. The fee will be $120 and the interest on that $120 will be $28.80 for a year. If you take a year to pay off the loan, you’ll pay that $28.80 plus the 5.9% interest,  plus the 3%. At the end of a year, you will have paid around 9% interest.

So would this be a good offer. Only if you are paying more than 9% now on the $5,000 you are transferring.

Any time anything unexpected happens financially, it’s a good idea to be hyperaware of your feelings. This can give you great insight into the dynmaics behind your finances.

For those of you in the US, when your tax rebate arrives, take a moment to tune into the kinesthetic experience in your body. A number of possibilities come to mind. You may:

1. Feel eelated. Like a kid who just  got a birthday gift and your immediate reaction will be to want to spend it.
2. Feel initially elated, then sad because it isn’t enough to get all of the things you want or because you know you have to use it to pay for bare necessities.
3. Have a feeling that someone cares about you.
4. Be aware of a sense of resolve that you will use the rebate, or part of it at the very least, to pay off some of your obligations. You decide that this is the moment that you are going to change your habitual financial behaviors.

Whatever you are feeling is most likely to be something you have felt in the past and your habitual behaviors will follow suit. This is the perfect time to be aware of the feelings, sit with them for a while, do some deep breathing, then do something that you wouldn’t normally do. Like doing nothing with the money for a week, then making a decision as to what to do with it.

One of the keys to moving to a new financial position is to change your behaviorss. This is a great time to do this.

If you are outside of the US, imagine that you are getting a check for the equivalent of $600. How would you respond?

If you’ve been working and playing hard, keeping track of your money is probably not something you look forward to doing. But the simple act of writing down what you spend and earn can help you move to a better financial position.

Money, like people, goes to those who love and take care of it. And what money likes best is to be counted. Financial Vagueness Syndrome, which many people suffer from, does not encourage cash flow.

Taking care of your money stimulates feelings of empowerment as well as increased self-esteem and self-trust. Avoiding the task does the opposite and often enhances feelings of shame.

If you’d like to improve your cash flow and can see the benefit of paying attention to your numbers, it can take a while to build up a habit. The decision you have to make is to start and to do something with your money as many days during the week as possible. Five minutes a day is often enough to keep things up to date.

On ProsperityPlace.com, you can download a PDF file with instructions for Basic Money Management.

My book Build Your Money Muscles also has instructions and can help you work through the shame that may be coming up when you think about your financial situation. That shame can be what is holding you back.