After the hectic shopping & social occasions, it’s time to reflect on the year gone by and what’s ahead. One of Branson’s hobbies is creating his future and I always spend at least half a day this time of year with pencils, textas, paper & calculator, just imagining possibilities and noticing what ideas give my body that tingling feeling. When you work out your path of purpose, (more…)
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lesson 33: Ho Ho Ho How far will you go?
With Christmas around the corner, how much are you planning on spending? And will you stick to your plan? It sounds like common sense but most of us don’t take the time to quickly jot down how much we’re spending on who. Add to this travel and food costs and we all know Christmas can be expensive. The first step is to put it on paper. If you’re not being paid for your holidays make sure to space out your current income. (eg put that $1000 pay check down as $500 each week for 2 weeks). The Basic Budgeting spreadsheets are great for this, as is Excel.
Sticking your head in the sand over the festive season will only leave your bottom exposed to be whipped in the New Year! And remember presence is more important than presents. See what I gave my niece and nephew for Xmas by signing up to the newsletter at www.financialfitness.com.au
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lesson 32: The whipper becomes the whippee
I’m a week and a half late in writing this! That’s what happens when you move house, office and then realise you need to rip the carpet up because the lingering pet and smoking smells remain. So should I discipline myself? While we like to self talk ourselves into negativity (some say it’s human nature), I believe my saving grace has been that I’ve saved myself $2,000 on the floor overhaul.
At first the interest free option of the larger store seemed enticing, until I did my research and calculations. By going through a wholesaler, learning about the different products and getting an independent layer, I’ll still be saving $2000 by paying up front. A good practice to get into is asking “How can I get this same quality & service cheaper?” And as I type this the boy from across the road is mowing my lawn for a nice sum of pocket money. I paid $120 the first (& last time) when I moved in. Now the boy, his parents and I are all happy.
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lesson 31: a stitch in time
With the fast pace of today’s world and goods being provided so cheaply, we often replace items with new ones, throwing the old ones into landfill. Sometimes the items aren’t even broken. For those who don’t remember the saying, placing one stitch now to repair your clothing saves you the time of doing 9 stitches in future.
Bringing this into today’s world, before replacing something, get at least two quotes to either repair or replace. If it takes you 2 hours to shop around (by internet & phone of course) and this saves you $100 using after tax dollars, that’s a gross saving of over $65 per hour. How does this compare to your hourly rate of income?
Remember to think of purchases in after tax dollars (eg a $10 pack of cigarettes may be costing you half an hour of work if your hourly rate after tax and superannuation / 401K deductions is $20 per hour). Now think abut the larger expenses (ie one fifth of your working week goes to paying the mortgage / home repayments if it is 20% of your income).
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lesson 30: Simple isn’t always easy
The biggest step we take in life is between knowing and doing. How did you go measuring your money going in and out? Found it hard to maintain? Hopefully not, but if so, associate the task with pleasure. Make it fun by playing your favourite music, grabbing your favourite food and assuming any position you like (hammock, couch, floor, bed).
You could reward yourself with a treat (foot massage at home, time off, extra hugs & kisses – this is where your partner gets involved and is the best bit). You should also set a specific time to do it (eg Money Mondays, Wealth Wednesdays or Finance Fridays). Do get yourself a support person and work towards a goal together. By being accountable and helping someone else, your task of managing money will become easier.
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lesson 29: You must measure in order to manage
You can’t manage your money if you’re not measuring what’s coming in and going out. So start with the measuring, then you’ll know how much managing is required. Record everything coming in and going out for a month (three months is preferable though).
Do this using a blank spreadsheet or table with categories down the side and week 1 to 4 or 12 across the top. Use pencil and add the amounts as you go. For example, if you spend $10 on takeaway one day followed by $20 two days later, just erase the $10 and make it $30. If done daily this process takes less than a TV ad break.
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lesson 28: All about ‘E’s
Apart from education and the economy (obvious connections with your wallet), how can caring for the ‘E’ word Environment help your financial fitness?
Well if you know that wasted food produces methane (a greenhouse gas considered much more damaging than carbon dioxide), you can save money and the planet by planning your weekly meals in advance. Of course you could also consume less product too (eg plastic bags, personal grooming products, whitegoods etc). By doing this you save the planet from landfill, by it not having to produce as much metal and plastic, and your wallet of course!
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lesson 27: There’s an election on down under!
So what does this have to do with money? Everything! From whether the leaders lead by example (think children following in parents footsteps) to wasting money on propaganda (think how money may be wasted around your home). Everything is relative. People think they NEED something when really it is a WANT. So how can we change?
Well the greatest change comes from within. Yes it can be hard but take responsibility for your thoughts, words, feelings and actions (as well as reactions). As Einstein said ‘You can’t solve problems with the ways of thinking that created them’. So start thinking differently about your money. For example, see it and treat it as a driver’s license…something small in size that gives you choice and freedom. Or draw similarities between good money management and your favourite hobby (eg having to be 360 degree aware just like riding a motorbike).
Just like an athlete in training your mental strength is your greatest asset!!
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lesson 26: Two weeks into it. What have you done?
Big deal. 2 weeks into the new Financial Year. There’s heaps of time before Christmas to make changes. Well, let me ask you what changes you’ve made in the last 6 months since last Christmas? It’s amazing how quickly time flies – just look at how fast children grow up or your 10 and 20 year school reunions come round! So don’t delay – do it today! Just spend 5 minutes putting pen to paper, working out your assets and liabilities.
One man I recently saw thought it was good that he had a nett worth of $20,000 equity when, before doing the numbers, he’d thought he’d be worse off. I didn’t mean to burst his bubble when I pointed out he’d been working for 20 years so really that’s a saving of less than $20 / week and a far cry from where he wants to go in the next 20 years. So how do your numbers stack up?
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lesson 25: Happy new Financial Year!!
For some reason the caps don’t come up in the title?? Anyway, with the new Financial year almost here, what new habits will you adopt? Look at where you were 12 months ago and where you are now. Look at where you want to be (JUST LIKE MOST PEOPLE DO). Then DON’T take massive action (LIKE MOST PEOPLE DO).
If you want to have what others do not (ie FINANCIAL FREEDOM) you need to do what others do not. If you want to have what others have, you have to do what they do. Choose your role models wisely, then take action!! Make phone calls, research on the net or adopt one of the many previously mentioned tips. Whatever you do, don’t let the next 12 months be like the last – there’s no growth in that 🙂