I woke up this morning with the urge to clean! No, I don’t mean the usual push the vacuum cleaner round; do a bit of dusting clean. I mean the empty the cupboards out, see what is lurking in the back of the pantry and have a good old decluttering session.
Maybe it has something to do with spring; the trees are just starting to blossom and the garden is coming back to life after winter. So the urge is there to get ready for summer. Or maybe I am just sick and tired of opening a cupboard and all this ‘stuff’ that I don’t use or need stares back at me and it is time to do something about it.
That got me thinking, we should also spring clean our finances on a regular basis as well. Have a look at all the automatic payments and direct debits that come out of your bank account.
Do you know what they are for?
Do you still want the service you are paying for?
It is also a good opportunity to review other expenses like your insurances, phone and power provider to see if there are any deals you could capitalise on.
What about your credit card? If you have a balance just sitting there that won’t go away, are there any options by changing credit card company that could help reduce the cost.
Don’t forget to look at your savings, when was the last time you increased your contribution to your savings plan? If you got rid of a couple of unused subscriptions, you could divert the money to savings instead.
Oh well, it’s back to the kitchen cupboards for me…..
If you would like some help decluttering your finances, feel free to drop us an email or give us a call
Wow, what an eye opener. I have just watched Nigel Latta: The new Have’s and Have Nots. What a powerful documentary about the changes in the New Zealand economy, the impact on families and the widening gap between the have’s and have nots.
I highly recommend that you watch the documentary, but if you can’t spare 44 minutes, then these are the key points that I picked up from it.
We have a new ‘class’ in New Zealand, The Working Poor. These are the families where both parents work full time, and still don’t have enough money to meet the day to day needs of their families.
If something goes wrong and they need to borrow money; say for car repairs or a family funeral that is out of town, they have no option but to borrow money. The banks won’t lend it to them, so they end up in the hands of the loan shops, who will happily lend them money at 10% interest. That didn’t sound too bad until it was clarified; that was 10% per week!! When you are desperate you tend to think in terms of immediate needs, and don’t calculate the longer term costs so the situation just keeps getting worse.
The statistics are scary. One in five families don’t have enough to live on. One in three families couldn’t survive more than two weeks if the main breadwinner lost their jobs. A staggering 55% would run out of money in four weeks. Continue reading →
A scary question isn’t it. I meet quite a number of people who don’t want to even think about retiring let alone thinking if they will have enough money when they finally do want to retire.
The answer to the question was the subject of a presentation at a network breakfast I attended. A certified financial planner used a case study to illustrate the point.
We probably all know this. We are living longer. But maybe we hadn’t quite connected the dots in terms of having enough money to retire on. It wasn’t that long ago that the life expectancy after retirement at age 65 was only 9 years. Now it can easily be 20 to 30 years, so the number of people potentially outliving their capital is going to be quite significant.
The website My Longevity has gathered data to help you work out your life expectancy based on your lifestyle rather than actuarial data. It is worth spending a few minutes to complete the questionnaire to see what your life expectancy could possibly be. I did mine and unless I get hit by a bus, I potentially will need my capital to last until I am 106!! I certainly don’t have enough to last that long. Continue reading →
Our bags are packed and we are all set to go. After months of waiting we are on our way to Sydney to attend Brendon Burchard’s Experts Academy.
We knew where we wanted to go, the date we were leaving and how we were going to get there; so planning for this trip was really quite easy.
Other times when we travel, we are more fluid. We have a departure date and a date we need to be home and what happens in the middle is totally flexible. So we decide what to do on a day to day basis.
Goal setting is like that, sometimes you have a short sharp goal that you just need to get stuck in and achieve. Maybe saving for that unexpected large dentist bill or setting up your emergency fund.
Your goal may go something like this “I want $1,000 in a savings account for emergencies in 90 days from today”. That ticks all the boxes in terms of being a clear, measurable and attainable goal.
But if you are 25 and you have a goal to have enough money to retire on when you are 65, you will need a bit more flexibility in your planning, by turning your large goal into smaller measurable and attainable chunks.
So, when you are setting your goals. Think like a travel agent
Where are you now?
Where do you want to go?
How are you going to get there?
When do you want to arrive?
We love to hear from you, so please leave us a comment or to learn more about our programmes, feel free to contact us.
We could ask Cristiano Roanaldo the World’s highest paid soccer player, he should know, that is what he reportedly earned last year.
Judging by the photos of him (and his girlfriend) in the media they certainly have the lifestyle and the toys that go with that level of income but I can’t help wondering if he is following the first few commandments of money management which are:
1. Spend less than you earn.
2. Know where you money goes.
3. Pay yourself first.
You see it doesn’t matter if you earn $44 million or $44,000 you still need to follow the basic commandments as you never know what is around the corner.
The other commandment for those that suddenly acquire wealth or haven’t been used to a high level of income is,
Get good advice!!
Good advisers not only include accountants, lawyers and financial planners, but also money mentors. Change is rarely about the numbers (the math) otherwise it would be simple, but emotions cloud money issues. Money mentors can help you understand your money mindset so you can deal with the changes in your life.
Anyway, back to Ronaldo, he has an amazing sporting talent, let’s hope he has the right people around him to make sure he is investing wisely for the future, whilst enjoying the fruits of his labour at the same time.
If you aren’t getting the results you want in an area of your life, take a look at your behaviours. Are they helping you or hindering you? If you are up for the challenge take a step further back and examine the underlying belief that is generating the behaviour.
If you really want to make changes in your life, this is a very important equation to learn and more importantly, to implement.
My clients challenge me on this and ask, “Why should I examine my beliefs? I just want to spend less/save more.”
A belief is an assumed truth that we then make our reality; our beliefs become self fulfilling prophecies. So if life is going well for us then our beliefs are working and we don’t need or want to examine them; we may not even be aware of what the underlying belief is.
Let’s look at an example. I have a belief that exercise is good for me. So even though it occasionally causes me physical pain (particularly after a personal training session), I don’t question or challenge my belief because I know I have more energy on the days that I exercise and I know my health is much better than my pre-exercise days. My belief is working for me. Continue reading →
Our beliefs, or our view of the world starts with our early childhood memories. We learn from our parents, our environment and form our own beliefs from those observations. So what are your earliest memory’s of money? How do you think that has impacted on how you relate to money now in your adult life?
My earliest memories of money revolve around the word ‘No’. No I couldn’t have the umbrella with the pink frill; the must have winter fashion accessory for a 4 year old. No, I couldn’t have a Barbie doll, they were too expensive, so I got the imitation one instead.
My parents were (and still are) very careful with their money, they were quite frugal in day to day expenditure but that meant that there was money set aside for our holidays and should any emergency crop up.
Their goal was to be mortgage free, as they hated any sort of debt and over the years they achieved that goal.
As I discovered when chatting to a group of parents about pocket money, the topic can get quite emotive and there are lots of different views about how much, when to start and whether or not to ‘pay ‘children to do chores.
Everyone in the group gave their children pocket but the amount was the tricky part. It seemed to be linked more to peer pressure about what everyone else was getting, rather than what the parents thought was appropriate.
This story from one Mum really highlighted the children’s understanding of the value of money. “It was Xmas and the kids got an envelope with $20 in it from their aunt. The 11 year old got mildly excited about $20. The 7 year old thought it was a lot of money and the three year old wondered why his aunt had given him a pretty picture”. Continue reading →
Throwing good money after bad or the ‘Sunk Cost Fallacy’ is another form of overspending that we can slip into without realising. It could be the house renovation that becomes the never ending money pit and deep down we know we will never recover these costs when the house is sold.
Sunk Costs are everywhere and they don’t occur only in your finances or business. Have you sat through a really bad movie thinking “oh well, I’ve watched an hour so I may as well watch the rest”. Gottcha!! You have just succumbed to a Sunk Cost.
“In for a penny, in for a pound” my Dad would say, as we headed to the local eat-all-you-want buffet restaurant for a family dinner. “I’ve paid my $25.00 (ok, this was a little while ago), so I am going to get my money’s worth and eat as much as I can”. Over the course of the next couple of hours he was true to his word!
So what is the Sunk Cost Fallacy? Well, in a nutshell: we keep making decisions (monetary or otherwise) based on how much we have already spent on a project. It’s hard to let go of something that is going backwards, or not complete an expensive project even though the cost of continuing just isn’t logical. Continue reading →
I bet you didn’t know you were an author did you. Whether you recognise it or not we all tell ourselves stories to justify and rationalise our spending. Some of those stories are short blogs, and others are full length novels!
What do I mean by justifying and rationalising our spending? I looked up the Merriam-Webster dictionary to see what they had to say about it and this is the definition of justify, “To provide good reason for the actions of [someone].”
Interesting. What about rationalise? “To think about or describe something (such as bad behaviour) in a way that explains it and makes it seem proper, more attractive etc.”
I probably don’t need to add much more as those two definitions really sum it up. But I am going to.
We were at a dinner party recently, and the usual question of “what do you do” came up. Generally one of two things happens when I say I am a money mentor. The person suddenly has to go and talk to someone else (the same thing happened when I used to say I was an accountant). Or I get chapter and verse about how good (or bad) they are with money. Continue reading →