financial goals

Using a Quarterly Review to Stop Feeling Perpetually Behind the Curve

February 26, 2021 By Kathryn Vercillo Leave a Comment

I have felt behind the curve in work (and life) for … well, let’s just say for a long time now. I encountered a series of health challenges that set me back. That snowballed into some financial challenges. After that came COVID-19 which required new adjustments. And now it seems like almost a way of life: always feeling like I am several steps behind what I want to be doing to move forward. I’m hoping that a new quarterly review process will help me get back on track. Maybe, if I really work at implementing it, it’ll even help me to get ahead!

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How I Already Use a Quarterly Review

The quarterly review isn’t entirely new to me. I’ve worked for myself for a long time. Therefore, I’ve established a variety of different work and personal finance routines that work for me. Historically I’ve done a quarterly review of all finances. Actually, I do an end-of-month review, but then at the end of each quarter I go into more depth with that.

So, at the end of each quarter, I review:

How much I’ve earned and where it’s coming from
Total debt including interest rates and repayment amounts
Debt-reduction opportunities including balance transfers
Breakdown of where all money is going (budget review)

Honestly, I’ve dropped the ball on this in the past year. 2020 was rough for many reasons. Therefore, I need to go back and do my 2020 financials. As a result, my 2021 financials started off with less review than usual as well. However, we’re only two months in, and I can get back on track. Part of the benefit of the quarterly review is that it prevents me from slipping too far behind. So by March 31, 2021, I will have this routine back in place.

New Ideas to Benefit from a Quarterly Review

I want to stop feeling perpetually behind. I’ve been behind on deadlines for a long time now, which isn’t like me. But more than that, I’m behind on the projects and ideas that I personally want to establish. I’m hoping a quarterly review will help me feel like I’m catching up.

Here’s how I imagine this going:

The first two months of every quarter will be for planning, starting new activities, and promoting my work
The third month of every quarter will be for catching up, review, and rest

So, for example, I’ve spent a lot of time in January and February trying to plan out the year. I’ve started a bunch of new projects – or at least the initial stages of them. If I kept that up the whole year, I’d always feel behind. Instead, I’m going to take March to assess and make progress on what I’ve done in January and February. Instead of starting new things or committing to new deadlines, I’ll just catch up and get organized. Then in April and May, I’ll resume planning, spreading the word, looking for new projects, etc.

My hope is that having a stop-gap every third month to just catch up will actually assist me in moving forward.

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10 Common Money Mistakes You Can Avoid

June 10, 2016 By Amanda Blankenship 1 Comment

Money management can be difficult. People often make mistakes when trying to handle their money. Common money errors can prevent making progress on long-term financial goals and can often set a person back. The common of these mistakes can be avoided though.

By changing just a few habits, you can change your entire financial stance. You can cut bills, have better cashflow and even boost your investments. All of that sounds really exciting, but you will have to make a few changes before you can reach that level of success. Take a look at these 10 tips to help you avoid making some huge money mistakes:

Take the right risks. When it comes to your finances, a certain amount of risk is present (especially if you’re dealing in the stock market). You may panic at some point in the beginning when you see the apparent risk. If you don’t handle these correctly, taking a risk can ruin your financial stance in the world. Before you take any huge risks, make sure you understand what could happen if it goes wrong as well as what it will take to fix it if it does.

Set your goals. Sometimes life gets in the way but you should always have an end game. For some the goal may be to quit their 9 to 5 job. To do this, you would have to secure a significant source of passive income or a more flexible job. Others may have a goal of saving, say, $2,000 by the end of summer. They would have to adjust their spending. Without these goals, there would be no reason for change or to push towards something more. Always have a goal and keep your eyes on the prize.

Set reachable goals. According to The Hip Pocket, many people make the mistake of aiming for goals that are simply impossible to reach. You must decide what it important to you financially, set goals and then figure out what you must do to reach those goals. Assess your ability to do those things and set a reasonable time frame. If you do not have a good idea of what is doable, you’ll wind up setting yourself back.

Take time to learn. When approaching big money decisions, learn as much as you possibly can about what you are about to do. For instance, if you are about to put a substantial amount of money into the stock market, you would want to research the company (or companies) you are putting your money into. If you do not know enough, you will not be able to assess the risk nor will you be able to set obtainable goals.

Don’t make it hard. Saving money and managing it is hard enough without you making it even harder for yourself by manually transferring funds or taking cash out and putting it aside. Instead of doing things manually, you can set up direct deposits and automatic transfers. In addition to this, many investment apps also allow you to make automatic deposits into your investment account each month as well. You can save yourself a lot of trouble by automating your financial decisions.

Set a budget. This is a pretty basic step but you would be surprised by the number of people that do not have budgets. Time reported that 82 percent of Americans don’t keep a budget. This sets many people back from financial wellness. Without a budget, you won’t likely be able to reach your financial goals.

Don’t spend for rewards. People with credit cards that have cash back rewards or other rewards often spend simply to get the reward, thinking they are saving money by receiving the cash back. This simply is not true unless you are using a credit card hack like these. You are still spending unnecessary money and spending outside of your budget.

Stop accepting fees. Banks, credit card companies and other financial institutions have a lot of fees that you can avoid. For instance, many people simply accept ATM fees by using out-of-network ATM machines. If you plan on taking money out, you can plan ahead to get cash from your bank’s ATM and avoid the additional $4+ in ATM fees.

Have an emergency fund. Emergency funds are extremely important! A recent report showed that most Americans do not have enough money to cover a $1,000 emergency. Without this money set aside, many people go into debt trying to pay for car repairs, medical bills and other emergencies that simply happen.

Don’t try to do it on your own. You can seek financial counseling. Many people seek this type of counseling so that they are able to open a loan, buy a house or if they have met financial hardship. However, you do not need to wait until you NEED some financial counseling to get it. Consulting with a professional about your finances is never a bad idea. Once you share your goals with them, they can help you reach success. Never be afraid to ask for some guidance.

Do you have any tips on how to avoid common money mistakes? Let us know.

Photo: Flickr: 401(K) 2012

5 Ways To Save (And Earn) Even More In 2016

March 1, 2016 By Jennifer Clark 1 Comment

The popular phrases “time is money” and “it’s not what you earn, it’s what you save” offer valid points and is sound advice. However, if you don’t put in the time, you may not make the money, and if you aren’t earning enough, it can be really hard to save. What’s worse is putting in the time and still barely breaking even. Are we hitting the nail on the head? Is this a constant battle for you?

When you’re living paycheck to paycheck, saving can seem impossible. Luckily, we’re here to help. Below are five ways to save (and earn) even more in 2016:

Start at the bank account. Evaluate your monthly spending. It’s amazing when you take a deeper look at your monthly expenses how much you’ll find you spend on miscellaneous things like coffee or dining out. It may not seem like it, but these are both luxuries. Place a limit on how much you spend on these activities each month. If you make a goal to not spend more than $30 on dining out a month, but you instead spend $50, reduce your budget for the following month. Conversely, if you don’t spend your dining out budget for a couple months, take that amount to splurge on yourself one month. You could also use what you don’t spend on your budget to increase your savings account.
Skip the extreme couponing. After all, as we reminded you above, time is money, and this type of discount searching can absorb a lot of time in order to reap a benefit. Instead, use that time for other activities such as spending time with family (priceless) or researching smarter ways to invest your money (also priceless with the potential to gain). This is not to say utilizing a coupon or two will not help decrease costs; just know there are other ways to save while grocery shopping.
Adjust your spending choices. What financial goals do you have for yourself this year? If the answer is none, it may be time to make some for yourself. Examples include wanting to save more money, finding a profitable investment, earn more money, etc. Whatever the goal, be as specific as possible. A rule of thumb is to save 20% of your income. So, if you bring in $1,800 in a month, $360 should go into savings. If this seems impossible (and by following rule number one, you may find that it’s actually quite feasible) shoot for 10% and increase by 1% each month. Regardless, at the beginning of every month, fund your reserve accounts after paying your bills so that you can have a little more financial freedom in the following weeks.
Pay off your debt. Investing does not have to be in stock; you can also put money toward your debt, and in fact, you should work on paying off your debt first. If financial freedom is your ultimate goal, monetary obligations will always hold you back. Obviously, the more you earn, the more you can close out these bills. Earning more, however, is the ultimate challenge. But, in today’s world, it is easier now more than ever to make a side income, whether it’s through Uber or Lyft, selling on Ebay or, yes, even blogging, the possibilities are seemingly endless. As you earn more, though, save more so that you can reach those economic ambitions much sooner.
Choose investments that will pay you back. If you’re contemplating purchasing rental property as a means to make a secondary profit, know the costs such as insurance, maintenance and taxes prior to going in. Also know that your time may be an investment as well. Increasing the rent will not solve your problems; increasing your knowledge will.

The ultimate goal is to improve your net worth, and through these efforts, you can accomplish this. Decreasing your debt, starting a retirement account and feeding your savings account are all important to do. You will need to work smarter, hustle and research; but with consistency, you can pull yourself out of financial worry faster than expected.

Photo: Flickr: Pictures of Money

Small Changes That Will Make a Big Difference to Your Wallet

February 23, 2016 By Amanda Blankenship 1 Comment

You have probably heard about people making small changes that changed their entire lives. Whether it be cutting your grocery bill down by switching to a cheaper store or getting rid of cable and saving the cash every month, there are a lot of little habits you can change to make a difference in your financial life.

Saving money can be extremely hard, however, if you are having difficulty, you can take a few steps to make it a little easier on yourself. Some of the ways to save more money is to simply cut your bad habits.

Stop Wasting Time

If you get into the habit of simply doing something when you say you are going to do it, it can really help with your financial goals. If you keep saying that you want to stop buying groceries from the more expensive (but more convenient) supermarket, why keep putting it off? If you say that you want to stay in more and spend less, why put it off any longer? When you continually put these things you’ve been wanting to do off, you can really put a harmful dent in your long-term financial goals.

Spend Time Not Spending

Instead of spending time doing things that will make you spend more money, why not spend your time doing things that cost no money at all (or help you save money). There are plenty of free days at national parks, you can go to the public library or even look up cheap arts and crafts on Pinterest to pass the time. Of course, no one wants to sit at home and do nothing, but you don’t have to spend a ton of money.

Cut Down Your Activities

Sometimes you like doing an activity for fun. However, that activity is not always a great way to save money. Everyone has something they like to do, but when you stop to think about it, if you participate in the activities you really like all the time, they become less special. Many of these activities also hold very little long term value, so you aren’t getting much from it. If you are participating in something that you enjoy, maybe just dial it down (or cut it out if it is something you can really do without). It can help you save a ton of money.

Find Ways to Make Extra Money

This is another way to change the way you spend your time. If you spend some of your extra time working a second job, blogging for cash or even babysitting, you can earn some extra money. During the time that you are earning extra income, you won’t be out spending money. This is like a win-win for your wallet and your savings goals.

Small Changes Make a Big Difference

Even the smallest of changes, like the ones mentioned can have a huge impact on your life (and especially your wallet). It will take some time to form new habits, but it will be well worth it in the end. Saving money can be hard, but once you get into the swing of things, it can really change your life.

Photo: Flickr: 401(K) 2012

Join the 52 Week Make Money Challenge for 2014

December 31, 2013 By Jeffrey Strain 3 Comments

While talking with some friends who attempted the 52 week money challenge last year, it became apparent that a lot of them had frustration because they didn’t feel that there were many areas in their budget where they could save. They had already cut back as much as possible, and there simply wasn’t anyplace for them to squeeze out a little more savings to fund their challenge account. It soon became apparent that what they needed was a money making challenge. That is, a challenge where they could make small amounts of money during their free time each week not associated with their current earnings, so that they had the money to fund the challenge account.

Thus, the creation of the 52 week make money challenge came about. The concept is the same as the 52 week save money challenge, but the goal is to find ways to make money each week to add to the challenge total instead of ways to save. While I think most people would combine the two (looking for ways to both make and save money to fund their account), it’s beneficial for me to split these two up in this instance. Like many things in life, some people prefer to save, while others prefer to make money to fund their accounts. Participating in both a money making and money saving challenge will allow those to follow the challenge that best fits their interest. Of course, following both is also perfectly acceptable for those who are looking for ways to both make and save money.

For this challenge, I’m going to use the alternative method (click on the image for a pdf file to print out).

52 Week Money Making Challenge(Blank)-pd

I’m sure that the amount of money I make each week will fluctuate quite a bit over the course of the year. I will shoot for making the highest amount on my chart each week, but I realize that there will be weeks where I will be crossing off a lesser amount. This will give me the needed flexibility to try new and different ways to make a little extra over the course of the year.

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I plan to use the variety method for the challenge. I hope through the course of the year to look at a wide range of different ways to possibly make a little bit extra here and there. It’ll also be a year to experiment and to try a number of ways to make money that I’ve never tried in the past. While some of the ways I try may apply to you, others probably won’t. My hope is that by trying a different range of ways to make money, you’ll find some that you can adopt for your own challenge. I also hope that even those that won’t work for you will at least get your creativity flowing so you might be inspired to come up with your own version that does work.

I plan to take the challenge a step further than simply telling you how much I made each week and from what source. I also plan to explain the details about how I went about making it possible. This way, if you do see something that you think you would like to try, you can learn from my successes and mistakes, which should give you an even better opportunity to make money. In the same way, I hope to hear from those following the challenge on how I might be able to improve what I’m doing to create even more income.

As with most challenges, it helps to have a support group to stay motivated and inspired as the year goes by. There is a small, but growing, area in the forums that is devoted to ideas on how to make extra money. I hope to use it as a resource to come up with new ideas. If you decide to do the challenge, it should be a good resource for you as well.

If this challenge sounds even a little bit appealing, I highly encourage you to give it a try. It’s truly amazing how it’s possible to build a nice little side income doing small things here and there to increase the amount you make. Even better, at the end of the year you’ll have an account with nearly $1,400 in it. If you end up creating a habit, the amount of money you earn going forward should only increase in the years that follow.

Articles that are related to this challenge:

The 52 Week Make Money Challenge
Make Money Challenge Preparations
Week One Results
Week Two Results
Week Three Results
Week Four Results

(Photo courtesy of 401(k))

25 Ways to Discover and Reach Your Financial Goals

October 9, 2013 By Guest Writer 1 Comment

By Kimberly Foss, CFP, FCWA, and author of Wealthy by Design: A Five Step Plan for Financial Security.

A friend of mine recently shared the story of an unsettling trip to the supermarket. Her husband was out of town and their three kids were off in different directions for the summer evening. They’d just returned from vacation, so the kitchen was bare. She went to the neighborhood grocery store, figuring to pick up something to prepare for herself for dinner and leave the major fill-the-fridge shopping trip for the next day. She found herself wandering the aisles, unsure of what to buy. What she realized in the grocery store was that normally she’s so focused on buying what her husband and children like to eat, that it was initially difficult to shop for her own dinner.

I see that a lot when I meet with clients to discuss their financial goals. Folks get so locked into their day-to-day financial responsibilities and providing for their families that they fail to dream and set personal goals. In fact, the advice I would have offered to my friend to help her plan her meal is strikingly similar to how I counsel clients to help them set and achieve financial goals. You start by thinking about what you what you enjoy, factor in what’s healthy (watch out for market risk) and make sure that you put a well-balanced meal (a diversified portfolio) on the table. More specifically, I encourage my clients to:

List your goals

In our first meeting, I ask clients about their dreams and prefer that they not preface a goal with a disclaimer like, “I know I’ll never be able to afford this, but…” It’s important to dream – and to write those dreams down! In fact, studies show people make greater progress toward their goals when they take the time to record them. I can only imagine that actually discussing one’s goals increases the chances of success.

Pen an investment plan

It’s also beneficial to put your investment goals, asset allocation, and the risk you are comfortable shouldering in writing. That way, if the market takes a nose dive, you have a long-term plan that can provide the assurance you need to stay the course you’ve set for yourself.

Separate needs from wants

Prioritizing spending involves a give and take between needs and wants. It’s easy to attack a budget and eliminate the true fluff – magazines you just recycle or the gym membership you haven’t used in a year. When your budget cutting gets more difficult, it can help to consider the expense in question in terms of the cost of one of your fixed expenses. For example, let’s say college costs you $40,000 a year and you are debating spending $4,000 on a vacation. Viewing those potential vacation funds as 10% of your college expenses can help you make up your mind whether your trip is a true need or a mere want.

Check in with your spouse

Do you talk with your spouse about your long-term goals? Surprisingly, a May 2011 study by Fidelity Investments found Baby Boomers, caught up in the day-to-day pressures of work and family, tend to avoid talking with their spouse about the future. If you fail to connect with your spouse on a routine basis, you may find yourself at odds about when to retire. In fact, 62% of respondents in the Fidelity study disagreed on the timing of their retirements.

Carefully consider risk

How much risk are you are willing to take in exchange for the potential to earn higher returns? Given that the recent market downturn moved risk out of the theoretical realm, you might feel like it’s time to dial down the risk in your portfolio. Or you could feel like you weathered the storm well and are ready to take on additional risk.

Improve your decision-making

Job one in making more rational decisions? Harness your emotional reactions to the ebb and flow of the markets. That means not being gripped by fear in a bear market or driven by greed in a bull market, but maintaining the poise necessary to make rational choices.

Understand that big decisions benefit from the big picture

If you’re debating a big step like buying a second home or retiring early, it’s important that you have a complete picture of your assets and liabilities. Frankly, many clients have rollover IRAs, other investment accounts or property that they do not pay their advisor to manage. That’s fine. But when it comes to major financial moves, it greatly behooves you to put all your cards on the table because there may be risks or opportunities you have not considered.

Make changes slowly

Just as a doctor would advise an inactive person to begin an exercise program slowly, you don’t want to make sweeping financial changes – no matter how good they’ll be for you – immediately. In fact, University of Chicago’s Professor Richard Thaler finds that we are more likely to accept the need to change our behavior when we plan to implement the change in the future. So, open your calendar and schedule a few of these tips. And remember, a series of small steps can equal a giant beneficial leap.

Spend time with your family and loved ones

After all, that’s where you get the motivation to dream – and the strength to make good decisions. Many people focus on the inheritance they will leave their children, without realizing that children most cherish memories of the time they shared with their parents. So think about embarking on a multi-generation vacation or plan a family reunion.

Stay current with an annual review

Your life can change significantly over the course of a year. Maybe you got married or divorced, had a child or grandchild, changed jobs or health plans, finished paying for college or started your own business, bought a second home or retired. Some of these changes could require that you adjust your investment plan.

There’s no doubt that working hard and finally achieving your goals enhances your ability to set and meet future goals. For that reason, any discussion on how to discover your goals requires guidance on how to reach your goals. Here are some tips I share with clients to ensure they cultivate their power to dream and continually set and achieve new goals.

Determine your net-worth

List all your assets and liabilities. You should repeat this exercise every year. It’s important to see your wealth accumulate, but it’s also gratifying to achieve some of your short-term goals.

Try to save at least 10 percent of your annual income

It all begins with your workplace’s retirement plan. If you’re lucky enough to work for a company that offers a matching contribution, make sure to contribute enough to qualify. That free money can really give your savings a boost.

Maximize your pretax savings

Contributing to a pretax savings plan like a 401(k) or 403(b) reduces the current year’s taxable income and delivers tax-deferred growth. If you receive a raise, consider increasing your contribution to your retirement savings plan. If you change jobs, rollover your 401(k). Don’t cash it out.

Diversify your assets

It’s a cliche, but here’s the most valuable piece of investment advice I know: “Don’t put all your eggs in one basket.” Your risk tolerance and your investment goals will determine how many baskets carry your eggs and how many eggs you put in each basket. However, by investing in domestic and international stocks, a variety of bonds, and cash – asset classes that react differently to market events – you structure a portfolio where, if one investment declines, others will rise, hopefully enough to offset the loss.

Keep your eye on the long-term

Successful investing requires patience and the ability to stomach market volatility. If you are saving for a retirement that’s decades in the future, it doesn’t make sense to check your portfolio every day, provided you’ve built it to last with a sensible diversified allocation. Also, overtrading your portfolio based on short-term market movements can result in excessive trading costs that can really diminish returns.

Routinely rebalance

Periodic rebalancing forces you to do the counter-intuitive – sell your winners and buy more of your losers. Interestingly, numerous studies have shown that individual investors tend to earn less than market returns because they hang on too long or sell too early. Sticking to a rebalancing schedule takes your emotions out of the trades.

See how far you can stretch your money

After you’ve funded your fixed expenses such as the mortgage, see just how frugal you can be. For one week out of the month, try an experiment: walk by Starbucks, pack your lunch, and stay in for a weekend movie night or pot luck dinner. You’ll be surprised how much you’ll save. And the extra cash in your pocket may motivate you to save more!

Take your credit card out of circulation

That’s right, leave it at home so you won’t be tempted. It’s this simple: If you can’t pay cash for it, you can’t afford it — no ifs, ands, or buts about it. Importantly, if you create an emergency fund of three to six months of living expenses invested in liquid accounts, you won’t need to pull out your credit card for an unexpected expense like a car or roof repair.

Review your progress

Think of the old trick of saving coins in a jar. Being able to see progress toward a savings goal can inspire you to save more. So, review your retirement and investment accounts regularly. You may even want to contact Social Security to get an estimate of your benefits so you can map out what your retirement income stream will look like.

Work with a fiduciary

Unlike the legal and medical professions that require specific degrees and extensive exams, anyone can call himself or herself an investment advisor. However, consumers often mistakenly assume that there are professional standards and that the advice they receive will always be in their best interests. In reality, only professionals registered as investment advisors with the Federal Securities and Exchange Commission (SEC) or comparable state regulators operate as fiduciaries under a legal obligation to put their clients’ interests first.

Calculate your entire net worth annually

In addition to checking your portfolio’s returns, include other assets such as legacy stocks and real estate in your review. This exercise gives you the perspective you need to make good investment decisions. It also minimizes the pressure you may feel for every investment in your portfolio to beat the market. That is, even if some investments under-perform, your real estate holdings may be up.

Update your insurance

Dig into your policies. The fine print matters. Homeowners insurance usually covers wind and fire damage, but you’ll need separate flood coverage if that’s a concern. Also, re-estimate the value of your household goods. Low policy limits may mean you need to insure your jewelry separately. Finally, look for opportunities to cut premiums by consolidating policies with one insurance company.

Check your credit report

Take the time to request a free credit report each year from Equifax, Experian, and TransUnion, the three main credit reporting companies. You can get the free report at AnnualCreditReport.com which is the official site set up by the Federal Trade Commission. Monitoring your credit report is a crucial step in protecting yourself from identity theft.

Disaster-proof your financial records

The recent Colorado floods should prompt us to ask: “Am I prepared to get out of my home quickly?” To that end, put copies of all your important papers including your will, passport, mortgage and financial statements, car titles, birth certificates, and other personal records in a bag that you can grab quickly. You’ll also want to include some cash and any necessary medications.

Consider your estate plan

The new $5 million exception has made trusts less essential, but estate planning is still important. Apart for your finances, it’s important to name a medical advocate, someone to make medical decisions in the event you can’t make them. Also, in addition to your will, prepare a letter of instruction to provide your family and executor with the location of assets and financial records as well as contact information for your professional advisors.

Working with a trusted advisor who is a fiduciary can help you to discover your goals and develop a flexible game plan to reach them. Your advisor also will help you to monitor your progress toward your goals and adjust your goals to reflect any changes in your life.

Kimberly Foss (CFP, CPWA) has spent 30 years helping people grow their wealth with solid investment advice. She currently runs Empyrion Wealth Management Inc. as the president and founder of the company. She also takes her wealth management advice and insights on the road as a popular speaker. Her new book, Wealthy by Design, is currently available for purchase.