self improvement

10 Common Financial Blunders

September 11, 2013 By Jeffrey Strain 7 Comments

There are plenty of steps that you can take to help you become financially successful, but all your hard work will end up being for nothing if you’re undermining the financial success you’re seeking to attain. The financial steps to success are important, but understanding the actions that’ll ensure financial failure are just as important. It usually only takes a single financial blunder to wipe out much, if not most, of the financial progress you’ve made. Here are ten of these blunders that you want to avoid or resolve as soon as possible to ensure the long-term health of your finances.

Spend More Than You Make

This is the foundation of all personal finance. If you can’t live within your means, you’re going to find yourself in financial trouble no matter how much money you make. While you may be able to get way with spending more than you make for a while, it’ll eventually catch up with you. At some point you’ll have to make up the difference and when that point arrives, your finances will not be happy.

Live Paycheck to Paycheck

While living paycheck to paycheck may seem better than living beyond your means, it still ensures failure in trying to meet your financial goals. Again, this applies no matter how much you make. Paycheck to paycheck living fails to take into account unexpected expenses that are a part of life. While you may be able to pull off the paycheck to paycheck game for a while, it’ll only be a matter of time that something unexpected puts you into debt which is a difficult hole from which to escape.

Trying to Keep up with the Joneses

The Joneses aren’t who you are competing against. In fact, what they’re doing and buying likely has very little to do with your own financial goals. The reason that what the Joneses are doing may look appealing is because you have failed to understand your own financial goals. By adopting the goals of the Joneses (who may not know their true financial goals because they may be trying to keep up with the Smiths) instead of figuring out what financial goals are truly important to you, you’ve guaranteed that you will never reach them. Forget the Joneses and take the time to figure out what’s important to you.

Not Knowing Your Financial Goals

If you don’t know where you’re driving, the chances of you getting there are slim. The same holds true with your finances. To succeed, you need to know where you want to be financially. The way to achieve that is by knowing what they are and then creating a map to reach them. Not knowing your financial goals is like wanting to get to a vacation spot using a blank map.

Letting Money Control You

It’s not about how much you make, but if you make enough to do the things that are most important to you. Money is a means to an end, not the end itself (after all, it’s nothing more than pieces of paper printed with ink). Financial success isn’t dependent on how much you have, but rather whether you can you attain what’s important to you with the amount you have.

Failing to Improve Yourself

Your education doesn’t end when you graduate from school. If you’re unwilling to improve yourself, you and your finances will stagnate. Improving yourself is a never-ending process (who do you know that is perfect?) and it’s an essential part of keeping your long-term financial well-being.

Relying on Others to Take Care of Your Money

Rarely do those who take care of your money have the same interest in what ultimately happens to your money as you do (they’re probably more focused on making money for themselves, not for you). While it’s perfectly acceptable to rely on others to give you suggestions and help you think through financial decisions, you should always be an integral part of the decision process. If you rely on others to take care of all your financial interests without you having any oversight, you shouldn’t be surprised when money is invested and lost in ways that you may have never allowed had you known.

Invest in Things You Don’t Understand

If you’re goal is to quickly lose the hard earn money you’ve made and start from square one again (or even in the hole), start investing in things you have no idea about. The problem isn’t that the investments are bad in themselves, but most investments have risks and the only way to evaluate them is to understand the investment. When you have no clue what you’re doing, that usually means that others who do have a clue will make money at your expense. No matter how much uncle Joe talks about what a great investment it is, place your money elsewhere until you are confident you understand everything about it.

Being Financially Afraid

Just as being to aggressive can ensure financial failure, being afraid to take any risk at all will also almost always ensure it. To grow your money to meet your goals means taking calculated risks that bode in your favor over time. Not doing so will result in your finances treading water, if not sinking, and falling short of your goals.

Ignoring Your Finances

It seems that many people believe if they simply ignore their finances, then things will get better or somehow take care of themselves. While it’s a nice hope, it’s nothing more than a fantasy. Reality says that ignoring your finances will lead to all types of trouble that ultimately ensure you fail to reach your financial goals.

These are some of the more common blunders that people make that end up hurting their finances. By avoiding these financially destructive steps, you’ll greatly increase the odds that you’ll meet your long-term financial goals.

(Photo courtesy of Nick Allen)

Rewarding Yourself Without Breaking Your Budget

April 3, 2013 By Jennifer Derrick 5 Comments

We all feel the need to reward ourselves sometimes. Maybe we reach a tough goal such as losing fifty pounds, or we accomplish a significant milestone on the way to a larger goal, such as finishing the novel that must now be sent out to agents and publishers. Whatever the reason, rewards can give us something to strive for and keep us going when we’d rather not.

The trick is to not let all this rewarding of ourselves sink our budgets. The best way to do this is to find rewards that are motivating to you, but which are also free or inexpensive. I’ve presented some ideas below.

Stickers

Yes, they can work for adults. The idea is that you put a sticker on your calendar every day that you do something to work toward your goal. So, for example, every day that you exercise, you get a sticker. The idea behind this is that once you get a streak of stickers going you won’t want to break the streak, so you’ll keep working to earn stickers.

Small grooming products

This one is more for women than men, but something small like a new nail polish, lipstick, hair accessory, loofah sponge, or other beauty product can be inexpensive and motivating.

Money

No, you don’t spend it, you save it. If, for example, you’re trying to give up smoking, you can figure up the cost of each cigarette and put that amount into a piggy bank every time you pass up a cigarette. You can use this saved money to buy your ultimate reward or do something else.

A song download

At around $1.00 apiece, a new song is cheap.

A new app

If you want a new app for your phone or tablet, make this your reward. Most are inexpensive and some will help you save money while others will help you make money.

A trip to a local museum

Many are free or very low cost and can make for a fun afternoon out. There are plenty of ways to save money when going to the museum.

A book

Whether it’s an ebook or paper book, a book you’ve been meaning to read is an inexpensive reward. If it does double duty (such as a low fat cookbook if you’re trying to lose weight) so much the better.

A plant/flowers

Something pretty for your home or lawn is always inspiring.

A DVD

If there’s a movie you’ve been wanting to see, buying the DVD can be cheaper than seeing it in the theater. If you’re trying to lose weight, a new workout DVD can be motivating. If you can score a used copy or find a sale, this reward gets even cheaper.

An afternoon with a friend

In our busy lives, it’s sad to say that an afternoon spent with a friend might qualify as a reward, but if you’re constantly pushing yourself and always on the go, taking an afternoon to hang out with a friend can be motivating. And free.

A day trip

Pick a local park, zoo, or lake and spend the day there. Pack your own lunch to make it cost even less.

Magazines

Pick one you’d never normally buy but are dying to read, or buy an old favorite that you don’t read anymore.

Home spa day

You can buy your own beauty products at the drug store and set yourself up for a nice facial, pedicure, and manicure for a fraction of what it would cost at the spa.

Crafting material

If you’re a crafting addict, only allow yourself to buy new supplies when you reach a certain goal or milestone.

Me time

Take an afternoon just for yourself. Send the kids to grandma’s and your spouse to a friends’ house for the afternoon and spend the afternoon reading, soaking in the tub, watching sports, going for a walk, or whatever else you want to do.

Food

As long as your goal isn’t weight loss, treat yourself to some guilty pleasure food that you never allow yourself to have otherwise.

Fun office supplies

If you’re an office supply dork like me, fun pens, tape dispensers, or notepads make good rewards.

A class

Continuing education classes are relatively inexpensive in most areas and you may be able to find some free offerings. Pick something fun you’ve been wanting to learn and sign up.

Happy hour

Maybe your local watering hole has a night with $5 margaritas, or $2 beer. Go, take a friend or your significant other, buy the one drink, and enjoy the atmosphere.

Something for your hobby

If you have a hobby, buy a new supply or something to add to your collection.

Something small and new

Maybe you want a new kitchen utensil, or a new cup for the bathroom. Maybe you see a new towel you love, or a small piece of yard art. Use your rewards to spruce up your house or lawn.

Something fun

Go to the dollar store, or someplace like Five Below and just pick out something that makes you smile, whether you need it or not.

The other way to keep your rewards in line with your budget is to set and adhere to reward levels that match the level of accomplishment. For example, if your overall goal is to lose fifty pounds and you’ve lost ten, you might want to reward that accomplishment with something, but not something as grand as what you will reward yourself with when you reach your overall goals.

If you consistently give yourself big rewards for even small accomplishments, not only will you spend more money, you’ll also reduce the effectiveness of striving for that, “big” thing that you’ll get at the end of the journey. If every reward is big and showy, what’s the point of finishing the journey? Doling out smaller rewards along the way is a better way to stay motivated.

Your rewards for finally reaching your goal are likely to be bigger, and rightly so. You may treat yourself to that spa day, buy new clothes to celebrate weight loss, take a vacation to celebrate getting that book published, or buy yourself a small piece of jewelry or an electronic item. Some people go even bigger and buy things like cars or motorcycles. Just make sure that whatever reward you choose fits into your budget. Noting stinks more than getting to your ultimate goal and not being able to get the reward you’ve been dreaming of for months or years.

Finally, as you’re working on your goals, keep saving money for your rewards. Most goals take a while to achieve so you have time to save up for that vacation or piece of jewelry or iPad if that’s what you want for your ultimate reward. Watching the money grow in your account can keep you motivated to reach your other goal, as well. As your account balance grows and you get closer to affording that great reward, you may be more inspired to lose that weight or give up smoking so you can go spend that money you’ve saved.

It’s great if you can find the process or journey toward your goal to be rewarding enough that you don’t need anything else to keep you going. But for many people, having rewards keeps them motivated when things get tough and the monster in your head is screaming, “Just give up!” So find what motivates you and use it to propel you forward. Just don’t break the bank doing it.

(Photo courtesy of eyesogreen)

The Relationship Between Self-Improvement and Personal Finance

January 9, 2013 By Jennifer Derrick Leave a Comment

With New Year’s just past and most people still in the honeymoon phase of their resolutions, it’s worth a brief look at how many self-improvement activities benefit your finances, and how studying one area can have a positive impact on the other.

I’ll confess to being something of a self-improvement junkie. Not because my life is in desperate need of repair, but because I find subjects like the relationship between the brain and the physical body interesting. It’s also interesting to see what new twists authors come up with on age old topics like weight loss and organization. I’ll trawl the library shelves and pick out several titles to take home at once and if there’s a Kindle freebie, I’m on it. I’ve found over the years that all this self-improvement reading has often benefited my finances, even if only indirectly. Here are some examples:

Weight Loss

It’s no secret that losing weight benefits your health which means less money spent at the doctor’s office. Your finances also benefit in other ways, including not eating out and limiting snack and expensive over processed food purchases.

Organization

When you’re more organized, not only do you have less clutter to wade through but your organization techniques tend to spill over to your finances. It’s much easier to deal with your bills, taxes, and accounts when everything is organized and easy to access.

Education

If you pursue your education, you’ll become more employable and possibly make more money. If you educate yourself about money, you’ll be more successful at managing your money.

Career Help

If you’re not in a satisfying job/career, you probably won’t make as much money as if you were working in a field you love. Passion counts for a lot when it comes to work.

Other self-improvement activities like quitting smoking (saves you money and medical expenses), stress reduction (another medical money-saver), creating better relationships (open communication about money is necessary to a financially healthy marriage), and dumping emotional baggage (everything becomes easier when you’re not constantly thinking about “issues”) can benefit your finances. And, of course, there’s a whole area of the self-improvement market dedicated to helping you sort out your issues with money and helping you to become debt free. Often even if you don’t set out to directly impact your finances, applying some self-improvement techniques to your life ends up saving or making you money.

The reverse is often true, as well. If you set out to fix your finances, you may find yourself improving other areas of your life. Let’s say you need to save money so you decide to quit smoking. Big money-saver. Or, you need to make some money so you start studying entrepreneurship so you can start a business. Not only might you open that successful business, but you might learn something about confidence, presentation skills, and improving your public appearance. Or maybe you decide to take an investing class at the local community college and suddenly you find yourself loving finance. It might lead to a career change which could make you a happier person.

Finances and self-help are intertwined. If you set out to study and act on one, you’ll likely find yourself getting better at the other one. So, whether your New Year’s resolution is to lose weight, deal with your relationships, or get a better job, don’t hesitate to trawl to self-help shelves at the library or bookstore and dive into your self-improvement project. Who knows? You might just find yourself on the way to a better financial life, too.

(Photo courtesy of Matt McGee)

Skip the New Year’s Resolutions

December 31, 2011 By Jennifer Derrick 4 Comments

I don’t make New Year’s resolutions anymore. I found over time that the pressure to accomplish something ended up defeating any progress. Every time I’d backslide or screw up I’d think, “I’ve blown it.” It was like the very act of making something a resolution made it into a success or failure proposition. Either I lost twenty pounds or I’d failed. Never mind that I lost fifteen pounds, the fact that I didn’t meet my resolution meant failure.

It was the same with money. If I resolved to save $1,000 and only saved $800, I felt like I’d failed. If I resolved to get better at investing and my portfolio took a hit, I felt bad. There was just too much pressure in “resolutions” for me. Plus, New Year’s resolutions always seemed to have a ticking clock behind them. They were for this year only. If I didn’t get something done in a year, that was a failure. Worse, since it was resolved at the first of the year I always seemed to feel like I had to get things done early in the year. If it was July and I was struggling, I felt bad. It may seem crazy to some, but that’s how it all felt to me.

One year I woke up and stopped making resolutions. All they were doing was stressing me out and making me feel bad about myself. I asked myself, “how are you going to achieve your goals?” I started paying attention to what needed to be done throughout the year and just doing it. I became a Nike commercial. “Just Do It” became my mantra. If I identified something that needed attention, I dealt with it right then. Jeans starting to get a little tight? Go ahead and lose five pounds now rather than waiting for New Year’s. Need to save more money? Stop spending so much now. Want to learn about investing? Go to the library tomorrow and get the books. Want to eat better? Head for the grocery store and get some produce.

Doing things as I go along has not only made for a lower stress approach to self-improvement, I also find that I accomplish more in a year. Instead of focusing on the one big goal I identified on New Year’s, I work on several smaller goals throughout the year. It’s less labor and brain intensive to lose five pounds in May than the twenty I could be facing by New Year’s. It’s far easier to save $1,000 if I do it in small increments all year rather than trying to do it all by March because I feel some self-imposed deadline looming.

It’s also seems easier to deal with setbacks when I’m not working on a “resolution.” If I have a week where I can’t exercise, I don’t feel like I’m failing at some overarching goal. It’s easier to say to myself, “It’s just one week. I’ll get it together next week.” With money, I don’t feel as bad if, while trying to save, the water heater breaks and the septic needs pumping. I don’t feel like these mishaps are destroying my big resolution. I just feel like they are unfortunate bumps in the road and I’ll get back on track once they’re behind me.

Maybe I’m crazy, but I’ve noticed a marked decrease in my stress levels and an increase in my ability to accomplish more now that I’ve stopped resolving to do things. Switching to an “as needed, on demand” approach softens my attitude and make me more able to deal with the inevitable setbacks that happen when trying to reach any goal. So my advice is to ditch the New Year’s resolutions and just handle things as you see a need. It’s much easier.

(Photo courtesy of Jason Tester)

Low Cost Self Improvement

September 23, 2009 By Jennifer Derrick 12 Comments

When we think in terms of improving ourselves, we tend to think of big things like going back to school, investing in expensive clothes, joining a gym, using expensive cosmetics, or indulging in expensive spa treatments or hair styles. But there are many free and low cost things you can do to improve yourself (both physically and mentally), boost your confidence, make you attractive to others, and make you a more interesting person. Some ideas:

Be conscientious of basic hygiene and grooming: Shower, use deodorant, and brush your teeth regularly. Comb your hair. Shave or keep your facial hair neatly trimmed. Keep your nails in good shape. Nothing is a bigger turn off than poor hygiene. Keep some mints or travel size bottles of mouthwash, a comb, and a small deodorant in your desk or briefcase for quick touch-ups.

Perfect your posture: Stand and sit up straight. Practice walking tall. Not only does it make you look more confident and assured (and thinner), it’s better for your body.

Public speaking: Practice your public speaking and interviewing skills. Getting rid of the “likes,” “ums,” and “you knows” goes a long way toward making you more appealing and a good conversationalist. There are many books and tapes available (at your library or used bookstore for low cost) that can help you learn to speak more clearly.

Read widely: Hit the library and read everything that appeals to you. Read fiction and non-fiction, best sellers and classics. Read newspapers and magazines. The more you know, the more valuable you are as an employee, dinner partner, date, and party guest. When you read widely, not only do you know more, but it gives you many more things to talk about when in public.

Clothes: You don’t have to spend a fortune on designer labels or keep up with the latest trends, but if you want to appear confident and like a person worth knowing, you do have to exercise some common fashion sense. Dress appropriately for the occasion. Keep clothes in good repair and don’t wear stuff with holes in it to public events. Wear things that fit and aren’t too tight or too baggy. Don’t overload on accessories. Remove stains or relegate stained items to your “lounging around the house” wardrobe.

Exercise: It helps with posture and dexterity, reduces stress, and helps control your weight, all of which work to make you a stronger, more attractive person with a better attitude on life. You don’t have to join a gym. Some good walking shoes and a set of weights will do the trick, or invest in a few workout videos.

Improve your memory/mental function: A strong brain not only staves off mental degeneration, it also makes you a better employee (you don’t forget assignments), and a person who can keep track of a lot of things at once. Read, work the crossword or jumble from the daily paper, get a Sudoku book, or play brain games like Big Brain Academy or Memory. All of these are fun and inexpensive ways to boost your brain.

Eat right: Eat a lot of fruits and vegetables, drink water, get over your caffeine addiction, and reduce your sodium and sugar intake. You’ll be healthier and feel better, which automatically makes you more confident and more fun to be around. You’ll slim down and your skin will improve, further improving your appearance.

Relax: Learn to relax. Take up yoga (videos are inexpensive), practice relaxing your muscle groups on command, take time for yourself, and find ways to deal with stress. When you’re relaxed you’re easier to be around because people don’t worry that you’re about to blow. You also feel better and are better able to deal with life’s demands.

Stay informed: Watch the news or read the paper to keep up with current events. You don’t have to obsess about every news story, but do stay informed enough to hold up your end of a conversation at a party or work event.

Prepare your speech: At interviews, work events, and networking opportunities you’re often asked, “So, what do you do?” Don’t waste the chance by stammering and tripping over your explanation. Have a prepared line or two about who you are and what you do. You’ll appear confident and you’ll give the other person an easy way to find out more about you.

Learn to keep a conversation going: Conversation is a dying art, but when you’re at a networking event or making chit chat before an interview, a good conversation can go a long way toward setting you apart from others. Learn to listen to what the other person is saying and to ask questions as appropriate. Learn how to pick up on small details about the person and pursue them (the team pennant on the office wall or the picture on the desk can be good starting points). Don’t monopolize conversations, either. Let the other person have a say.

Work on your spiritual side: Go to services, read about spiritual matters, and talk to others who share your beliefs. Meditate, keep a journal, and get in touch with whatever power you believe rules the world. Even if you don’t subscribe to religion, there are still spiritual aspects to life such as communing with nature, getting in touch with your feelings, figuring out the meaning of life, and harnessing energy. A full spiritual life increases your confidence in who you are and your place in this world, gives you more to talk about, and keeps you relaxed and centered through trying times.

Take a class: You don’t have to go for a full blown degree. You can take a night class at the community college, or take advantage of free classes at the library or local rec. center. Online classes are also widely available. Classes give you a chance to explore an interest or perfect a skill, both of which make you a more interesting and valuable person.

Do for others: One way to become a better person is to help others. Volunteer at a soup kitchen or offer to help a neighbor with a chore. Clean up a roadside or teach a kid to read. You’ll be doing something good for others and improving your character in the process.

Self improvement doesn’t have to be expensive. Think about the areas of yourself you’d like to work on and then think about how you can improve them for free or at a reduced cost. You’ll probably be surprised to find that you can do a lot for yourself with very little money. All you need is some time and a commitment to improving yourself.