Posts Tagged ‘achieving goals’

Tax Time = Tuneup Time

March 28, 2011

This recent article by NY Times writer Ron Lieber is a great reminder that tax time is a great time to check in with your complete financial picture and make some tweaks to keep you on track. It’s also a great time to organize your filing and get rid of financial clutter!

In short, the article suggests the following steps as long as you’re digging into your financial records. I’ve added my own tips to the steps as well as the author’s advice.

1. 401k checkup: First, rebalance your funds. As mutual fund values change, so does the allocation of your 401k account. It’s important to go in at LEAST annually (I recommend twice a year and help clients do the same) to reset to your target allocation.

While you’re in there, liquidate any company stock that you have accumulated. Many employers give their match in company stock, but it is risky to hang onto this. If things go south with your company, you could be out of a job AND see your 401k value go in the tanker. Diversify away from having all your eggs in that basket.

What about those old 401k accounts from former employers? If they’re still sitting in the company’s plan, this is a good time to consolidate those accounts into a rollover IRA, where your options will be greater and you’ll save on administrative fees. Not sure how to do this? Guess what else I help my clients do…

2. Saving for the Medium Term: We’ve all heard the rhetoric about saving for retirement and the benefit of saving early, and who hasn’t heard of the absolutely-necessary emergency fund? But what about the other things in the medium term, like vacations, large purchases, home maintenance or other big-money items that probably don’t fit into your day-to-day budget but that you’d like to eventually buy? Get started today by setting up a separate savings account for each goal, then make your savings automatic. Fifty bucks out of each paycheck probably won’t be missed, but it can add up quickly toward that week in Nantucket or new tires on your car. ING Direct lets you set up subaccounts and they offer great rates, compared to what you might get down the street at your bank branch.

3. Automatic Donations: If you’re charitably minded but often put off writing those checks till the end of the year, consider dividing your donation by 12 and setting up automatic monthly donations to ease the burden on your end-of-year budget. And no matter when you are giving money to charity, make sure you’re either writing a check or using a debit or credit card to provide an accurate record of the donation for your tax return. The IRS no longer allows the “I put ten bucks in the offering plate at church,” deduction. You gotta prove it.

If you’re an American Express cardholder, Lieber recommends their Members Give program, which lets you set up automatic donations or you can even use Member Rewards to make your gifts. I’m all about credit card rewards as long as they’re not incurred by debt you’re going to carry from month-to-month!

Taking these little steps should only take about an extra hour as long as you have all your financial information out, and it can make a tremendous difference in your financial health going forward, so just do it! You’ll be glad you did when you begin to reap the rewards of sound financial management.

Kelley C. Long, CPA is a Chicago-based financial coach who believes you shouldn’t have to have a million bucks to receive personalized financial advice. Check her out at www.kelleyclong.com.

Grocery Shopping Tips

January 18, 2011

One of the changes I am working to make permanent in 2011 is to plan ahead with meals and increase my cooking at home, both to prevent mindless nibbling as well as save us a little bit of money on the food budget. I’m also hoping this helps me shed a few of the fifteen pounds I managed to pack on through 2010!

Tuna casserole for grown-ups!


Inspired by my new Jessica Seinfeld cookbook (thanks, Mom!), I’ve done pretty well so far. And Sweet Pea has even expanded his pallet a little to try some new things! But when I look at how the grocery bill has ballooned, I have to think twice about how I’m going about my weekly food shopping.

To that end, I’d like to share some food savings tips from the August, 2010 issue of O Magazine . I hope they help you too with your financial resolutions today and throughout the year!

Fish and seafood: Frozen fish is a great way to save, as much of the “fresh” fish at the grocery has already been frozen (the label will tell you this). If you want to splurge, wild Alaskan salmon is worth the money and is certified as sustainable by the Marine Stewardship Council.

Baking ingredients: Skip the name-brand sugar — you can’t tell the difference between the much less expensive store-brand. But when it comes to vanilla extract, experts say it is worth the extra money to buy the real deal.

Cookware: Cookie sheets and stock pots don’t require any fancy materials or coatings, so go ahead and buy the cheapest on the shelf. But don’t scrimp on a good skillet that you’ll use for things like searing or sautéing. You’ll appreciate the even distribution of heat offered by a high quality pan.

Liquor: I know this one from personal experience: if you’re going to mix vodka with anything (even olive juice, like my favorite cocktail), no need to buy the good stuff. Vodka is like tofu — it adopts whatever flavor you add to it. Save your money for a delicious bottle of single malt scotch!

Spices and herbs: Most name brand spices don’t offer anything different than generic brands, so go ahead and cheap out there. And when it comes to buying fresh versus dried, Alejandra Ramos advices that the only time you REALLY need to use fresh is when the recipe calls for basil and parsley.

Organics: The rule of thumb for buying organic produce is that if it’s sweet, go organic. But if it is a fruit or veggie with a thicker skin like onions, bananas or avocados, you’re safe from pesticides anyway.

Olive oil: If you’re going to cook with it, regular olive oil will do just fine. And if you’re making a dressing, you can mix two-thirds cheapie with one-third fancy and still enjoy great flavor. If you’re drizzling over food though, go for the good stuff.

Fruits and veggies: If a vegetable is out of season, buy frozen without losing a lot of the nutrients. Not sure what’s in season? Check out Eat the Seasons, a website updated weekly with what IS in season. Brussels sprouts, anyone?

Cheese: I saved the best for last, one of my diet staples. The only time you ever really need to go high-end on cheese is when you’re doing a cheese plate or fondue. Otherwise, go economy when serving with crackers, in meals, salads or even when grating over food.

I hope you’ve found some information to help with your next trip to the local market. Anything I missed? What grocery store tidbits can you offer? Anyone care to disagree with any of the above?

Kelley C. Long is a Chicago-based financial coach who believes you shouldn’t have to have a million bucks to receive personalized financial advice. Check her out at www.kelleyclong.com.

It’s Not Rocket Science – Achieving Goals

December 7, 2010

As we prepare to wrap up another year, many people will once again be setting goals for the year ahead – count me among those people. If financial goals are among your resolutions, then the next logical question is, “How do you get there?” Read on for the answer.

First of all, don’t forget to be realistic when actually setting financial goals. You don’t have to shoot for the moon to make a difference in your finances. And remember that your goal doesn’t have to be about amassing large amounts of money. It can be as simple as putting a little cushion in place for splurge purchases.

Once you’ve set your goal, the first thing you want to do is write it down and post it where you’ll see it frequently. Is your goal to pay off your credit cards? How about a sticky note that says, “Debt-free = stress-free,” stuck to your credit card. The next time you are tempted to stray, you’ll have a solid reminder to make you think twice. If your goal is saving for something great like a tropical vacation, get out that beautiful photo of the beach and tape it to your computer monitor for motivation.

But beyond setting the goal, how do you get there? Once you’ve established a dollar-amount, break it down into time increments. Let’s continue with the credit card debt example.

Say your balance is $2,000 (which is closer to what the everyday American carries than the scary $8,000+ average often cited) and you’d like it gone in a year. Divided by 12, that’s about $167 per month needed to reach your goal. (I know this calculation doesn’t take interest into account, but I’m trying to keep it simple)

So how do you find an extra $170 or so in your monthly budget? There are some great tips in this blog post by my friend Andy, or you could try the standard ideas like packing your lunch, scaling back from a latte to a drip coffee with lots of milk, or cutting back on entertainment spending by ordering the drink special when out with friends instead of your expensive favorite cocktail.

Most important to achieving any financial goal is to make it automatic. Your credit card minimum payment may only be $75, but in your head, it must become $170 until the balance is $0.

If your goal is to save some money, set up an automatic transfer to your savings account each time you get paid. Just like you don’t miss a mortgage payment because it’s automatically withdrawn each month, you’ll find it much easier to save when it happens without your having to click a button each month.

Setting and achieving financial goals is not rocket science, and even the most strapped of us can make them happen. Keep it simple, be gentle with yourself if you get off track and celebrate the little victories.

Now it’s your turn: What are your goals for 2011? Mine include saving some splurge money for our tropical vacation in March and investing in continuing education to keep me sharp on personal finance topics. Please share your goals and any additional tips you have for getting there below in the comments.

Kelley C. Long is a Chicago-based financial coach who believes you shouldn’t have to have a million bucks to receive personalized financial advice. Check her out at www.kelleyclong.com.

Financial Goals for the Real World

October 26, 2010

 

It’s in all the advertisements for financial service providers: “Let us help you achieve your goals!” “Your life. Anything is possible.” “Take charge of your financial future.” “What’s your dream?” “Together we’ll go far.” And the commercials with attractive silver-haired Baby Boomers sailing the ocean blue or chuckling over the Wall Street Journal while sipping coffee… does anyone really aspire to that?

 

beach

But the point is, without a bit of a dream behind them, financial goals can be as wishy-washy as a weight loss goal without a fitness and nutrition plan. You need motivation and some guidelines to stick with it or like a diet, the first chocolate cake you encounter will have you off the wagon and giving up.

But what does it really mean to set financial goals? What are your goals? Wait, you haven’t really thought about it? Many people don’t because they don’t think they are in a place to do so. They say things like, “I don’t have time or money for any new goals in my life.” Or, “Just getting the kids to and from school and putting food on the table while growing my career is enough of a goal for me!” Sound familiar?

So let me re-frame the question: If money wasn’t an issue, what would you do differently? Move to a different neighborhood? Go back to school? Go on a safari? Pay off your credit cards? Or even just hire a housekeeper? These are financial goals.

So go ahead, list them out. Then try to put a price on each goal. For example, a move to a different neighborhood could be as simple as the cost of moving: $2,000 for movers, $1,500 for a security deposit, $500 for those miscellaneous things that you always seem to need when you move like new wastebaskets and perhaps a small furniture piece.

For others it might require accumulating a down payment and getting your current home ready for sale. That’s going to require a bigger budget.

Not sure how much your goal will cost? Start doing some research. Call your community college to inquire about the average cost of a Master’s degree. Google “house cleaning” to find out what cleaning services in your area charge. Just doing the research and finding out a bit more about your “someday” dream will make it a touch more real and set you up to being closer to making it “today.”

And just like that, you’ve set some financial goals! With that out of the way, it makes it much easier to figure out how to achieve them. And trust me, it’s really not that difficult. I’ll be covering those steps in a future post, so stay tuned!

Financial Advice for the Ages

October 12, 2010

There are some personal finance rules of thumb that are set in stone across the board, no matter who you are, how much money you have or what your financial goals are. For example, whether you make $1,000 per month or are worth $10 million, you should have an emergency fund that equals a minimum of three months expenses.

But then there are also rules and suggestions that change as you age and (hopefully) earn more money. Depending on your situation, here are a few age-based tips to maximize your financial well-being.

Mid-twenties
At this age you’re probably still single, no kids, making pretty decent money, traveling a bit, pretty career-focused and not thinking too much about retirement. What essential steps should you be taking?

  1. Get debt-free and stay that way. Pay off your credit cards, student loans and car loan to get your credit score in tip-top shape for when you will inevitably want to qualify for the best mortgage rates.
  2. Take advantage of your employer’s 401k benefit. If you’re offered a match, put at LEAST the amount in there to maximize the match. Aim to defer at least 6% of your salary, 10% if you can afford it.
  3. Get your emergency fund in place ASAP. Start with only $25 per paycheck if you have to, but make it automatic, and once the money is in there it stays. You’ll be glad you have it if you lose your job or have an accident.

Mid-thirties
If you’re a typical American, by this time you own a home, have 2.3 kids and are settled into a career that provides a solid income. You probably spend a lot of time at your kids’ events and have a couple of nice cars in the garage. Make sure you’re staying financial healthy by also doing the following:

  1. Keep socking that money into your 401k. Do NOT sacrifice retirement savings to pay for your kids’ education. They don’t give retirement scholarships or loans.
  2. But you should be saving for college if you can. Decide how much you do want to help (some people want their kids to pay for some to make sure they value the opportunity) then open a 529 account for each child with monthly automatic contributions. Also, make sure you’re matching any expensive extracurricular activity costs with college savings. If you can’t afford to save for college AND pay for select soccer or elite gymnastics, reconsider the high-end program. Chances are your child won’t be making a career out of it and while it might be a tough pill to swallow to drop down to a more affordable league, it will be a lesson in sacrifices and choices that won’t be forgotten.
  3. Make sure your emergency fund balance has been adjusted to cover increases in your expenses over time. Once you’ve reached the goal, keep up with the automatic monthly savings into a Roth IRA or money market savings account.

Mid-fifties
You survived toddlers and are now enjoying the final teen years with your kids, who are hopefully college-bound overachievers. You may be considering a second act career or wondering what the heck you’re going to do with your time once the last of your brood flies the nest. What else should you be thinking about?

  1. It’s probably time to really think about what retirement means to you, then putting that story into numbers. Most people these days aren’t really planning to live out their days on a golf course, but would like the flexibility to hit the links when they like while also staying engaged and active. Think about how the cost of your lifestyle will change and make sure you can weather that.
  2. Take a look at how your 401k (you’re still contributing, right?) is allocated. At this point you should only have about 50% of your funds in stocks, so make any updates to put the other 50% in solid bond funds or other fixed income instruments.
  3. Try to get your house paid off sooner rather than later. Your goal should be to retire completely debt-free.

As with all personal finance tips, these are simply general ideas based on what the “average” American deals with through life. Of course your situation is going to be different and you’ll make adjustments as needed according to what’s important to you. Above all, remember that the purpose of all of this is to simply allow you to enjoy life without having money as a barrier to pursuing your calling.

Reflections on Achieving Goals

May 11, 2010

These days I am constantly reflecting on the time in my life about three years ago when I began to lose 30 pounds, which put me in the best shape of my life. Not only did I look great, but I felt fabulous and it showed in all areas of my life: personal, professional and spiritual.

I was able to maintain my weight (and the resulting “glow”) for at least 2 years, so no one can blame it on stress, life changes, a fad diet, etc. In fact, I like to think that I returned to a state of equilibrium because of the things I was doing and I can’t think of a healthier time in my life.

But somewhere along the road in the last year or so, I stopped doing some of the things that got me so healthy and I find myself digging out my “fat clothes” to get through it. This reminds me of one of the best lessons I took away from my weekend at Life Success Seminars two years ago.

That lesson had to do with achieving goals in life and sustaining the results. There are specific things we do that get us to our goals; they might include journaling to get through a tough time, exercising to achieve a body-image goal or counting pennies to pay down debt.

Whatever it is that we do, we often stop doing those things once our goal is achieved. But what I learned at Life Success is that we need to keep doing the things that got us there in order to sustain the desirable result. So I am asking myself, what did I STOP doing that derailed my healthy look, outlook and lifestyle?

Too often when we find ourselves in a place we’d rather not be, we think of restrictions to get us back on track. Cutting out cookies to lose weight, trimming back on shoe-shopping to get out of debt, avoiding painful subjects that have us feeling low.

I’d like to propose the opposite: instead of thinking of what you can stop doing to get yourself back on track, think of what you can start. For me and getting back into my skinny jeans, I will start taking long walks and practicing yoga again. Journaling about whatever is floating around in my head. Taking time to check out and “just be” every once in awhile. These are all things that I was doing when I lost all that weight that have been crowded out lately by other activities.

How about you? What is it that you may have stopped doing that you could start again that would get you back to where you want to be?

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