May 17, 2011
It’s time to resist the influence of advertising, manage your money, and make purchases based on your priorities. It's your money, be your own financial expert and start by following this spending tip.
Saving Tips
May 10, 2011
In my book about managing your money, Money Smart, I write about maximizing your money to its full potential. Here are 7 key steps from the book to change the way you think about spending your money to help you make your current income level work. Each one individually has the potential to make a big difference, and together they can transform your personal finances.
April 30, 2011
Last week, I talked about the Rules of Money, and where there is money there is SPENDING. We couldn’t get through Financial Literacy Month without talking about how we spend our hard earned cash. If you want to do well financially, there is a sure-fire way to do it. Spend your money wisely. Remember, one of my Money Rules says it all: It really isn’t about how much you make, but what you do with it that counts.
In my book about personal money management, Money Smart, I share the 10 Rules of Spending Wisely. In the previous two blog posts, I shared the first two of three Spending Rules, and here is the third rule that will help you get the most from the money you spend.
Spending Rule: Understand Today’s Sales Game
Thanks to technology, the game of selling has changed quite a bit in recent years. That’s why you need to understand today’s sales game. If you don’t, you will be at high-risk of spending far too much of your hard-earned money where you really didn’t intend to—and even being played for a sucker at times. Here’s another way to ensure you spend your money wisely.
Let’s say you want to buy a car. You go to a dealer and take a test drive. The salesperson makes a copy of your license, as required in case you take off with the car. While you’re driving, he keys your license number, and the license number of the car you just drove in with, into his computer. By the time you get back he knows a lot about you, like your credit history, car ownership profile, financing history, and more. If you’ve already visited another dealer the chances are good he now knows what happened there, like how much you were offered for your trade-in and the reason why they didn’t close the sale.
Don’t think he’s just trying to sell you a car. He’s after a lot more. On the financing alone he doubles his commission. And the same goes for the trade-in. Then there are the warranties, maintenance contracts, VIN etching, fabric protection… The list goes on and on. Today’s auto industry is on the cutting edge when it comes to sales techniques and tracking online research. Learn to handle auto salespeople and you can handle almost any other type of salespeople.
To protect yourself and to become a smarter consumer, educate yourself. I wrote Money Smart as a common sense manual for learning to manage your money in everyday living. Read and put into action the 10 Rules of Money and the 10 Rules of Spending, and you will make your money go farther and be more successful with money.
April 29, 2011
Last week, I talked about the Rules of Money, and where there is money there is SPENDING. We couldn’t get through Financial Literacy Month without talking about how we spend our hard earned cash. If you want to do well financially, there is a sure-fire way to do it. Spend your money wisely. Remember, one of my Money Rules says it all: It really isn’t about how much you make, but what you do with it that counts.
In my book about personal money management, Money Smart, I share the 10 Rules of Spending Wisely. Yesterday, I shared the first of three Spending Rules, and here is the next rule that will help you get the most from the money you spend.
Spending Rule: Always Look at the Annual Cost
To understand the real impact of your spending choices, always look at the cost over a year, not just at the cost today. Let’s say you spend $4.50 for a fancy coffee, or $10 to eat lunch out five days a week. Those seem like small expenses, but the annual costs are $1,125 and $2,500, respectively. That’s $1,875 and $4,165 before taxes; $142,000 and $318,000 in thirty years at a 6% investment return. This is what you are actually trading away with those small purchases. Remember to also look at how much sooner you can stop working, or spend time at something you’d enjoy more. This doesn’t necessarily mean you shouldn’t spend that money. It’s your life and your choices (or financial trades). Just be sure you take the time to calculate the annual cost and fully understand the true size of the trade involved in your purchase.
April 28, 2011
Last week, I talked about the Rules of Money, and where there is money there is SPENDING. We couldn’t get through Financial Literacy Month without talking about how we spend our hard earned cash. If you want to do well financially, there is a sure-fire way to do it. Spend your money wisely. Remember, one of my Money Rules says it all: It really isn’t about how much you make, but what you do with it that counts.
In my book about personal money management, Money Smart, I share the 10 Rules of Spending Wisely. Over the next few days I will share three of the rules for getting the most from the money you spend.
Spending Rule: Know Your Priorities and Stick to Them
A great way to make this rule a reality is to take a couple of minutes and make a simple list of every immediate smaller purchase you want or need to make. I’m talking everything except normal weekly food purchases. New underwear, dishwashing liquid, toothpaste—you name it. Add to this list any larger purchases that are now at the top of your priority list (a new couch, TV, etc). Then just keep updating this little list whenever there’s something to add or delete and whenever your priority sequence has changed. Doing this, I almost never have to make a special trip because I ran out of something. Most importantly, I know what I want and what my priorities are when I walk into any store.
When you are out shopping and see something you want to buy other than normal food or household supplies, and it’s not on your list, don’t buy it! You especially need to avoid such impulse purchases when the item is more than $25. If you still want the item after you’ve left the store, sleep on it. If you still want to buy it when you wake up, and it involves a significant amount of money, look at your priority list and decide what you’re willing to trade to get it. If you like the trade, then fine, go buy it.
Now that you have your list, you know what you are about to buy and what you will be purchasing fairly soon. When you’re out shopping and feel like it, take a look at the various offerings for your next purchase(s). Think about the exact item you’ll buy when the time comes. I have come to love what this pre-shopping does for me. I end up buying so much smarter and being so much happier with my purchases. This simple strategy also greatly reduces buying again too soon because I bought what I really wanted.
March 3, 2011
Anyone sick of Charlie Sheen yet? I’ve watched with amazement at the media blitz on this troubled actor and at the rate that everyone, EVERYONE seems to be talking about it. I’ve got to admit it made me wonder, when did we embrace the crazy and forget common sense? Is following Charlie Sheen’s troubles as important as following the on-going struggle of so many Americans to put their financial lives together again? Of course not, but it can be a tantalizing distraction. Far too often that same attitude, giving in to the tempting impulse or distraction of the moment, has become a real problem when it comes to many people’s finances.
We need to turn away from the trend toward rash and impulsive buying that is evident in everything from small impulse purchases to buying expensive upgrades and a penchant for so-called retail therapy. Do it by taking a few minutes to write a prioritized shopping list of all the items you want, both large and small. When shopping, an impulse to purchase items not on the list should be considered a red flag and strictly avoided. Sleep on any decision before making a purchase. If you still want the item in the morning, look at your priority list and decide what you are willing to trade for it. It’s a simple, common sense approach that works as an antidote to this destructive tendency.
Let’s take this opportunity to turn away from bad habits and back to common sense. That’s one of the reasons I wrote Money Smart: to give hard working people some time-tested, common sense guidance on everything from spending to investing and creating financial freedom. Will we the American public always be fascinated by a celebrity meltdown? Probably, but we can also resist tempting distractions and embrace common sense to straighten out our financial lives.