Yes, Budgets.
You have heard it before, maybe in school, maybe from your parents, or spouse, or your Financial Advisor.
You need a budget.
Well you do.
But listen, this does not have to be a big deal were you spend hours a week and have to eat ramen noodles for dinner to stay on budget. This can be an interesting and eye opening experience! Really! Bear with me...
All you need to do is start keeping track of what you spend each day, and then each month. Then you need to write in those bigger annual expenses you might have. And there you have it, your budget.
Your budget should be a picture of what you really spend right now. If we don't know where you begin, how can we honestly get you to where you want to be?
Once you have an honest, truthful listing of what you spend you can see where spending is out of control (I'm looking at you JCREW) and where it is right on.
So begin today in any form or fashion you like, paper, excel spreadsheet, or online at Mint.com which is what I use.
Once you have that budget set, you are reviewing it often and comparing it to reality, revising it, then we can begin to do the one thing everyone tells you that you need but you have no idea about the words coming out of their mouth..........................
SET A GOAL!
Thursday, July 30, 2015
Monday, July 20, 2015
Can we talk about blowing a dollar on something stupid?
Yes, just one dollar. Who cares. You have 876 of those dollars in your bank account, why would you miss just one?
Here is why. Remember interest? We talked about it before. Its when your money earns money by doing what it does best, working. Actually you lend your dollar to someone, they pay you money to borrow that dollar and eventually give you your dollar back. I call this giving your money a job.
Anyway back to my point, the reason you should think about that dollar you are blowing on that snickers bar that you your ass does not need (well mine doesn't anyway) is because of this:
So you may be saying to yourself, "Well big deal, 33 dollars won't buy me much either!" but we are only talking about the effects of blowing 1 dollar. You probably blow 100 dollars a month on stupid shit without even blinking. So use this same concept on 100 dollars blown on shit every month and see where we end up.
So instead of blowing 100 dollars a month on, you save it, earn interest on it, and over your lifetime you end of with........wait for it.............
*For all you geeks out there I did a time value of money calculation using 7% compound return over 60 years
** This is the future value of 100 dollars, invested monthly over 720 months, or 60 years, at 7% interest.
Here is why. Remember interest? We talked about it before. Its when your money earns money by doing what it does best, working. Actually you lend your dollar to someone, they pay you money to borrow that dollar and eventually give you your dollar back. I call this giving your money a job.
Anyway back to my point, the reason you should think about that dollar you are blowing on that snickers bar that you your ass does not need (well mine doesn't anyway) is because of this:
Your dollar over your lifetime could actually pay you 33 dollars over your lifetime! *
Ladies and Gentlemen that is a shit load of money for one small, measly dollar to give to you! I am choking on my snickers right now just thinking about it.
Ladies and Gentlemen that is a shit load of money for one small, measly dollar to give to you! I am choking on my snickers right now just thinking about it.
So you may be saying to yourself, "Well big deal, 33 dollars won't buy me much either!" but we are only talking about the effects of blowing 1 dollar. You probably blow 100 dollars a month on stupid shit without even blinking. So use this same concept on 100 dollars blown on shit every month and see where we end up.
So instead of blowing 100 dollars a month on, you save it, earn interest on it, and over your lifetime you end of with........wait for it.............
$1,112,186.25! **
For God Sakes People can we stop blowing money on shit we don't need?
We can! Start tomorrow. Just don't blow 3 dollars you normally blow and by the end of the month you will have saved 100 dollars, you are now well on the way to 1.1 million large.
Ladies until next time, stop blowing money on 3 dollars of shit each day.
*For all you geeks out there I did a time value of money calculation using 7% compound return over 60 years
** This is the future value of 100 dollars, invested monthly over 720 months, or 60 years, at 7% interest.
Saturday, July 18, 2015
Financial Independence? I thought I was supposed to be concerned with retirement?
Retirement. Yes everyone is concerned with saving for retirement. You graduate from high school or college and immediately...
"You need to save for your retirement!"
"Join your 401k to get the company match!"
"Start and IRA and max it out as soon as possible!"
What the hell does it all mean and why should I even care? Well you should. But lets change the way we think about it and call it something else.
Financial Independence.
It is much more attainable, at any age and is different for every person.
Retirement. It sounds so far away, so hard to grasp, so life-altering. Let's take the mystery and confusion out of it and just call it financial independence. There really is not much of difference only once you are financial independent you can choose what you want to do, continue to work or not work, continue to live in your current location or move, you can be any age, you can have children or not, they can be old or young. Financial independence just means your money can pay your bills for you, not your paycheck.
So ok, my money pays for my bills, but how? Let's start with a concept, its call interest. Here is an official definition of interest:
"The fee charged by a lender to a borrower for the use of borrowed money, usually expressed as an annual percentage of the principal."
Say what? In more concise language, you lend your money to someone, they pay you money to borrow it, and then you eventually get your original sum back.
Right now if you have a car payment or a mortgage you are paying someone else interest. The goal is for people to pay you interest. Most people think that over your lifetime, you save a pile of money and eventually retire and spend that said pile of money. You can do that, but there is a better way. The better way is to save a pile of money, have that pile of money generate more money (interest) and only spend the interest thus keeping the pile in tact, and hopefully making it grow.
So how do you get to that? These four steps will get you there.
1. Make a budget and revise it often until you live with it and keep it.
2. Pay off your debts
3. Save money, collect interest, reinvest interest
4. Achieve Financial Independence. Or in other words, when the pile gets large enough you can now live off the interest or keep reinvesting it and growing your pile larger.
I have obviously simplified it very much. Each of these steps involves a lot but we are going to talk about each one individually in future posts. Until then, stay smart ladies (and gentlemen if you are reading).
"You need to save for your retirement!"
"Join your 401k to get the company match!"
"Start and IRA and max it out as soon as possible!"
What the hell does it all mean and why should I even care? Well you should. But lets change the way we think about it and call it something else.
Financial Independence.
It is much more attainable, at any age and is different for every person.
Retirement. It sounds so far away, so hard to grasp, so life-altering. Let's take the mystery and confusion out of it and just call it financial independence. There really is not much of difference only once you are financial independent you can choose what you want to do, continue to work or not work, continue to live in your current location or move, you can be any age, you can have children or not, they can be old or young. Financial independence just means your money can pay your bills for you, not your paycheck.
So ok, my money pays for my bills, but how? Let's start with a concept, its call interest. Here is an official definition of interest:
"The fee charged by a lender to a borrower for the use of borrowed money, usually expressed as an annual percentage of the principal."
Say what? In more concise language, you lend your money to someone, they pay you money to borrow it, and then you eventually get your original sum back.
Right now if you have a car payment or a mortgage you are paying someone else interest. The goal is for people to pay you interest. Most people think that over your lifetime, you save a pile of money and eventually retire and spend that said pile of money. You can do that, but there is a better way. The better way is to save a pile of money, have that pile of money generate more money (interest) and only spend the interest thus keeping the pile in tact, and hopefully making it grow.
So how do you get to that? These four steps will get you there.
1. Make a budget and revise it often until you live with it and keep it.
2. Pay off your debts
3. Save money, collect interest, reinvest interest
4. Achieve Financial Independence. Or in other words, when the pile gets large enough you can now live off the interest or keep reinvesting it and growing your pile larger.
I have obviously simplified it very much. Each of these steps involves a lot but we are going to talk about each one individually in future posts. Until then, stay smart ladies (and gentlemen if you are reading).
An Introduction to the Smart Girl's Guide....
What is this?
This is where you begin. This is where you start to think differently. To change your financial story. To take charge of finances to change your life. This is where we change the dialog about women and finances. Where we talk about making smart decisions with money to change the course of our lives and eventually gain financial independence.
This is also where we change our habits so we can change our lives and the lives of our children.
What is financial independence?
It is the time where you and your family don't have to live paycheck to paycheck. Where your money has a job and that job is to pay you more money. Were you can choose how much, when, and if you work. Where every day is not a race to consume more, work more to consume more, and where you are free from the need to constantly upgrade and consume more to try to impress people who really don't matter.
Why for Women?
Women are not part of the financial conversation enough of the time. Women historically have not been taught the basics of investing and financial management and so do not feel interested or want to be involved in finances until it is late in the game or sometimes too late. Women, in general, live longer, make less, and sacrifice more of their working years for family time and thus need to be compensated and manage their finances differently than men. Women need a seat at the table when we talk about a financial plan.
So many times the conversation that we hear on a daily basis is surrounding how we look, what we eat, what we wear, how we interact with people. Less of the daily flow to women is about money and making smart decisions that secure your future. I want to change that.
Why do you seem a little mad?
Because some women are forced to make decisions that put them in bad positions because of money or lack there of. Their children then end up bad positions. Women, in general, take on a larger role in child rearing. So lets make this easier, help women, help children.
Because many young women (and men for that matter) are not educated about finances and thus make poor decisions regarding finances. There seem to be more resources focussed on helping men with money. I see a gap for women to receive education and have role models for how to be successful financially.
I think education, especially early, can go a long way in helping secure a safe and sucessful future for women and their families.
What are your qualifications?
I am a Certified Financial Planner. I am also human, I blow money on stupid shit and live to tell about it. I acknowledge my short falls and try each day to improve, sometimes I do and sometimes I don't. I have four children. I want them to be successful with money so that for them, money is not an issue, they can focus on what really matters, like their passion, their family, our world, and other humans.
This is where you begin. This is where you start to think differently. To change your financial story. To take charge of finances to change your life. This is where we change the dialog about women and finances. Where we talk about making smart decisions with money to change the course of our lives and eventually gain financial independence.
This is also where we change our habits so we can change our lives and the lives of our children.
What is financial independence?
It is the time where you and your family don't have to live paycheck to paycheck. Where your money has a job and that job is to pay you more money. Were you can choose how much, when, and if you work. Where every day is not a race to consume more, work more to consume more, and where you are free from the need to constantly upgrade and consume more to try to impress people who really don't matter.
Why for Women?
Women are not part of the financial conversation enough of the time. Women historically have not been taught the basics of investing and financial management and so do not feel interested or want to be involved in finances until it is late in the game or sometimes too late. Women, in general, live longer, make less, and sacrifice more of their working years for family time and thus need to be compensated and manage their finances differently than men. Women need a seat at the table when we talk about a financial plan.
So many times the conversation that we hear on a daily basis is surrounding how we look, what we eat, what we wear, how we interact with people. Less of the daily flow to women is about money and making smart decisions that secure your future. I want to change that.
Why do you seem a little mad?
Because some women are forced to make decisions that put them in bad positions because of money or lack there of. Their children then end up bad positions. Women, in general, take on a larger role in child rearing. So lets make this easier, help women, help children.
Because many young women (and men for that matter) are not educated about finances and thus make poor decisions regarding finances. There seem to be more resources focussed on helping men with money. I see a gap for women to receive education and have role models for how to be successful financially.
I think education, especially early, can go a long way in helping secure a safe and sucessful future for women and their families.
What are your qualifications?
I am a Certified Financial Planner. I am also human, I blow money on stupid shit and live to tell about it. I acknowledge my short falls and try each day to improve, sometimes I do and sometimes I don't. I have four children. I want them to be successful with money so that for them, money is not an issue, they can focus on what really matters, like their passion, their family, our world, and other humans.
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