April 2011 - MONEY SMART

Timely updates and reminders on personal money management. Seeing to it that you always have the up-to-the-minute information you need to win the game.
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.


April 27, 2011

Once again I want to offer a huge thank you to Gena and Jeff over at Ha Nui Loa for volunteering to review Money Smart, my personal finance book, and for inviting me to guest post on their blog.

I connect strongly with their message of living simply and I also participate in the slow-living way of life. While there may appear to be a discrepancy between the topic of money and simplifying your life, I can guarantee you that there’s a very strong relationship between the two.

Money isn’t the most important thing in life—living the life you truly desire is.  I wrote Money Smart to give people tools to manage their money, create their own financial freedom, and build the life they want to live now. Living simply often plays a vital role in focusing on what is most important in life and creating financial freedom.

Take a moment to visit Gena and Jeff, and check out my post, Creating Financial Freedom and Living the Life of Your Dreams.

You can also find Gena and Jeff on Facebook and Twitter.


April 25, 2011

April is Financial Literacy Month and I started the month talking about defining financial literacy and how to begin.  Then I started to talk about the money rules.  There are nine rules to the game of money that I describe in my book, Money Smart.  They are absolutely critical to your success with money and its role in your life as you work to create financial freedom.  Follow them and you will quickly see a positive change when it comes to money.  Break them often enough and you will almost certainly insure that money ends up subtracting from your happiness rather than adding to it. So here is the second of three of the nine Rules of Money that I am sharing:

Money Rule: Be Disciplined

Discipline simply means being committed to doing what you need to do to get the things you said you wanted. To be successful with money and to be successful in life, you need to be disciplined. If you are not, you are unlikely to achieve anything like the life you wish. With a positive attitude and good discipline, your chances for success with money and in life are very good. You will find that this money rule will have an especially large impact on your chances for success. In Money Smart, I discuss strategies for boosting discipline, because it is a challenge for everyone.

I provide nine Money Rules in Money Smart; and three great money rules here to get you going on your road to success with money.   The Rules are a road map to success, follow them and find your way to financial freedom.  Financial Literacy Month is a great time to start.


April 22, 2011

April is Financial Literacy Month and I started the month talking about defining financial literacy and how to begin.  Then I started to talk about the money rules.  There are nine rules to the game of money that I describe in my book, Money Smart.  They are absolutely critical to your success with money and its role in your life as you work to create financial freedom.  Follow them and you will quickly see a positive change when it comes to money.  Break them often enough and you will almost certainly insure that money ends up subtracting from your happiness rather than adding to it. So here is the second of three of the nine Rules of Money that I am sharing:

Money Rule: Have a Written Financial Plan and Follow It

You must have a written financial plan that identifies what you want and how you’re going to get it. If you do not, you will have created a very high probability that you will never achieve the kind of financial freedom you desire.  Your written financial plan is the map of how you will spend and save your money and reach your destination.  Over the years, through talking and working with a lot of people about their personal money management, I have been stunned that most people do not really know where their money goes. Plus, half of the people who believe they live within their means do not. They just don’t know it. If you do nothing else, you absolutely must know how you actually spend your money and its impact on your life. Write down your plan and follow it.  My book, Money Smart, walks you step by step through the process of creating a personal money management plan that is simple to follow. All the tools you need are there and electronic versions of the worksheets and calculators are free on www.moneysmartonline.com for your convenience.


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