Some Financial Basics

If you’ve done your review of your 2007 spending, here are some items that you should see in the year’s finances.  (All of these assume you’re still in the work force.)


         You saved at least 10% of what you made.

         You have at least 10% of your pre-tax, pre-deductions annual earnings in savings. 

         You’ve funded retirement accounts.

         You didn’t spend more than you make, so you pay your credit cards off each month.


Give yourself a grade on each of these.  In the next posting we’ll look at how you can prepare for next year.



In With the New

Finishing up this year well from a financial responsibility standpoint will help get the New Year started right.  So the next few postings will help position folks for that transition. 

         Know where you’ve been.  Look at what you spent and what you spent it on in 2007.  If you use an off the shelf computer program to keep track of your checking and credit cards, look at an annual summary of spending by category and look at the monthly breakdown.  If you don’t, do some monthly summaries by category using a paper spreadsheet. 

         What surprised you?  In looking at your summaries, what did you spend more on than you think you should?  What were you glad to see you didn’t spend too much? 

This will take some time to do, so give yourself a few hours to get your information together.  Then do some serious thinking about what it’s telling you. 

Keeping Up

Financial competition can be a slippery slope.  Trying to get the newest, fastest, most expensive of everything that your friends and neighbors have is a no win game.  Rather than looking to others for hints on what you spend money on, let your income, conscience, and common sense be your guide.  Spend less than you make and live in accord with your financial resources. 

Year End Tips – The Sequel

Cutting Spending During the Holidays

You’ve already bought gifts for everyone and now spending through the end of the year looks like the national debt.  What can you do to cut back spending until your first 2008 paycheck?

–  Eat from the pantry and the freezer.  Granted you might want to get a Holiday Ham (or Tofurkey if you’re a vegetarian), but most of us could eat from our stored food for months if we had to.  Look into the non-perishable items as well as the things in your freezer that you keep “just in case”.  Plan menus around that and only buy what you need to to finish those meals out.

–  Pay bills only when they’re due.  Many people pay a bill as soon as it comes in the mail.  Pay bills about a week before they’re due.  This gives time for the payment to arrive and avoid a late fee, but can often push it into the next pay check for you. 

–  Put off discretionary purchases.  If you can go an extra couple of weeks until the next hair cut, manicure, or poker night (unless you usually win), do it.

–  Eat at home instead of eating out.  That also means you can skip the $4 cups of coffee for a couple of weeks.

Year End Tips

We’ll finish up the year with a few tips over the next week and a half with some ideas to help you get through the year working on your financial well being.

“In Kind” Charity Donations

Clean out your closet and take what you’re not using/wearing/playing with to a non-profit thrift store.  I don’t mean a consignment store.  I mean one that sells your “gently used items” and gets to keep the money.  Goodwill and Salvation Army are in most communities, but also many churches, homeless shelters, and safehouses have these thrift stores, soo.  Either make a list of the items or take some pictures that you can attach to a receipt.  Don’t just drop the items at a drop box, go to a manned collection site and get a receipt.  Than attach your list or pictures of items.  Before you give your tax documents to your tax preparer next year, find out what source he/she uses to value used items.  Total that up and include it with your tax documents.  If you can itemize, you’ll get a better deduction with the excellent documentation.  Someone needs those items and will appreciate that you gave them.  Also, you get a clean closet! 

Naughty or Nice

In flipping channels the other night I saw an entertainment show report that they’d surveyed some children to find out who would top Santa’s list of Naughty Folks.  Britney Spears and Paris Hilton were at the top.  Everyone makes mistakes and a trusted mentor once said to me, “Feel free to learn from the mistakes of others.  Don’t feel you have to have to make them all yourself.”  So rather than harp on these already over-harped-on celebs, let’s look at a few lessons we can all learn from their over publicized errors.

         Know how much you spend and be sure it’s less than you make.  No matter how large your income, expenses will grow to exceed that amount if you don’t watch out.  So be sure that you save 10% of everything that comes in, keep some extra in reserve for taxes and emergencies, and cut back your lifestyle until you can live on the rest.

         Money can’t solve all problems – especially if a courtroom is involved.  Excellent legal representation is still going to be stuck with the facts of a case and the law that governs.  And sometimes that means that a judge or jury might nor rule the way you might want them to.  (That goes for legal issues other than driving infractions and child custody.)  

         The friends and attention that money can bring are sometimes very fickle.  Some of the people who support you when you’re on top are either not to be found or they’re the ones to throw the first stone when you’re down.  The solution to this is often being a little less public about having money.  Sad, but true.

In the spirit of the season, let’s all give a clean slate to all the folks who’ve had their mistakes and mishaps make big news in 2007 and wish them well in 2008. 

Holiday Financial Compromises

The spirit of giving during the holidays can sometimes get out of control and have you giving more than you can afford.  There are some shopping and giving strategies that can maximize your generosity without overdoing it financially.

1 – Make a list of everyone you want to give to, the maximum you’d like to spend on that person, and two or three gift ideas in that price range. 

2 – Look online and in the newspaper for where your target gift items are.  Make a note if it looks like they’re on sale at a particular store.

3 – Don’t go shopping without your list.  Check off each person as you’ve got them covered.

4 – If you have time to make some items, do that.  Lots of people love baked goods and personally made crafts.

5 – Consider some “personal service” gift certificates.  For instance, give someone a gift certificate for a home cooked dinner, being their valet for a week (picking up dry cleaning, shopping, etc.), or fixing some items in their home. 

The people you love and want to give gifts to during the holidays don’t want you putting yourself in financial hard times.  Don’t let yourself slip into that holiday trap. 

Holiday Financial Lessons for Kids

Too often the holidays are the time of year when any hope of financial discipline flies out the window.  You can change that and actually turn it into a teaching opportunity for you and your kids.  Here are a few tips.

Don’t let the kids expect to get everything they want.  Let them make a list and let them know they may get items on the list, but not everything there. 

When the kids are old enough, you can tell them what the gift budget is for them.  “Old enough” usually means that they know that Mom and Dad – not some mythical being – is the one who actually goes to the store, stands in line, and pulls out the checkbook at the register. 

Don’t forget those who are in need.  Kids of all ages should spend some time shopping for and delivering gifts to charities that distribute holiday gifts.  Your children should pick something they would love to have.  Them talk to them about how much the child who receives the gift will appreciate it.   (You can actually get a receipt from the charity and include it in your tax deductions, so everyone benefits!) 

Keep the holidays in perspective.  It will save you money and teach your kids more than just dollars and sense.