Monday, June 18, 2007

Personal Finance 101 Posts of the Day 6/18/07

Thursday, June 14, 2007

Monday, June 11, 2007

Personal Finance 101 Posts of the Day 6/11/07

  • Jane Chin talks about how couples manage their bank accounts.

Carnival of Personal Finance

So, for the first time I entered an article into a blog carnival...and it was accepted...and it was an Editor's Choice. Woo hoo, doing a happy dance. Check out all the great entries at Getting Green!

Sunday, June 10, 2007

Personal Finance 101 Posts of the Day 6/10/07

Friday, June 8, 2007

Personal Finance 101 Posts of the Day 6/8/07

Thursday, June 7, 2007

Personal Finance 101 Posts of the Day 6/7/07

Wednesday, June 6, 2007

Personal Finance 101 Posts of the Day 6/6/07

Tuesday, June 5, 2007

Financial Education in our Schools! We need it!

My Credit Group recently posted in support of adding a financial education requirement to our high school curriculum. It's a great read and here are my comments on the topic:

I’m right there with you. In fact, one of my long term goals is to start a non-profit with a mission of getting financial education into the curriculum. In the mean time, I’m in the progress of signing up to volunteer with a local non-profit which offers free financial literacy classes to children and teens. These people are our future. They need to learn how to balance a budget better than the current people running our country! :-)

Regarding Flexo’s point about what should be removed, I don’t think anything should be removed, this should just be added. In my school I had to take about 12 elective classes to get enough credits to graduate. So…make it 11 electives and make financial management a requirement. Nothing gets dropped and a great skill gets added. I’d also argue that the kids going to college need it just as much, if not more than ones not going to college because on campus they’re stopped every 10 feet and given a credit card and free t-shirt.

I meet with clients all the time who are 10 years out of school and *still* paying off that 2 am pizza craving.

Thanks for a great post!

Personal Finance 101 Posts of the Day 6/5/07

Saturday, June 2, 2007

How to effectively set and track goals

A thread on the recently established Get Rich Slowly forums got me thinking about goal setting so I thought I'd post my goal setting instructions and worksheet for those who might be interested. The worksheet is in excel and is hosted on the Personal Finance 101 website and you can dowload it from there for free. Let me know if you have any questions/comments.

Get the goal setting worksheet

Why set goals?

Setting goals is one of the most important things you can do to ensure financial success, but it is usually the last thing people think about. If you don't set goals, how do you know if you are actually being successful? If you are going to get to where you want to be in life, you have to know the path to take. Goals are your roadmap and if you set them up right, they will take you from point A to point Z with as few detours and as little pain as possible.

How to set goals

The key to goal setting is to make your goals concrete and measurable and to make meeting them automatic. By this I mean, your goal should have a date and amount associated with it. You don't just say “I want to pay down my debt.” You say "I want to reduce my debt by $5,000 over the next 12 months." By giving yourself a set $ amount and date to meet, you will be able to judge whether you are actually meeting your goals or not and make adjustments accordingly.

By making it automatic, I mean using technology to your advantage. Set up automatic payments for all of your bills so that you are never late. Set up an automatic deduction from your pay check that goes directly to your savings account so that you are paying yourself first and will be less likely to spend the money instead of saving it.

Just doing those two things 1) Making your goals concrete and 2) Making them automatic, will drastically increase your chances of success.

The timeline

Goals can be divided into 3 categories: Short-term, Mid-term and Long-term. Short-term goals are goals that will be completed within the next 12 months. Mid-term goals are ones that will be completed within the next 1-7 years. Long-term goals are goals that will be completed 7+ years from now. Some examples could be:

Short term – establish emergency fund of $1000

Mid-term – pay off consumer debt within 3 years

Long-term – have enough for retirement

One of the biggest challenges is being realistic! If you only make $40k/year, it won’t really do you much good to set goals that will cost you $20k/year to meet. Be honest with yourself about what you can do. If you find that you are ahead of your timeline for meeting your goal, you can always add another one or meet your goal early but if you find that you are behind, it can be disheartening and cause you to give up all together.

The process

As I mentioned above, to set your goals you have to set specific criteria as well as an action plan. If you open the accompanying excel workbook and click on the Goal Summary tab you'll see that I have taken the liberty of filling in some goals for you that should be on everyone’s list. Remember, that your goals don’t all have to be responsible. Your goal can be to buy a new TV or to go on a vacation. As long as you are meeting the core responsible goals, there is nothing wrong with enjoying your life and money. Setting a goal plan just means that you will be more likely to meet all of your goals without having to scramble and sacrifice something else that is important.

For your goals, fill out the following information for each goal:

  1. Goal Name
  2. Start Date
  3. End Date
  4. $ Needed
  5. First Step

If you are married or in a similar relationship, you should do this with your partner.

Once you have set at a few goals in each category, print out that page and put it somewhere you will see it every day. It will remind you of what you are working towards and keep you on the right path. I would also suggest writing your most important goal on a sticky and attaching it to your credit card so you have to see it any time you want to use your card. That way you will know that every penny you spend on that card is a penny that is not taking you closer to your goal.

Make a plan

Now that you know what your goals are you need to plan how to meet them. In the same workbook is a tab called Detailed Goal. You should make as many copies of this as necessary – one for each goal. I would recommend re-naming the tab for each worksheet to reflect the name of your goal.

To develop your goal plan, you need to figure out what the steps are to meet your goals. The first step should be to implement whatever your automatic transaction will be. For example: if you want to buy a car in 5 years and you plan to spend $10,000 on that car, you can figure out that you will need to save $2,000/year or $167/month. So, your first step should be to set up an automatic transfer to your savings account for that amount per month. Since this is a longer-term goal, you should set up milestones so you can check back in to make sure that this goal is still a priority and you are still on track to meet it. I suggesting setting a milestone at least every year and preferably every 6 months. This allows you to take a minute to review your goals to make sure you're going the direction you want to go. Put your milestones on your calendar with reminders so you don't forget to check back in.

Implement your plan

So, you’ve gone through all the planning, now you just have to execute. The key to achieving your goals is to make them as easy to do as possible. This means making everything automatic. Set up all of your goals so that you don’t even have to think about them. Use auto bill pay and auto deductions to your savings/investment accounts. It takes a bit of time at first but it will be worth it in the long run.

Monitor/Add to your goals

Your goals are always going to be changing. You should keep adding goals as they come up. When you add a new goal, you have to look at your existing ones and figure out which is more important. It may be that your new goal is more important than one of the old ones so your old one gets pushed down the list. Look at your goal list as a fluid thing and don’t try to be too rigid with it. There is nothing wrong with reprioritizing as thing change.

How to manage your goal money

Everyone has a different method. It all depends on how much time/effort you want to put into it. Personally, I'm a fan of lazy accounting so I use ING for my goal savings accounts. I like the fact that with ING I can set up multiple sub-accounts and name them whatever I want. So I can have a car account and a vacation account and a furniture account, all separate, so I can tell at a glance how much money I've put towards each goal. It' makes things very easy for me and if you dislike book keeping as much as I do, this method may work for you as well.

Good luck with your goals. Just the fact that you're thinking about them puts you one step closer to success.

Personal Finance 101 Posts of the Day 6/2/07

Thursday, May 31, 2007

Personal Finance 101 Posts of the Day 5/31/07

Couples and Money Survey

As part of the research and development process for my new Personal Finance 101 - Couples and Money class I am conducting a survey of people in relationships. I would appreciate it if you would take a few minutes and give me your experience on handling money with your partner. Thanks in advance for your help.

Take the survey

Wednesday, May 30, 2007

Tuesday, May 29, 2007

Personal Finance 101 Posts of the Day 5/29/07

In search of... Can you help?

*Note: This post is a sticky, there are newer posts below*

I have 3 projects I need help with and I'm hoping one of you might be able to help.

1 - I'm looking for a writer for an e-book. I have a series of financial e-books I want to publish and need someone to translate my thoughts and words to paper. If you or someone you know would be interested, please visit my website for details about what I'm looking for.

2 - I'm looking to expand my public speaking resume so if you know of any groups/non-profits/associations in the Metro Portland, OR area who would be interested in having me do a pro-bono presentation, please contact me at mandy@personalfinance101.org.

3 - I'm looking for couples to interview about their money habits. Couples of any sort: married, living together, same sex, whatever. This is research for development of a new class aimed at teaching couples to talk/work together to establish good personal finance habits. If you would be interested in participating, please contact me at mandy@personalfinance101.org.

Feel free to spread the word.

Thanks!

Monday, May 28, 2007

Personal Finance 101 Posts of the Day 5/28/07

Sunday, May 27, 2007

Personal Finance 101 Posts of the Day 5/27/07

Saturday, May 26, 2007

Personal Finance 101 Posts of the Day 5/26/07

Friday, May 25, 2007

Personal Finance 101 Posts of the Day 5/25/07

What words/emotions do you associate with money/finance?

I have received the first 119 responses to my survey about couples and money and the results are interesting so far. One of the things that really stood out is the question where people list the 5 words that they associate with money/finance. Seeing how others view money in always an eye opener. I'll post the full results once I've had a chance to play the numbers, but here is a glimpse. (If you don't want or don't qualify to fill out the survey, leave your 5 words here in the comments.)

Note:

  • Several people used security and stress more than once in their answer
  • Several people included contrary words (fear and happiness) in their answers
  • I combined words that are substantially similar (ex: happy/happiness or stress/stressful)
Question: Which are the top 5 emotions/words you associate with money?

In order of most mentioned:

31
security
17
freedom
17
stress
14
fear
14
happiness
9
power
8
fun
8
worry
6
frustrating
6
greed
6
necessity
6
safety
5
comfort
5
excitement
5
Independance
5
joy
5
stability
5
time consuming
5
work
4
flexibility
4
hope
4
important
4
invest
4
luxury
4
relief
4
savings
3
anger
3
anxiety
3
challenging
3
debt
3
dread
3
enjoy
3
future
3
generosity
3
guilt
3
hate
3
opportunity
3
Peace of mind
3
responsibility
3
sadness
3
spending
3
tool
2
annoyance
2
caution
2
confidence
2
confusing
2
content
2
control
2
Enough
2
Envy
2
house
2
jealousy
2
Living
2
needs
2
never enough
2
options
2
patience
2
Peace
2
planning
2
reward
2
satisfaction
2
Scary
2
status
2
Success
2
travel
2
wants vs. needs
2
wealth
1
"make more, spend more"
1
Abundance
1
acheivement
1
Addictive
1
adventure
1
always feels like I'm doing something underhanded when I want to buy something that isnt a 'necessity'
1
ARRGH
1
aspirations
1
asset
1
assurance
1
backup
1
bills
1
bit-by-bit
1
boring
1
Broke
1
budget
1
Burden
1
can we.
1
car
1
choices
1
cold
1
conflict
1
controversial
1
Create memories
1
credit
1
deadlines
1
decent life
1
demise
1
depression
1
desire
1
Difficult
1
disappointment
1
dispair
1
Distrust
1
divisive
1
dollars
1
dreams
1
Drowning
1
drudgery
1
ehh?
1
embarassment
1
emergency
1
empowerment
1
enabler
1
evil
1
ex wife
1
food
1
Frightening
1
Fulfilling
1
Fundamental to lifestyle
1
goals
1
Good
1
Grease
1
groan....
1
Growth
1
hard to learn about
1
hassle
1
havingness
1
headache
1
Helpful.
1
I dont associate emotion with money it is simply something you need a certain amount of to live a certain lifestyle
1
I'm pretty emtionless about it at this point, but that's because I've conquered the FEAR.
1
inflation
1
insecurity
1
insincerity
1
it's-only-money
1
legacy
1
leisure
1
Logic
1
love
1
Major frustration in my life and that of my wifes life.
1
Management
1
market
1
more
1
My time's more valuable than my money. We have plenty.
1
no worries
1
None
1
none of it is emotional
1
now what??
1
numbers
1
obligation
1
Obsessiveness
1
open
1
optimistic
1
over-emphasized
1
over-rated
1
overspending
1
Pain
1
pain in the ass because we are always struggling
1
Partnership
1
passion
1
philanthropy
1
pity
1
Pleasure
1
poor
1
positiviy
1
possibilities
1
Potential
1
preferable future
1
pressure
1
Pride
1
priority
1
protection
1
quality of life
1
question
1
regret
1
Required
1
resource
1
respect
1
retirement
1
rich
1
righteous
1
rip-off
1
root of all evil
1
secrecy
1
self-assured
1
self-control
1
Sensitive
1
speculation
1
stewardship
1
survival
1
sweet
1
taxes
1
tedious
1
tentative
1
the Future
1
the root of all evil
1
thief
1
This recently changed from emotions such as fear and dread to empowerment and security.
1
thrifty
1
Tough
1
tricky
1
ugg...
1
useful
1
value
1
want
1
We don't need a lot of "stuff" so we don't need a lot of money.
1
weight
1
well-being
1
Without direction

In alphabetical order:

1
"make more, spend more"
1
Abundance
1
acheivement
1
Addictive
1
adventure
1
always feels like I'm doing something underhanded when I want to buy something that isnt a 'necessity'
3
anger
2
annoyance
3
anxiety
1
ARRGH
1
aspirations
1
asset
1
assurance
1
backup
1
bills
1
bit-by-bit
1
boring
1
Broke
1
budget
1
Burden
1
can we.
1
car
2
caution
3
challenging
1
choices
1
cold
5
comfort
2
confidence
1
conflict
2
confusing
2
content
2
control
1
controversial
1
Create memories
1
credit
1
deadlines
3
debt
1
decent life
1
demise
1
depression
1
desire
1
Difficult
1
disappointment
1
dispair
1
Distrust
1
divisive
1
dollars
3
dread
1
dreams
1
Drowning
1
drudgery
1
ehh?
1
embarassment
1
emergency
1
empowerment
1
enabler
3
enjoy
2
Enough
2
Envy
1
evil
1
ex wife
5
excitement
14
fear
4
flexibility
1
food
17
freedom
1
Frightening
6
frustrating
1
Fulfilling
8
fun
1
Fundamental to lifestyle
3
future
3
generosity
1
goals
1
Good
1
Grease
6
greed
1
groan....
1
Growth
3
guilt
14
happiness
1
hard to learn about
1
hassle
3
hate
1
havingness
1
headache
1
Helpful.
4
hope
2
house
1
I dont associate emotion with money it is simply something you need a certain amount of to live a certain lifestyle
1
I'm pretty emtionless about it at this point, but that's because I've conquered the FEAR.
4
important
5
Independance
1
inflation
1
insecurity
1
insincerity
4
invest
1
it's-only-money
2
jealousy
5
joy
1
legacy
1
leisure
2
Living
1
Logic
1
love
4
luxury
1
Major frustration in my life and that of my wifes life.
1
Management
1
market
1
more
1
My time's more valuable than my money. We have plenty.
6
necessity
2
needs
2
never enough
1
no worries
1
None
1
none of it is emotional
1
now what??
1
numbers
1
obligation
1
Obsessiveness
1
open
3
opportunity
1
optimistic
2
options
1
over-emphasized
1
over-rated
1
overspending
1
Pain
1
pain in the ass because we are always struggling
1
Partnership
1
passion
2
patience
2
Peace
3
Peace of mind
1
philanthropy
1
pity
2
planning
1
Pleasure
1
poor
1
positiviy
1
possibilities
1
Potential
9
power
1
preferable future
1
pressure
1
Pride
1
priority
1
protection
1
quality of life
1
question
1
regret
4
relief
1
Required
1
resource
1
respect
3
responsibility
1
retirement
2
reward
1
rich
1
righteous
1
rip-off
1
root of all evil
3
sadness
6
safety
2
satisfaction
4
savings
2
Scary
1
secrecy
31
security
1
self-assured
1
self-control
1
Sensitive
1
speculation
3
spending
5
stability
2
status
1
stewardship
17
stress
2
Success
1
survival
1
sweet
1
taxes
1
tedious
1
tentative
1
the Future
1
the root of all evil
1
thief
1
This recently changed from emotions such as fear and dread to empowerment and security.
1
thrifty
5
time consuming
3
tool
1
Tough
2
travel
1
tricky
1
ugg...
1
useful
1
value
1
want
2
wants vs. needs
1
We don't need a lot of "stuff" so we don't need a lot of money.
2
wealth
1
weight
1
well-being
1
Without direction
5
work
8
worry