“We must all suffer one of two things: the pain of discipline or the pain of regret and disappointment”
– Jim Rohn
The recession of 2009 might seem like light years ago but we’ve been at this business long enough to know that this too shall pass. One of the things Dan and I have been students of is mastering finances. With tax season just over, you may be feeling pretty good about your financial situation and we hope you are.
But we do want to challenge all of our clients if you aren’t doing the hard work right now of disciplined finance accountability, start today! The younger you are, the more opportunity you have to secure a financial fortress in your old age.
Dave Ramsey suggests you take every penny hostage and give it a name before the month starts. Creating a working budget is key. In good times, we tend to let the pennies slip through the cracks which leaves you unable to act on opportunity during the down times. The best client success stories we have are those who boldly took advantage of the 2011 market with record low prices, interest rates and sky high inventory levels because they had the savings to do so. This year we watched some of them bank over 60% return on their investment when they sold this year. Being counter culture with your money will always benefit you in the long run.
If you have credit card or student loan debt, get very deliberate now to pay it off. Now is the time to get out of debt, live within your means, and save for the important things in your life. Yes, right now that you can make extra money and good times are rolling.
This month, we’re sharing a budget worksheet so you can start accounting for every penny that you spend. Then of course, the next step is to ask yourself where the slippage in your household expense is and then make cuts. When is the last time you’ve really scrutinized your phone or cable bills? What about those reoccurring charges on your credit card statements? Are you still using those services or do you even need them? Did you know that 25% of checks in restaurants mistakenly charge you for items you didn’t order? It’s time to start watching your pennies.
Interestingly enough, we are in the midst of a home makeover contest. All of the experts say, finance the remodel, put it on a home equity line (especially with rising values) or use your retirement savings. Personally, I think if you haven’t saved at least half of the cost of your remodeling project, you shouldn’t do it. Leveraging the other half of the cost is okay but we’ve been through 2 or 3 recessions in our professional career and had to hold the hand of clients who wiped out all savings and equity because they had to sell in a down market and were deeply leveraged.
If you’d like to sit down and talk about how to get your spending plan underway, we would love to share what we’ve learned. Learn the discipline of managing your finances. Email me for some scheduled time.