Tag Archives: New Years resolutions

Gift Cards and Easing Into New Year’s Resolutions

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There’s a good chance you were on the receiving end of some gift cards this Christmas. With billions of dollars sold,  you need to make sure you actually redeem them. Over 8% aren’t ever used – great for the merchant to get the free money – not so good for you.

The best tip is to get a felt pen and write the amount on them. Then tape them on the fridge, put them in your wallet, or any place prominent so you won’t forget. Remember that you have an IOU and that’s only good as long as the store or chain is still in business. If it’s Tim’s or Walmart – not a rush. But, the smaller the store, the quicker you want to use them up.

If you don’t use the full amount, write what’s left on the card as well. If it’s down to very little, do what I do: Just hand it to the person behind you in line and tell them what’s left on the card. That way they can redeem it right then and there.

Today and tomorrow, it’s likely everybody will make their New Year’s resolutions. But studies keep showing half of them are toast by the middle of January. News flash: You won’t run a marathon this summer, lose 60 pounds by April, or become debt free next Tuesday.

So perhaps you can resist the pressure to set New Year’s resolutions that are destined to fail. How about you do a two-month test drive on some smaller ones? If they’re specific, in writing, measurable and short-term, there’s a much better chance you’ll keep them.

Want to save some money? How about just taking the $200 or whatever you want to save each month and taking it right out of your ATM the 1st of January? Put it under your mattress or wherever. Do it for two months and you’ll see that you really won’t miss it. Good chance you’ll keep that two month trial going….

Can you take your smallest debt, perhaps one of your credit cards, and pay it off by March 31st? It’s the smallest, so no need to freak out or sell everything on Kajijji. If that worked out – great! That bill is now gone – permanently. Since your subconscious mind now knows you can do this, take the next smallest. It might take three or six months, but it’s just one debt, just one payment – you know you can do this, too.

Want to save some serious money for the next two months? Can you avoid restaurants or bars for 60 days? Of course you can – but will you? We average $190 on those each month. There’s around $400 or more by figuring out how stuff in your fridge turns into food, instead of having others make that happen for you.

Test drive some small ideas for two month. It takes 21 days to form a new habit. 60 days is long enough to see if you’ll stick to it for longer. No pressure…it’s just you and your money, debts, and disposable income. Happy New Year!

PS: Just saw a great Facebook post: I’m opening a gym called “resolutions.” It’ll have fitness equipment for the first two weeks and then it’ll turn into a bar for the rest of the year.

 

 

 

Wishful thinking versus goal setting. One is a hope and a dream that someday, something will change. Goal setting is in writing, specific and measurable.

I love my GPS. I travel a lot and can’t imagine life without it. But I can punch in all the destinations in the world, it won’t work if I don’t first know where I’m at! That’s the same with your financial goals.

 

If you’re not willing to take the 20 minutes to write down…don’t bother – you’ll just be staying in “hope” land. It would be kind of like firing a gun into the air and hoping a duck will run into its path.

Happy 2022 – Financially Speaking

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The good news: It’s a new year! The chance to start over, to resolve to do better, to do more, or in the case of your payments and all that interest – to do a lot less.

The bad news? You’re already broke! How is that? Well, our debts are more than 173% of our disposable income now, half of us have no savings at all (thanks in large part to the never-ending pandemic but now-ended government support), and almost 70% of us don’t make RRSP contributions. Why? Because every dollar we earn goes to make a long list of lenders really rich and there’s simply nothing left at the end of the month.

So when it comes to making some commitments about our debt, credit and all those bills, perhaps we should think small to make sure we set ourselves up for a win, and not a sure-fire let-down. But small doesn’t mean pointless, small just means some little steps you can actually keep, that’ll pay off big for 2022. These five are over and above the chapter in the Money Tools & Rules book “Do you have half an hour” – small things that you can change immediately:

 First – Annual bills kill your budget, but they’re not surprises. We know they’re coming – but we haven’t got the money to pay them. If it doesn’t cost you a bunch of interest or fees, set them up on a monthly payment plan. Whether it’s your property tax, car or home insurance, a monthly payment plan is a whole lot less painful than paying them by credit card or off your line of credit over the next few years.

 Second – Set yourself a credit limit. Pick a dollar figure below which you’ll pay by debit card or cash. Maybe $20 or $30 bucks – that’s it. But anything below that, you’ll spend with real money, instead of running up debts. It’ll become a great habit and will cut down your credit card balance in huge ways. After all, look at your statement. Almost all the charges are for pretty mickey mouse amounts that add up in huge debts – twenty bucks at a time..

 Third – Keep your vehicle for another year. If you believe a cool car is a status symbol and a must-have, you’re doomed to be in debt for decades to come. Not to mention that almost 50% of people trade their vehicle and STILL owe more than it’s worth – that’s financial suicide. The goal should be to drive a reliable vehicle that doesn’t have payments with it . Imagine a couple of years without car payments and the huge financial advantage you’ll create for yourself. And remember: Those $400 car payments are really over $600 in gross earnings. If you can’t get a $600 raise – here’s a way to get it – you’ll just be giving it to yourself!

 Fourth – Close your overdraft. I know – it’s like being hooked on drugs. It’s so convenient and always there and you can’t live without it any more. Well, that’s what the banks were counting on, and where they make a huge amount of their profit. But it’s killing you. Just a $1,000 overdraft will cost you between $200 and $300 in interest and fees. It’s a one-time pain to cancel the overdraft, but it’s worth it. Then zero in your account is actually zero instead of minus $1,000 or more.

 Fifth – Change to a credit card that isn’t a credit card.
For those with a card balance, it isn’t the $600 charges, it’s the dozens of $20 or $30 charges that really add up. Sure, you want to pay it off, but it isn’t a priority each month and you keep sinking deeper into debt at 20% plus. Get yourself an American Express Green card. That’s not a credit card – it’s a charge card. At the end of the month, there are no payments to make – the balance has to be paid off in full. Oh sure, the first month that’ll be painful. But after that, you’ll watch what you’re charging pretty carefully, and you’ll never ever have a credit card balance again. What’s that kind of financial freedom worth in knowing for a fact you will never have a credit card balance again?

And maybe you can have a detox for January? How about no shopping of anything for any reason that isn’t an absolute necessity such as food and gas?

Happy New Year…But…

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Sadly, as of last week, over 25 percent of resolutions have already gone by the wayside. But I have an idea and a way out of that: Think of January as a free trial month. You get that with some subscriptions, perhaps with a fitness club trial and other offers. So learn the lesson and start again on February 1st with your financial goals!

Make sure that your financial to-do and to-resolve list starts with something really simple, really short, but also really critical. It’s an entire chapter in the Money Tools book called: Do you have a half hour?

Yes, you do have it – but do you want to invest that half hour into getting some of your financial stuff in order for at least the coming year?

First thing is to have a coffee date with your partner if you are in a relationship. If you’re not on the same wave length – nothing else really matters. Talk about your financial goals and hurdles for at least this year.

Do you want a $10,000 vacation? If you don’t have it set aside, what’s the plan to save $800 a month if it’s next winter, or save $1,500 a month if it’s this summer.

Want to just charge it on a credit card? That’s your choice if you and your partner agree…but at a 20% rate it’ll be $20,000 in total price in four years. I think that’s a horrible idea, but it’s your choice IF you agree and IF you know what you’re getting into.

Is there one specific debt want to pay off? Do you agree it’s worth it and which one? How important is it to you two? What will you do or give up to achieve it?

If you’re a home owner, and your mortgage is coming up for renewal, are you planning to stay in town, in the home, in your job? What’s the longer term life plan…..because you don’t want to sign another five-year mortgage if you haven’t talked it through, or your penalties will be upwards of $20,000 if you change your mind!

Open a TFSA or RRSP: If you don’t have one – it takes less than half an hour with an online brokerage or your financial institution – that’s it. If your tax refund or other money comes in you have a way to invest it. If you don’t – that money is most likely going to leak out elsewhere.

Open an emergency savings account: You want a basic one week net pay to start. Not hooked to an ATM. But you first need the 15 minute to just open it and put 10 bucks in it. That’s a start – and the longest journey always starts with that first step!

It lets you get traction…because without it you’re not going anywhere…

The Government Financial Resolutions You Didn’t Get

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Prime Minister Trudeau just gave his New Year’s message that us Canadians should focus on “key values” for the New Year. OK, that’s nice and vanilla, but there was nothing on maybe some government resolutions on financial issues. Since it was missing, here’s what I’d want the PM, and probably all governments, to commit to:

If you’re one of the many people who are waiting for the government to fix your life – sorry – we can’t and we won’t. You need to get off the sofa and start fixing your own economy – the government makes a lot of feel-good promises, but we can’t fix it for you.

We’re going to commit to using the rule of doctors: First, do no harm. That means we’re going to fix the punishing new mortgage rules that will make it really hard for the average Canadian to sell their home or to buy one – even with 20% or more down-payments.

From now on, the government will become better stewards of your tax money. You send us a lot of it. Not just off your pay, but in GST, gas taxes, EI, CPP, and places you don’t even know about. We’re going to start treating it as if it were our personal money. No more throwing cheques at small but vocal special interest groups that yell a lot, or who we want to bribe to get their votes again.

We’re also not going to just hand out money as if it were candy anymore. Sorry about giving $10.5 million to a terrorist – tax free. If we need to settle claims, we’ll do it after a court orders us to.

Lastly, we’re going to stop lying or fudging the numbers. Sure we promised we’d “only” be overspending $10 billion and it became $40 billion.

Yes, I promised we’d have a balanced budget before the next election in 2019. Yes, two days before Christmas when nobody noticed, my finance department released a report showing we would be in deficit spending until at least 2055. Yes, the damage we’ve done will last an extra 36 years just to not overspend each year. We’ve seen the light, and our New Year’s resolution is to tell you the truth, and to actually start making the hard choices – just like each and every family has to make, and to live within a budget.

When pigs fly…..

Four One-Off Financial Tips You Should Test Drive

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Last week we started talking about some financial goals for 2015. All of them are meant to be specific, measurable, and easy to get started – if you choose to. Last week’s were half hour, tops. Here are a few more suggestions that are one-offs to kind of test drive. All of these will have a significant impact on your finances for this year, and years to come.

Do a seven day no-spending week. We talked about that a few years ago, and I did it for two weeks – twice. I’ll link the story from back then, all of which are always on the yourmoneybook.com site. Essentially, gas up, fill up the fridge, and then spend no money at all for seven days. Pay your normal bills, but nothing else. I learned a ton about where my money leaks out. It’s well worth it, and not hard to do for just a week.  http://moneybookcdn.myblogspace.ca/?p=35

Try an envelope system for any 30-day period. Take the amount of money that you will need for groceries, and for money you spend on yourself for stuff like haircuts, coffee, lunch out, and the likes. Take two envelopes and put that amount of cash into the envelopes. For that one month, you’re only spending on groceries and “me” stuff out of those envelopes, in cash. You’ll learn a lot about yourself and your spending habits. And when the envelope is empty – you’re done spending – and you’ll spend way less than you have been.

Put all your credit cards away for 30 days. No, I’m not asking you to stop breathing. I’m just asking you to see if you can break your stupid spending habits and addiction to credit cards – just for a month. Take your cards, put them in a plastic Ziploc bag, add some water, and put them in the freezer. Or put them in a sealed envelope and give them to a friend or relative that you trust. You’ll be amazed that you’ll spend a lot less money in that month. Plus, your credit card balance will love you for it.

Write down a list of all your debts from the smallest balance to the largest amount, in order. Pay minimum payments on everything but the smallest bill and attack that one with every dollar you can spare. Because it’s the smallest debt, it’ll take only a few months to pay that off in full. Then you’ve freed up all that money to attack the next smallest. It’s a debt snowball that gets traction really quickly. It really is that simple, and it’s a chapter in the It’s Your Money book.

Happy New Year – But Will This Year Be Any Different?

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If you haven’t made many or any New Year’s resolutions – congratulations. There’s a good chance that those who have, are half way done breaking them in the first week anyway. It’s a bad time to make them based on societal pressure. But you do need some goals, at least for your financial life.

Write down some financial goals for this year. Whether you start them this week or next month is up to you. They’re goals and a game plan and not throw-away New Year’s resolutions. However, your goals have to be in writing. To paraphrase a quote from Larry Wiget: Nobody ever wrote down a plan to be broke, overweight, or lazy. Those things are what happens when you do not have a plan.

This year, write at least five benefits with each -that’s the part which will motivate you to stay on track. For instance, if your goal is to be credit card debt free, it’ll be pretty easy to come up with five huge benefits that’ll come as a result: No more monthly payments, it’ll be like getting a $300 raise in not making those payments. It’ll save you x amount of interest a month. It’ll boost your credit rating that’ll get you lower interest rates on other borrowing, frees up all that money to now go into savings or towards another debt that’ll get cleared off a lot faster now. That’s six easy blessings right there.

Things only change when you change, and not when the year and the calendar changes.

A huge 2014 gift to give to yourself is to set up a savings account for your annual bills: Add up your property tax, insurance, what you spend on Christmas, your vacation and whatever bills you only have once a year. Have your credit union take one-twelfth of it out of your chequing account automatically and transfer it to this new savings account. You can’t imagine how much financial and debt stress that’ll relieve when you’ve always got the money for these.

The gift of not being stupid and thinking before buying or signing: That so-called free cell phone is over $1,000 when you’re forced into a two-year contract. Get a free TV if you just sign this three year contract. Stop and think that the ad should say: Get a $290 TV when you spend over $3,000.

A gift that will keep on giving for more than 60 years: Teaching your kids about money and savings. But it’s about what you do, not what you say. Start today away and give them three jars or piggybanks: Whatever money the receive goes equally into the three jars: One for saving, one for giving, and one for spending. As they get older you can change the distribution, but start somewhere and sometime soon!

You’ll only achieve your goals if you have a written and specific plan, and if your drive to achieve these goals is stronger than your excuses or thoughts of failure.

What I wish you for 2014 is that you choose to opt out of the North American way of life: Spending money you don’t have, buying stuff you can’t afford, to impress people you don’t really like.

More of Getting Financially Fit for 2013

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Last week I promised that we’d talk about some specific small steps you can take to change your finances around. Why small steps? If it’s too big, your sub-conscious mind will revolt against huge goals which seem impossible to reach.

You’re not going to lose 60 lbs, but you can lose a pound a week. You won’t run the marathon this summer, but you can go for a 15 minute walk each day. You also won’t be debt free by March, but you can start on that journey with one step at a time.

Resolve to say no: Whether it’s to yourself when it comes to spending, to your kids, people at work, or anywhere else. It’s the one word that’ll change your financial life and overspending.

Set yourself a credit limit for the next month. Pick a dollar figure below which you’ll pay by debit card or cash. Maybe $20 or $30 bucks – that’s it. Anything below that, you’ll pay with real money, instead of running up debts. It’ll become a great habit and will cut down your credit card balance in huge ways.

Take your credit cards out of your wallet for two weeks. You don’t need them just to go to work and home. That way the temptation and impulse spending is gone. Take a $20 bill and hide it in your wallet or purse for an emergency. If it’s really for an emergency you’ll still have it in there in six months. With credit cards we spend 12 to 18% more than paying by debit card or cash. When you don’t have them on you, you can’t overspend.

Keep your car for another year. If you believe a cool car is a status symbol and a must-have, you’re doomed to be in debt for decades to come. Not to mention that almost 50% of people trade their vehicle and STILL owe more than it’s worth. The goal should be to drive a reliable vehicle that doesn’t have payments with it, which are killing your chances to save, or to get ahead financially.

Annual bills kill your budget, but they’re not a surprise. You know they’re coming – but you don’t have the money to pay them. Open a savings account and add up what you’ll need for next years’ Christmas bills, your property tax and car or home insurance. Divide it by 12, and put that amount away monthly. A small amount each month is doable, a huge bill sets you back months.

Pay off one bill. Minimum payments buy you another month – nothing more, and it’s treading water. Credit cards and debts are not your friend. They’re financial dream killers, suck money out of your pocket, and add a ton of stress to your life and your relationship. Take your smallest bill and put every dollar you can towards it while paying minimum payments on everything else. When it’s gone, you know it’s not coming back. If you want – and you should – take the next smallest and focus only on it. This step-up plan will get you debt free in less than half the time. It’s an entire section of the It’s Your Money book and will change your financial life forever.

Test drive these six suggestions for the next two weeks or the rest of the month. It’s not overwhelming and it’ll be easier than you think. Then you can choose to carry on with some or all of them for another month. By that time, it’ll be habit and part of your life. If nothing else, at least resolve to make this the year where you spend more time planning your finances than your vacation.

Getting Financially Fit for 2013

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Happy New Year!

New Year’s resolutions don’t work most of the time because we tend to make them too big, too overwhelming and not specific enough. But when our resolutions don’t come true, it’s decision time: We can get back at it and try again, or just go back to that “what’s the use” mindset and deal with it again next year. If nothing changes – nothing changes.

I recently heard some feedback from a couple of people who were pretty disciplined in paying for Christmas shopping with cash – hurray! Unfortunately, they fell off the “cash only” wagon on Boxing day. Well, nothing happens in a straight line. One day of brain damage, or credit card damage, isn’t a reason to give up.

The good news: It’s a new year! It’s a chance to start over, to resolve to do better, to do more, or in the case of your payments and all that interest – to do a lot less.

The bad news? You’re already broke! How’d that happen? Well, we spend more than 160% of our disposable income. That means every dollar you’re going to earn this year is already spent and spoken for. If that isn’t sick enough, half of us have no savings, and almost 70% of us don’t even make RRSP contributions. Why? Because every dollar we earn goes to make a long list of lenders really really rich and there’s simply nothing left at the end of the month.

And for 2013, I wish you:

Three months of emergency savings
A debit card in your wallet and a credit card at home for emergencies
A zero balance line of credit
And being overdraft free