Archive for December, 2009

Goals Instead of Resolutions

Wednesday, December 30th, 2009

Are you tired of making resolutions every year and never making progress on them?  Well this year try something different make some goals instead of resolutions.  With goals you are much more likely to follow through and really accomplish something.

Goals that are SMART

To maximize your chances of achieving your goals, make them SMART:

  • Specific- Every financial goal should have a specific dollar amount.  Instead of a vague resolution like “I will save for retirement” be specific “I will save $5000 for retirement”.
  • Measurable – You need to have a way to gauge your progress, since your financial goals should have a number it is easy to measure the progress.  The progress percentage is the amount you have divided by your goal number multiplied by 100.
  • Attainable – A goal must be something you have control over- like investing a certain amount.  There is no point in setting goals on things beyond your control like getting a particular return on your investments.
  • Realistic – Your goals should be realistic so that you can stick with them- if you make them unrealistic you will most likely become discouraged and give up on them.
  • Timely – The difference between a dream and a goal is that goals have deadlines!   It’s also helpful to break down goals into manageable pieces.  For example “I will save $5000 for retirement this year by investing $417 each month.”

I like to add two features to my goals- a reason for them and an at least clause.   The reason is there to remind me why I chose this goal, and to remind me why I should sacrifice to achieve it.  The at least clause opens up the possibility to accomplish more if circumstances allow.  An example financial goal is “I will save at least $5000 for retirement this year so that I have freedom to live as I want by investing a minimum of $417 each month.”

Merry Christmas

Friday, December 25th, 2009

Have a wonderful holiday!

Shop for the Cheapest Thing First!

Friday, December 25th, 2009

If you want to spend less shop for the cheapest items first!  I found this advice from Robert B. Cialdini, Ph.D. in Influence: The Psychology of Persuasion (Collins Business Essentials) surprising, why should the order matter?  It turns out our perceptions are colored by recent experiences.   If you start shopping for an expensive item first like a $1000 suit then paying $100 for a sweater seems very reasonable in comparison.  Therefore you are more willing to pay full price for the sweater.  However, if you start looking at the sweaters first you will negotiate or bargain hunt saving money on the sweater and when you shop for the suit it will seem even more expensive motivating you to really watch your money.  So do yourself a favor and shop for the cheapest things first!

Read This Post Because it Has Valuable Information

Friday, December 18th, 2009

Would you believe people are much more likely to agree to your requests if they contain the word because?   This was one of the many interesting findings from Influence: The Psychology of Persuasion (Collins Business Essentials) by Robert B. Cialdini, Ph.D.  Even more interesting is that the reason given doesn’t have to be valid.  People are more compliant when given ANY reason.   The example used in the book was a person asking to cut in line for copies.  Using the reason “because I need to make copies” was good enough to increase the chances people would agree!  It’s not even a reason since if you want to use a copier it is always to make copies!I really enjoyed this book and will be periodically sharing some of the influence tips and suggestions to counter them as many sales people will know the strategies that can separate you from your money.

Frugality Should be About Creativity

Monday, December 14th, 2009

When reading an article on get rich slowly about frugality it struck me that most of the comments assume that the only option for frugality is deprivation.   You can stick to your budget by denying your desires but aren’t there any better options?


In stead of closing the door with a statement like “I can’t afford it.” What if you ask a question like: “How can I afford it?” that opens up a whole new world of possibilities.  I heard a wonderful example from a podcast: A caller into the show told the story of how he loved sailing and was able to sail for free!   What he did was to provide his labor as a crewman for sailboat races.  This is a great example of a win-win situation- the captains have the boats and need sailors, the sailors want to sail but need boats to sail.  This is a very specific example, but there is a general principle.  Ask how could my desires also serve others?  Could this service fund my desires?

Finding the Core

The other key is to understand exactly what you love to do.  Say you love going out to dinner with friends.   Is it eating out or the interaction with friends that you really love?  If it is interacting with friends – you could substitute having friends over for a pot luck dinner.  The critical part, interacting with friends, is the same, but the bill is LOT less!  

Your Thoughts

Do you have any stories where you used creativity to make frugality work for you? Leave a comment to share them!

Wish Lists to Prevent Impulse Buying

Tuesday, December 1st, 2009

If you don’t see an item then you won’t be tempted to buy it.  Instead of browsing through all the deals at online retailers like ONLY browse your wish lists.  This strategy insures you can see deals on items you want and will ignore the rest.  It will also save you a lot of browsing time too.  Just be sure to limit your wish lists to things you really want.