Pondering Money

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.”

Have a wonderful holiday!

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?

Creativity

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!

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 Amazon.com 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.

Happy Thanksgiving, I hope you have a lot to be thankful for today!  I’m going to take some time to try to appreciate all of the the people and things I have.-Rick

Save Money.  Live Better.   Good advice, right? Normally I would agree, but I bet the last time you read that was on a Walmart advertisement that all about you SPENDING not SAVING!   I’m sure you have seen dozens of adds proclaiming SAVE! in anticipation of Black Friday.  The truth is that making purchases at lower prices will only become savings when:

• You can sell the item for more then you paid for it.
• You were ready to buy at a higher price with cash.

The first case is extremely rare because most used items lose 50% of their value, still there are sometimes opportunities- just don’t forget to factor in the cost of your time to buy and sell the item!  If you fall into the second case- you decided on your own to make a  purchase, saved the cash needed for it, and just happened to find a better price.  Then you have real savings go for it!   Just be wary of the lure of the bigger/better version that will eat up all your savings!  In any other case don’t fool yourself you are really just spending more.   Before you part with your hard earned cash, ask yourself: Couldn’t I live better by keeping my old TV/DVD player/iPod and REALLY saving that money?