What is Your Financial Strategy

                                                        

A resolution is defined as a resolve or determination, i.e. to make a firm resolve to do something; the act of resolving or determining upon an action or course of action, method, procedure; something resolved or determined; decision. A strategy is defined as a plan, method, or series of maneuvers for obtaining a specific goal or result. A financial strategy is a plan, method, or series of maneuvers for obtaining a specific financial goal or result.

Many people make New Year’s resolution and around February or March their resolutions have been forgotten.  When you make a resolution you are initially determined to do something, whatever that something is. I stopped making New Year’s resolution in 2010.  

When you make a strategy you have 4 actions that take place: 1) plan 2) assess 3) implement 4) evaluate.  You first identify a goal you want to achieve.  Then you create a plan on how you will achieve that goal.  You then assess the plan and make any necessary modifications.  You then implement the plan.  Once the plan is implemented you then evaluate your progress and identify lessons learned or ways to improve the next time you implement a strategy in the future.

The same applies with your finances. Many people are determined to do better with their finances. Many want to get out of debt, plan for retirement, create a budget, start saving or become a homeowner.  However, their frustration, lack of discipline and sacrifice outweighs their determination and they continue to practice bad money habits that cause havoc in their lives, in many instances resulting in physical ailments and personal challenges.

Finances can destroy relationships; result in divorce, arguments, sadness, depression, anxiety and fear. Finances have to be properly managed and can be used to generate wealth or can be used to generate debt.  

By creating a financial strategy you will be more determined to achieve specific financial goals because they will be things you want to achieve and need to achieve.  These financial goals should be things you can do throughout the year to improve your finances.

If you don't meet all of your financial goals develop smaller goals that can be easily achieved. Once you achieve those, develop larger financial goals and develop a course of action to achieve them. Track your progress.  I develop a roadmap each year that is broken down into 6 month increments. I develop goals and set a target date for each goal.  Later I develop a course of action on how to achieve those goals. If I don’t meet a goal I extend the deadline and add it to the next 6 month increment.

Ensure your financial goals are positive statements that will improve your finances. A financial goal should be similar to an affirmation, i.e. I will pay off my Visa bill by March 2013 instead of an uncertain or negative goal such as, I hope I can pay off my Visa bill by March 2013.  What is you think, write and say has power so be sure to write affirmative achievable statements that will result in a positive action.

Ask friends or relatives to provide support and encouragement to help you achieve your financial goals.  Purchase self-help motivation books or practice meditation or positive affirmations to help strengthen your confidence to ensure you achieve your financial goals.

Each year should be used an opportunity to correct any past financial mistakes.  Look at the big picture and how your financial goals will help you, your family or your overall life. Examine the long-terms benefits of your financial goals and focus on the benefits to increase your motivation.  If you believe you can achieve a financial goal you will.  Whatever your financial strategy is, the only thing stopping you from achieving it is you. Wishing you a prosperous 2013!

13 Financial Tips for 2013

Everyone makes resolutions for the New Year or make promises that they hope to keep.  However, I rarely hear people make resolutions about their finances. I am sure they are tons of people that do, I just never hear about it. I didn’t make any resolutions this New Year.  I made goals for myself which I do every year and set a target date for each one.  

Each year should be used an opportunity to correct any past mistakes, learn something new and make improvements in at least one area of your life.  Finances affects a large aspect of everyone’s life and should be given more attention.  Finances should be reviewed at least once a month.  If you are not good with your finances, consult a professional to help you map out financial goals and plan for retirement.  Here are 13 financial tips to help you improve your finances in 2013.

1. Change Your Mindset.  Change the way you think about money.  If you are determined to get out of debt and believe you will get out of debt, you will.  Throw away bad spending habits and recycle good ones that have been successful in helping you, your family or others.
2. Set financial goals for the year.  Plan how to accomplish each financial goal. Identify what is required to accomplish each goal, write it down and follow the plan.
3. Make adjustments. Make necessary lifestyle adjustments to help reach your financial goals.
4. Get insured. Make sure you have adequate health, auto, life, disability, homeowners’ and business insurance.
5. Save Money. Create an emergency fund with enough money to cover at least 9-12 months’ worth of monthly bills. This will prevent you from getting into debt.
6. Get Out of Debt. Get current on any late payments. Negotiate with creditors to setup payment plans and pay off old debts. This will help increase your credit score.
7. Trim Spending. Don’t spend more than you earn. Buy needs more often than wants. Find ways to reduce expenses. Reduce spending by 30-50%.
8. Limit Credit Card Usage. Use your credit card for emergencies only and avoid using your credit card regular purchases such as groceries and gas.  Keep credit card balances at 20% or less of the credit limit. Pay balances off at the end of each month.
9. Develop a Financial Plan (Budget). Write a list of your entire total monthly expenses including debt and write down your total monthly income after taxes. If you have any money left over use that to pay down your debts. If you do not have any money left over (at least 10% of your monthly income) look at the areas where you can reduce spending.
10. Develop What If Scenarios. List different scenarios that could happen and how you would deal with each one, i.e. job loss, sickness, death, new baby, loss of health insurance or other benefits, car repair, etc.
11. Have a Backup Plan. Have a Plan A, B, C, D and E.  Many people never plan for the unexpected. Always have multiple options to solve a problem or deal with a crisis. If you don’t have a plan, create one to address each possible scenario.
12. Go past retirement. Don't just plan for your retirement, plan for your children's retirement. Sometimes when planning for retirement retirees do not save enough money to cover all of their monthly expenses and end up going back to work after retirement. If you plan for your children's retirement or your grandchildren's college education this will ensure you have more than enough money to retire and enjoy your golden years.
13. Do better than your parents.  If you parents retired at 65 or had to work until they were 70 and had nothing to show for it, do better than your parents. If you retire at 55 be sure you have enough money to live on for at least 20 years. 

Say No to New Year's Resolutions

Everyone tries to make a New Year’s Resolution including myself. Somewhere around February we forget about that New Year’s Resolution and go back to whatever it was we were doing before the New Year. This year I am saying no to New Year’s Resolutions. This year I am creating a goals list of all the things I want to accomplish in 2012 with a target date and action steps for each. Your goals should include at a minimum health, finances, family, career, spirituality and relationships

This year make a decision to make at least one permanent change to become better in one area of your life. The key is to keep moving forward and practice that habit every day. Don’t beat yourself up too much if you forget to practice your new habit. If you forget one day, don’t worry, tomorrow is available for you to get back on track. Don’t look at your goals as negative; view them as positive things to improve your life.

Ask friends or relatives to provide support and encouragement for your new goals. Purchase self-help motivation books or practice meditation or positive affirmations to help strengthen your confidence to ensure you achieve your goals.

Look at the big picture and how your goals will help you, your family or your overall life. Examine the long-terms benefits of your goals and focus on the benefits to increase your motivation.

Don’t make unrealistic goals, however believe in yourself and write down all of your dreams and goals. If you believe you can achieve a goal you will. The only thing stopping your from achieving your goal is you. Wishing you much success in 2012!

New Year’s Resolutions for a Recession

Here are 7 tips help you survive the recession in 2009 and develop good money management skills so if another crisis occurs you will not feel the pain as much as you did in 2008.

1. Admission. Admit you are in debt and stop charging! Face reality and make a plan to get out of debt. You can’t get out of debt doing the same things you did in 2008. You have to make a change. If you are in a lot of debt then you need to make some drastic changes. If you drive an expensive car consider selling your car and buying a used car with a smaller payment or no payment at all. Negotiate with creditors to setup payment plans to pay off debt.

2. You are Not the Jones. Don’t live above your means. Buy needs instead of buying wants. Don’t impulse shop or buy something based on how you feel (sad, happy, angry, mad, depressed). Shopping doesn’t make you feel better, it is a temporary feeling, when you get your credit card bill those happy feelings go away quickly. Find ways to reduce expenses to help pay down your debts. Catch public transportation or carpool to work. Buy items or sale, buy used instead of new, use coupons, or shop at wholesales or thrift stores.

3. Be Responsible. Because of the bailout things have changed and creditors are looking for any reason to identify someone as risk. It doesn’t matter what your previous payment history has been. Only use your credit card for emergencies only. Don't use your credit card to purchase gas, food or other everyday items. Keep credit card balances at 30% or below the credit limit. Pay balances off at the end of the month.

4. Track Spending. Write a list of all of your total monthly expenses including debt and write down your total monthly income (net). If you have any money left over use that to pay down your debts. If you do not have any money left over look at the areas where you can reduce expenses. Use paper and pen, and a tool like Microsoft Money or Quicken or use the envelope method.

5. Save. Save. Save. I cannot emphasize this enough. Create an emergency fund with enough to cover at least 6-8 months worth of bills. This will prevent you from getting into debt. For long-term goals begin planning for retirement or increase your allotment for retirement. You should save at least 10-20% each month towards retirement.

6. Education. Further your education by taking training classes, get a college degree or an advanced degree to increase your skills set and salary. Plan to take at least one training course every year during your career to stay current with industry standards and technology advances.

7. Financial Planning. Get health, life and disability insurance. Also, create a will even if you don’t feel you have anything of value, but someone else might be eyeing something you possess. Your will can ensure that all your possession are distributed properly to your heirs. You should also consider getting a trust. Store copies of your financial and insurance papers in a fireproof and waterproof safe. Make copies of all of your credit cards, insurance papers, mortgage and creditors bills and store in your safe.

8 New Year's Commitments for 2008

Here are 8 New Year's Commitments that will improve your financial life, reduce stress, end fights regarding finances, and bring peace to your life.

1. Save Money - Create an emergency fund with enough to cover at least 3-6 months worth of bills. This will prevent you from getting into debt. For long-term goals create a savings account with a high interest rate and make plans to save for retirement.

2. Further Your Education - Take training classes or get a college degree to increase your skills set and salary. Plan to take at least one training course every year during your career to stay current with industry standards and technology advances.

3. Get Out of Debt – Get current on any late payments. Negotiate with creditors to setup payment plans and pay off debts older than 6 months. This will increase your credit score.

4. Get Your Financial House in Order – Organize financial papers and store in a centralized secure location. Backup financial documents and records saved on your personal computer. Use secure websites for processing transactions and storing personal information, i.e. bank accounts, automatic payments, etc. Organize your home office with file folders, file cabinets, etc. Make copies of all personal documents and store in a fire proof safe. Develop a will and designate or update beneficiaries for life insurance policies.

5. Trim Spending - Don’t live above your means. Buy needs more often than wants. Find ways to reduce expenses to help pay down your debts. Catch public transportation or carpool to work. Buy items or sale, use coupons, or shop at wholesales or thrift stores.

6. Limit Credit Card Usage - Use your credit card for emergencies only. Don't use your credit card to purchase gas, food or other everyday items. Keep credit card balances at 40% or below the credit limit. Pay balances off at the end of the month.

7. Develop a Flexible Spending Plan - Write a list of all of your total monthly expenses including debt and write down your total monthly income (net). If you have any money left over use that to pay down your debts. If you do not have any money left over look at the areas where you can reduce expenses.

8. Don't go into debt at Christmas - Don’t overextend yourself buying gifts at Christmas, buy gifts throughout the year to limit credit card usage and help spread costs for gifts over a period time. Even starting shopping in November will reduce costs and stress felt when shopping in December.

Copyright © 2008 H.E. Freeman Enterprises