Down-to-Earth Finance

Paying with Credit is Like Eating the Whole Pizza

noreply@blogger.com ("My Money Matters" kit) — Mon, 10 Aug 2009 16:47:00 +0000

It seems that most of us know that we will spend less with cash. A recent MIT study found that subjects that were asked to bid on a basketball game, bid TWICE as high when they used credit cards, versus when they used cash. Not surprising. An easy to believe cash and credit card experiment. One way to look at it is that when you are using your credit card, you aren’t really aware of how much debt you have, so you figure, “Why not spend more?”. It’s like when you are dieting and you eat one piece of pizza. You then think, “Well I already messed up my diet today, I might as well have another piece of pizza and another piece of pizza.” Next thing you know, you ate the whole pizza pie! Ok maybe not the whole pie, but you definitely ate more pieces than you should have.

The point is that if you want to become more conscious of your spending and money, using cash is really one of the best ways. You really don’t want to eat the whole pizza pie do you?

Money Surprises: Good or Bad?

noreply@blogger.com ("My Money Matters" kit) — Thu, 06 Aug 2009 20:31:00 +0000

I had a huge revelation the other day regarding finances. We don’t always end up with the result we go after. The money success we end up achieving is not what we planned but is still a direct result of the action steps we take to towards controlling our money matters. I saw this recently with my SIMPLY MONEY class when women were sharing goals they had achieved that they NEVER thought they needed or thought they could handle. During the process of looking at their money EVERY WEEK, they unearthed a few very important goals.

Why Does It Happen?

Money has been compared to everything from Freddy Kruger to Six Flags Amusement Park. Do you see a theme here? FEAR!!!! Once you realize that you ARE smart and capable enough to master your own money independently – much of the fear fades away. Next thing you know, you aren’t scared to open your 401k statement or open the automatic savings account or even discuss expense ratios on your mutual fund.

Where there’s a WILL, there’s a way.

When I bring up the topic of wills, most people’s eyes glaze over. If they don’t have children, they assume that they don’t need one. Or they think they are going to live forever and not need one! Wrong on all counts. This was a big eye-opener for some women going through their financial check-up. Once they tackled their immediate needs, such as finding out their credit score, they were open to dealing with other areas of their money life such as drafting a will.

Everyone needs a will, regardless of their situation. The complexity of the will clearly changes based on your situation. If you have ANY savings, you want to be clear about who gets the savings when you are gone. What I have found is that once people learned a little more about wills, they realized they needed one and were motivated to get one – this was especially true of business owners and home owners. If you have children, you obviously need it. When you are drafting your will, don’t forget the living will and health care proxy. If your situation is fairly simple, you can buy a will kit at Staples or nolo.com. Just be sure to get it notarized with witnesses.

“I Discovered Mutual Funds”

Wouldn’t you like to be the person saying this? Again, some women signed up for SIMPLY MONEY just to feel better about their cash flow or get support around opening their 401k statement. Along the way, they learned about mutual funds, how to analyze them on Morningstar and how to figure out which ones they needed for their asset allocation. Believe it or not, they found they actually liked learning about mutual funds and were empowered by that knowledge. One woman even brought up no-load fees on a date and was impressed with how much she knew! They ended the class stating they “discovered mutual funds” and wanted to learn more.

The point of this is that by getting inserting money into your weekly life, you will unearth other money goals and see the effects ripple throughout. Try it. See how it fits. Who knows, you might like it?

Can I Use My Business Credit Card?

noreply@blogger.com ("My Money Matters" kit) — Tue, 04 Aug 2009 17:11:00 +0000

This is a great question I received from SINGLE EDITION.

Question:

I am dating a man who is always charging our meals onto his business credit card. I am wondering if this is legal and also if I should be offended by it?

Answer:

That is very money savvy of you to question the legality of using a business card for personal expenses. He could be using the card based on advice of his accountant or even paying the card off with personal funds. It is hard to say. However, you bring up the point of having open money conversations especially if you are getting serious with this fella. There is nothing wrong with asking him why he is using the business card. I wouldn't bring up the legal issue as it might make him defensive. Instead show him you are interested in his work and understanding the financial part. If he dismisses the question, it might be a warning sign about other areas of the relationship.

Budget Beauty Habit

noreply@blogger.com ("My Money Matters" kit) — Thu, 30 Jul 2009 15:24:00 +0000

If you color or highlight your hair, you can stretch visits between hair appointments by sticking to a color that is closer to your own. You will still have that shiny salon-styled look but your wallet will be thanking you for going every few months instead of every 6 weeks.

What is your TOUGH DECISION?

noreply@blogger.com ("My Money Matters" kit) — Fri, 24 Jul 2009 00:28:00 +0000

One of my clients recently emailed a dilemma she is facing. I know that many of you might be going through this as well and thought it was worth sharing.

She has been a successful freelancer but is seeing a big dip in income. While she has been looking for more work, this is a tough job market (as I'm sure many of you know). We have worked together over the years to really trim her budget so she feels good in that arena. In addition, she has been saving $250 into her IRA each month, and $100/month into her emergency savings. She just found out her rent is going up and is considering dipping into her savings to find a lower rent home. Is this a smart decision?

Answer:

This is not an easy question and there may not be a right or wrong answer. I would start with making sure she is doing everything she can to spend smarter and networking for income on sites such as Urban Interns or Mediabistro. We can all do better and it's worth the few minute check-up.

After that I would lower her rent, even if it means dipping into savings to do so. By reducing what she has control over, she is minimizing her pressure for the longer term and overall. I would strongly recommend to still save - this is KEY! Therefore, it's worth it to dip into savings to move and reduce expenses.

Bargains at the Phone and Cable Company?

noreply@blogger.com ("My Money Matters" kit) — Tue, 21 Jul 2009 21:47:00 +0000

I highly doubt that Verizon, Time Warner or Comcast has a summer sale. However, there are ways to get better bargain rates from your phone or cable company. A few steps to squeeze more money from them:

- Start by just asking. If you get someone on the phone who is completely uncooperative, just hang up, dial again and speak with someone new. You can also ask for their supervisor. Don’t waste your energy trying to argue with someone who won’t help. You can also ask for the rep who deals with new sign-ups. Even though you aren’t new, tell them you are considering switching companies. They don’t want to lose you!

- Ask for a better rate than what you have or ask if they have any promotions going on. More times than not, they will be able to offer a better rate.

- Bundle your services and get a discount. The phone companies are offering cable and the cable companies are offering phone services. Use one company for both services and get paid for it!

Putting the Fun Back in Money

noreply@blogger.com ("My Money Matters" kit) — Thu, 16 Jul 2009 18:01:00 +0000

This article was posted on SmartyPig, a great resource for saving money and earning higher interest.

Ever notice how it seems like everyone else is going on an amazing vacation? Or just bought that new car? However, when you sit down at the end of the month and are trying to find those extra dollars for the vacation, you just can’t seem to stretch that dollar enough. Especially when you aren’t even sure your job is stable. One of the keys is putting the fun back in your money. How? Follow these easy steps.

Associate the Fun with the Not-So-Fun.

If you are like most of us, figuring out your mutual fund allocations is as much fun as going to the dentist. But what if you crossed learning about mutual funds with your favorite hobby such as yoga or watching NASCAR? It could be as easy as that. Start associating the two. Every time you plan to take a yoga class or watch a race on TV, you have to look up a mutual fund you own on Morningstar, or read a few pages of Money Magazine or even ask a smart friend about their mutual funds in their 401k BEFOREHAND. Put it in the schedule and then you have permission to om away!

Running to Ratios.

You are so wild about running, you would run every night after work or sign up for a 5k every weekend if you didn’t have other obligations. But what if you could start learning key financial terms such as expense ratio, exchange traded funds and asset allocation, while you are making your mileage every week? Take advantage of that time running by downloading some interesting and FUNNY podcasts from NPR or iTunes onto your iPod. Most are free. My favorites are: Planet Money and Marketplace.

Live a SEINFELD Episode.

One of my favorite SEINFELD episodes is the one where Jerry and the gang decided to live in an opposite world. All their actions were supposed to be opposite what they usually did. Why not tackle this idea with your money? If you are at a birthday party for one of your son’s friends and you usually talk about the baseball game, you can say instead “How do you evaluate how much life insurance you need?” Or if you pay for everything with credit cards, try just using cash for one week. If you gravitate to the op-ed page in the paper while sipping your morning joe, why not read the business section first that day. See what happens. Before you know it, you are quoting Geithner’s latest speech and you understand the effect unemployment rates have on your bank’s interest rate.

Reward Yourself.

This is one of my favorites. There is nothing like the big sweet piece of chocolate cake after dinner to get us to finish our veggies. The traditional ways of taking control of money aren’t really working any more. Create a reward for yourself when you reach a certain dollar savings goal. For every $1,000 you save, go out for dinner at your favorite restaurant. Yes, you are spending money, but you also have $1,000 saved in a hard-to-reach account you probably wouldn’t have saved.

Find a Buddy.

There is no question that you are going to stick to your spending plan better when there is someone to hold you accountable. It’s your choice if you pick the friend who will kick your butt or the friend in a similar situation. Regardless, you are more apt to see results when you have to answer to someone else. While you are at it, maybe this is the time to pick new friends? Go through your FACEBOOK page and look for friends with good money habits. You never know what kind of good habits will rub off on you.

Reward Yourself

noreply@blogger.com ("My Money Matters" kit) — Thu, 09 Jul 2009 19:15:00 +0000

I am finding that more and more the traditional way of taking control of our money does not always work. It sounds cheap and dirty but maybe this is what we need to resort to for seeing results in your bank account.

For every $1,000 dollars you save, treat yourself at the spa. Or buy that new $100 purse you had your eye on. Yes, you are spending $100, but you also have $1,000 saved in a hard-to-reach account you probably wouldn’t have saved.

Rest more. When we are going going going non-stop, we spend our money more unconsciously. Take ½ hour each day to plan your purchases, make decisions about your bills and overall be less stressed about the big financial issues in your life (i.e. new job, paying bills, your 401k).

Find a buddy. There is no question that you are going to stick to your spending plan better when there is someone to hold you accountable. It’s your choice if you pick the friend who will kick your butt or the friend in a similar situation as you. Regardless, you are more apt to see results when you are NOT doing it by yourself.

Weigh in everyday. Instead of going on the scale every day, open an envelope every day, check a savings balance, look up a mutual fund. Don’t get obsessed with it but by facing your finances everyday, you are also getting in the habit of bringing money into your life on a regular basis. Part of the reason we need a motivator is that we have been ignoring our money for too long.

High CD Rate and Money Market Account

noreply@blogger.com ("My Money Matters" kit) — Tue, 07 Jul 2009 17:29:00 +0000

I am also on the lookout for high interest rate for money market accounts or CDs. This morning I came across two rates that were worth mentioning.

1) HSBC DIRECT. They have a 12-month CD that is paying 2%. While it might not seem that high, that is the highest rate I have seen in a long time to lock in for a relatively short time period.

2) SmartyPig. Take the name with a grain of salt. It is FDIC Insured and paying 2.75% for a money market. There doesn't seem to be any other catches for now. Let me know if you have an account there and your thoughts.

Galia and SIMPLY MONEY on CNN!

noreply@blogger.com ("My Money Matters" kit) — Tue, 30 Jun 2009 07:39:00 +0000

Yes, the same week we were on CNN too! They also filmed SIMPLY MONEY. This was an investing class. See the clip here!

Experience SIMPLY MONEY in person. Sign up for the September class NOW.

Galia and SIMPLY MONEY on TODAY SHOW!

noreply@blogger.com ("My Money Matters" kit) — Tue, 30 Jun 2009 07:30:00 +0000

The TODAY SHOW came to film SIMPLY MONEY a few weeks ago. Their premise is tracking the success and progress of a few women in the class. See the clip here!

Experience SIMPLY MONEY in person. Sign up for the September class NOW.

Visit msnbc.com for Breaking News, World News, and News about the Economy

FICOlogy as found on DailyWorth.com

noreply@blogger.com ("My Money Matters" kit) — Mon, 29 Jun 2009 20:37:00 +0000

In every conversation I have with clients or at seminars, making sure your credit report is as solid as ever is absolutely key! That is why I loved this article as found on DailyWorth.com. If you aren't already signing up for their daily easy to read newsletters, what are you waiting for? Here is a little tidbit from the article. The rest is on their site.

Craig Briskin, a consumer and anti-trust class action attorney with Mehri & Scalet, PLLC, wrote this expert's perspective on FICO exclusively for DailyWorth.

Times are tough for that thing we call money. Jobs are disappearing, credit is drying up, and no one seems to know when things will turn around. Part of the problem is how credit reports and scores are calculated. Now more than ever, it's important to avoid any blemishes on your record. People with good credit scores not only qualify for credit, they can also get better rate offers on mortgages and car loans.

Our system outsources most credit rating to three major, private credit bureaus, which are known for mixing up the files of people with similar names and Social Security numbers. The U.S. Public Interest Research Groups (PIRG) and Consumers Union found serious errors in 25% of credit reports.

Fair Isaac Corp. developed the FICO (short for Fair Isaac Corp., get it?) score, and claims that it's based on five major categories of factors - payment history is the most important. But they don't publicly disclose the remaining factors are or how they're calculated. FICO scores range from 300 to 850; 720 is the average score, and that's what you should shoot for.

REST OF THE ARTICLE HERE.

What to Carry in Your Wallet

noreply@blogger.com ("My Money Matters" kit) — Mon, 22 Jun 2009 00:58:00 +0000

One way to really change your spending is to stop using your credit cards. Is that realistic? Not for many of us! One way I found to minimize my credit card spending is to come up with a weekly amount I want to put on my credit cards. I literally keep a POST-IT piece of paper on my credit card in my wallet. Every time I use it for that week, I write the amount I spent. I just use the pen that I used to sign my name. This way, I can quickly tally up what I spent that week.

For example: $23 at drug store, $50 at grocery store, $45 at GAP Kids. I can quickly tally that I spent $118 for the week so far. I am still under my $200 for the week and can still afford to go out to dinner for $80. Not bad!

Money Myths

noreply@blogger.com ("My Money Matters" kit) — Tue, 09 Jun 2009 19:09:00 +0000

I found this article on TOUGHMONEYLOVE and some of the myths really rang true from comments I hear from clients or seminar attendees. I took a few of his myths and added my comments.

1. You spend more time monitoring your credit score than you do evaluating the performance of your investments.

In every seminar I give and almost every client I meet with I get asked about their credit score. Whether they want to know how to raise it or monitor it or if they should spend a monthly fee for insurance and monitoring. That energy should definitely be put towards monitoring your investments and understanding how they work instead. I am not a fan of paying a monthly fee to the credit agencies. Instead, open your bills and go online every week to check your bank balance.

2. You think re-paying a 401(k) loan is an investment.

My cardinal rule is you do not touch your 401(k). You will need that money when you get older. I have heard that it is ok to touch your 401(k) money if you want to buy a home. I disagree. Find that down-payment money elsewhere.

3. Instead of asking the price of the new car on the lot, you ask “how large will my payments be?”

This is directly from TOUGHMONEYLOVE. If a new car salesman can get you involved in this conversation, you are finished as a smart consumer. I’ve never asked this question because I pay cash for cars. Car dealers don’t like this because of all the money they make on financing. With all of the focus on payment size, it makes me wonder if car buyers can even do the math necessary to total their payments up.

4. You believe a cash-out refi is a debt reduction strategy.

Who hasn’t heard someone say that they were going to re-finance their mortgage so that they can pull cash out to “pay off debt”? Uh…what part of “debt” don’t they understand?

5. You are afraid to open your mail when the bills arrive.

Whenever I ask this question in a seminar, more hands are raised than not. One way to get around this is to deal with your money every week. If you open your mail as soon as it comes in, you will feel more on top of your bills and money issues. Try it.

6. Mr. FICO is your friend. Mr. Net Worth is a stranger.

How hard have you worked to save money into your 401(k), save for your down payment and put money in the bank? Probably really hard. Yet you don’t know how much it is worth or how much your investments are today? Treat your money (and yourself) with more respect. Make it a priority. Know your net worth.

How to Be an Entrepreneur and Pay the Mortgage

noreply@blogger.com ("My Money Matters" kit) — Tue, 09 Jun 2009 08:13:00 +0000

This is an age old question. I was reading Marci Alboher's new blog on Yahoo Shine: Working the New Economy and she interviewed Pamela Slim. Pamela's new book, Escape from Cubicle Nation, is a book I have wanted to read. Marci asked her a question about financial responsibilities for entrepreneurs that resonated with me:

So many would-be entrepreneurs are put off by their financial responsibilities. What to you say to people who say they’d work for themselves if only they could figure out how to pay the mortgage?

"You need to look at your financial situation with open eyes. And it’s all about your own your tolerance for risk and your financial planning. On the risk side, people have told me that they have hundreds of thousands of dollars in savings yet they still felt anxiety around starting a business. I’ve also talked to people with a thousand dollars in the bank who felt very little anxiety. As for the financial planning, if you are the only income earner or have dependents, then you absolutely need to know how much money is required to maintain your household. As enthusiastic as you are about your business idea, if you haven’t planned for cash flow, you can be crushed by anxiety if you can't pay your bills. All the experts say to have a six month cushion at minimum, but again, it’s really about knowing yourself. Some people feel really motivated if they don't have money in the bank because they know they have to make things happen quickly."

First Step in Money Success: Realization

noreply@blogger.com ("My Money Matters" kit) — Tue, 09 Jun 2009 07:34:00 +0000

Last night was the second week of SIMPLY MONEY for the summer. In just one week, this group of women achieved money success. While it might seem hard to believe, it isn't. The one theme that came from the evening was REALIZATION.

The homework from the week before was to do their "30 Second Financial Check-Up." This is a relatively simple, but POWERFUL, exercise. It did take some women hours to do but the idea is that once you do it, you can keep doing this check-up every month and it will only take you 30 seconds.

While we were going around the room sharing our money progress, I kept hearing:
"I didn't realize I had that much invested"
"I didn't realize how little I knew about my expenses or my income"
"I didn't realize how long it would take me just to find these 4 numbers"
"I didn't realize I earned that much last year"

I keep coming back to the point that it doesn't matter who manages your money, your partner, your spouse, your trusted money manager. It is your money - no matter what. So realize what you have.... It is a great place to start!

Women Need To Toot Their Own Horn

noreply@blogger.com ("My Money Matters" kit) — Sun, 07 Jun 2009 23:06:00 +0000

I met Jessica Shambora a few years ago at In Good Company. She is part of the writing team for Postcards at Fortune Magazine, and I follow her articles regularly. I recently read the article: "Gerry Laybourne Reemerges, Wisdom Intact" about an interview with Geraldine Laybroune, who created Oxygen and then recently sold it to GE. Patricia Sellers interviewed her and I loved the following quote. It inspired me as a woman and business owner and entrepreneur to push myself further up the ladder.

“Laybourne noted two areas where women aren’t too adept. “One is tooting your own horn,” she said. “Women are slaves to facts and don’t take risks as readily and trust their intuition.” She felt her own intuition blocked at Disney (DIS), where she spent a couple of years pre-Oxygen and felt that centralized control and over-analysis of ideas hampered creativity. “Eighty percent of business decisions get made on intuition,” she ventured.”

First Time Home Buyer?

noreply@blogger.com ("My Money Matters" kit) — Thu, 04 Jun 2009 10:16:00 +0000

I met with a client yesterday that had finally saved enough for a down payment. She is very hesitant to buy an apartment (especially in NYC) and I can understand why. We kept going through the numbers and while it is a bit of a stretch for her to buy an apartment. However, for many reasons, I think she should! My clients that own their own home have a higher financial net-worth!

One more reason to buy a home today. If you are a FIRST TIME HOME BUYER, the stimulus package can help you If your adjusted gross income is below $75,000 (if you're single) or $150,000 (if you're married and filing jointly), you are eligible for an $8,000 tax credit toward a first-time home purchase (this also applies to those who have not owned a home for the past three years). Given that interest rates today are extremely low and home prices have fallen in many areas (even in parts of NYC), this could work to your advantage too!

Do Less With Your Money

noreply@blogger.com ("My Money Matters" kit) — Tue, 02 Jun 2009 06:41:00 +0000

Last month I was reading Jada Pinket Smith's "AHA Moment" in O Magazine about doing less in her life. It was something I could completely relate to on a personal level, which I will share in a few minutes. My "AHA Moment" was realizing that it could be applied to your money and personal finance as well! I consider myself a business owner, wife, mother, friend, daughter, sister, runner and more, but not always in that order. These are all areas I feel passionate about but I find that I am constantly doing many things at one time and not necessarily on a quality basis. More and more I realize that I need to commit to less projects and focus on the ones I'm doing. Rather than try and do many seminars or network in twelve different places, I will pick one. When I'm with my children, I vow not to look at my email or just turn my phone off. Shouldn't this attitude be applied to your money?

One of my most popular seminars is "7 Financial Steps Every Woman Needs to Know". While it is a great overview seminar, I also encourage the attendees to just focus on one step. Take the same advice to your personal finances. Chances are you have many worries about your money: your credit report, your low savings account, your dwindling IRA, your lack of a budget. Pick one and just focus on it. For example if you want to take charge of your investments then put your budget worries on hold, stop focusing on increasing your FICO score and put your down payment savings on autopilot.

For example, for your investments, here is your assignment:

* Consolidate your investments to one place. I’ve always been a fan of Fidelity or Vanguard.

* Pare down your mutual funds to just 4 or 5.

* Follow the Mutual Fund checklist for buying new mutual funds or deciding if you should keep your existing ones (as found in SIMPLY MONEY class, My Money Matters, and Personal Finance toolkit).

* Bookmark the www.morningstar.com page on your computer so you can easily do check ups.

* Keep your fees as low as possible or none at all. (Meaning you buy no-load mutual funds or mutual funds with a low expense ratio)

* Get a system setup for organizing your statements or files. Once you have done these tasks and felt the accomplishment of thoroughly working on this one area, you will be motivated and energized to tackle the next area of your personal finance life.

Credit Card Law Will Curb FreeCreditReport.com Ads

noreply@blogger.com ("My Money Matters" kit) — Sat, 30 May 2009 23:25:00 +0000

I saw this article on the Huffington Post. Last week, Congress passed a new credit card bill that will help consumers. One of the benefits is that it will stop those ads for phony "free" credit reports which is good thing. While they do bring on a laugh, they are also misleading and cause consumers to spend more money on services they don’t need. Read more here on the Huffington Post: Credit Card Law Will Curb FreeCreditReport.com Ads

Obama and Your 401k

noreply@blogger.com ("My Money Matters" kit) — Wed, 27 May 2009 14:25:00 +0000

President Obama’s administration has been very proactive in dealing with our economic crisis. One area is our 401k. While I do not necessarily agree with some of their actions - because I think touching your 401k or IRA money is the last place you should go to for cash - they are worth summarizing.

• Relaxed Hardship Withdrawal. This would mean that the 10% penalty for taking out money early from an IRA would be waived up for to 15% of your plan or $10,000.

• Minimum Age Distribution. Some IRAs require minimum distributions once you reach age 70 ½. This would be temporarily suspended.

• Automatic IRA. I love this one! Small businesses without 401ks would be required to enroll their employees in an automatic savings IRA.

• Pie In The Sky. This would be a government backed retirement savings account that would guarantee a return of inflation adjusted of 3%. There is a very slim chance this will happen but you never know…

Seminar at JCC, NEW YORK

noreply@blogger.com ("My Money Matters" kit) — Tue, 26 May 2009 20:42:00 +0000

I am excited to be speaking again at the JCC in Manhattan on June 17th.

“It's Your Money, So Take It Personally!

You can’t control the economy or the stock market, but you can control your money and how to recession-proof it. You work very hard earning your money; put that same effort into managing it. If your money overwhelms you, it won’t after this motivational seminar from an independent financial expert, Galia Gichon. Stop being reactive and learn to become proactive about your personal finances!

It is on Wed, Jun 17 from 7:00 PM - 9:00 PM and only $15! You can register here. You can also call 646-505-5708.

The location is at the JCC in Manhattan, 334 Amsterdam Ave. at 76th St. Hope you can make it!

One Small Step

noreply@blogger.com ("My Money Matters" kit) — Sun, 24 May 2009 15:19:00 +0000

With the creation of my SIMPLY MONEY course, I have been seeing more and more amazing financial successes. One underlying consistent trait I have noticed is that these successes happen because of small money steps rather than one huge change. Take one small action step with your money every week rather than facing the obstacle of a large project. This could include going to cash instead of credit or just making an appointment with an independent financial planner. I guarantee you are more likely to see results.

Dining In

noreply@blogger.com ("My Money Matters" kit) — Thu, 21 May 2009 21:05:00 +0000

It's always nice to be acknowledged, but it's even better when my fellow bloggers are learning from my tips and advice! Check out the following post, How Dining Out-in Your Mind - Saves You Money on Collective-e (a great online networking forum!) by Katie Hellmuth Martin.

How Dining Out - in Your Mind - Saves You Money
by Katie Hellmuth Martin | 2/23/09 | 9:15pm

"My hubby and I live in New York City. While we don't live in the swankiest part of town, we do have a handful of menus we can order from any night of the week. When I first moved to Manhattan from Ohio, I lived with a couple who ordered out every single night while I cooked myself dinner - like a normal person. The guy worked in Finance, so I guess had unlimited funds - at the time.

These days, especially as an entrepreneur, I very easily justify ordering out for dinner by saying that it takes more of my time to make and clean up after the dinner, so we had better just order out. This is a very bad habit, and only some of the time truly saves me time which in some cases is money.

In trying to break this habit (while still keeping our local Indian place in business), Hubby and I have decided to deposit the money we would have spent on dinner into our joint savings account. Sunday night, I almost ordered Pizza Hut because of all of the commercials I saw while doing bills. That's an easy $10 to put into the savings account. This night, I was feeling pretty weak, and craved the Chicken Dildar, Pouri, and mango glace from said Indian restaurant, Kurry Cabob. However, we have plans to order from there on Friday for a backgammon tournament with my dear friend who is leaving NYC for greener pastures. Instead of double-indulging, I forced myself to buy vegetables at my local market, and turn a whole chicken I had cooked earlier into soup.

And boy am I glad I did because it's my first chicken soup, and it's really good. Plus, I get to put $20 into the savings account! I think that Collective-E member, Galia Gichon of Down to Earth Finance would be proud. Just one more little game to trick myself into putting money into the savings account for a future house."

Great idea, Katie!

3 Ways to Spend Smarter

noreply@blogger.com ("My Money Matters" kit) — Tue, 12 May 2009 12:26:00 +0000

I was talking to a good friend recently and she mentioned that she hated yoga. What? I love to practice yoga and strive to do it more. I couldn’t believe it – I thought we had so much in common! It made me realize that while we think we are similar, in fact, we have different habits and tackle situations differently, especially when it comes to our spending. Since I started my business over 8 years ago, tackling our spending is the foundation of how I work with clients. It affects your investing and much more. It does not matter how much you earn – everyone needs some sort of a spending plan. It is like saying you want to live a healthy life and never do any exercise! That would not be realistic. I recognize that we have different styles and practice different habits. Some of us are morning people, some are late-night owls. You get the drift. Here are 3 different ways to spend smarter. Pick one that works for you and move forward!

1) Where did it go? This is a great exercise to see where your money went the last few months. Take out your credit card bills and your bank statements and fill in categories for where you spent your money. Whenever I do this exercise with a client, they are always surprised to see how much they spent on dry-cleaning or the late fees they accrued or even how much they spent at the drugstore. Just examining your expenses can be enough of an eye-opener to spend smarter.

2) Weekly Spending Plan. My clients and seminar attendees know that this is my favorite way to spend smarter. It is the only way I have personally found to consistently keep spending within your means – and still living your life! Come up with a weekly amount to spend on non-fixed expenses. Take the money out once a week – and that is all you are spending for the week on food, taxis, entertainment. It really works. To create your own customized spending plan, check out “My Money Matters” kit or register for SIMPLY MONEY

3) Save to spend. This is ideal for those that have truly unstable income and get paid every few months, or those that have large purchases that seem to throw their budget off whack! My colleague, MP Dunleavey recommends this method. You set up percentages with your money (i.e. 60% for major expenses). You can also set up a percentage for larger purchases (vacation, new winter coat) and actually save that money in a separate ING account every month. When the bill comes up, take it out of that separate savings account.